Chapter 12 - Decision making, learning, knowledge management, and information technology

Question 1

Organisational decision making

Answer 1

The process of responding to a problem by searching for a solution that will create the most value for organisational stakeholders

Question 2

Programmed decision making

Answer 2

Decisions that are repetitive and routine

Question 3

Non-programmed decision making

Answer 3

Decisions that are novel and unstructured.

Question 4

Difference in requirements between programmed and non-programmed decision making

Answer 4

Non-programmed decision making requires more search for information, as it is impossible to know in advance if these decisions are the right ones.

Question 5

What does non programmed decision making require from managers?

Answer 5

Requires managers to rely on judgement, intuition, and creativity

Question 6

The three steps of the rational model

Answer 6

1) managers identify problems that need to be solved

2) managers seek to design and develop a series of alternative courses of action to solve the problems they have identified

3) managers compare the likely consequences of each alternative and decide which course of action offers the best solution

Question 7

What is the ideal situation for the rational model

Answer 7

No uncertainty

Question 8

What are the 3 assumptions that are criticised in the rational model?

Answer 8

The assumption that decision makers have all the information they need

The assumption that decision makers can make the best decision

The assumption that decision makers agree about what needs to be done

Question 9

The Carnegie model

Answer 9

Recognises the effects of ‘satisfying’, bounded rationality, and organisational coalitions

Question 10

Organizational decision-making

Answer 10

The process of responding to a problem by searching
for and selecting a solution or course of action that will create value for organisational stakeholders.

Question 11

To make the best choices, managers must make two kinds of decisions:

Answer 11

Programmed decision-making

Non-programmed decision-making

Question 12

Non-programmed decision-making

Answer 12

Decisions that are novel and unstructured.

Question 13

Programmed decision-making

Answer 13

Decisions that are repetitive and routine

Question 14

The rational model

Answer 14

Decision-making is a straightforward three stages process

Question 15

Steps in the rational model

Answer 15

Stage 1: Identify and define the problem

Stage 2: Generate alternative solutions to the problem

Stage 3: Select solution and implement is

Question 16

What assumptions are made with the rational model?

Answer 16

Decision maker have all the information

Decision makers can make the best decision

The assumption that decision makers agree about what needs to be done

Question 17

The Carnegie model

Answer 17

Attempt to better describe the realities of the decision-making process

Question 18

The Carnegie model recognises the effects of

Answer 18

Satisficing

Bounded rationality

Organizational coalitions

Question 19

Satisficing

Answer 19

Limited information searches to identify problems and
alternative solutions

Question 20

Bounded rationality

Answer 20

A limited capacity to process information

Question 21

Organizational coalitions

Answer 21

The variation in managers’ preferences and values and assumes different managers will evaluate different alternatives in the same way.

Question 22

The incrementalist model

Answer 22

Organisational decision making, is when selecting a set of new alternative courses of actions,

managers tend to choose those that are only slightly, or incrementally, different from those used in the past, thus lessening their chances of making a mistake

Question 23

The unstructured approach

Answer 23

This approach emphasises the unstructured nature of incremental decision making:

Managers make decisions in a haphazard, intuitive way, and uncertainty forces them to re-examine their decisions continuously to find new ways to behave in a constantly chaining environment.

Question 24

The garbage-can model

Answer 24

This model turns the decision-making process around and argues that managers are as likely to start decision making form the solution side as from the problem side.

Decision makers may propose solutions to problems that do not exist: they create a problem they can solve with solutions that are already available

Question 25

Organizational learning

Answer 25

The process managers use to improve organization
members’ capacity to understand and manage the
organization and its environment so they can make
decisions that continuously increase organizational
effectiveness.

Question 26

Two principal types of organizational learning

Answer 26

Exploration

Exploitation

Question 27

Exploration

Answer 27

Organizational member’s search for and experimentation
with new kinds or forms of organizational activities and
procedures

Question 28

Exploitation

Answer 28

Organizational members’ learning of ways to refine and
improve existing organizational activities and procedures.

Question 29

Learning organization

Answer 29

An organization that purposefully designs and constructs its structure, culture and strategy so as to enhance and
maximize the potential for organizational learning to take
place.

Question 30

Levels of organizational learning

Answer 30

Individual

Group

Organisational

Inter-organisational

Question 31

Individual

Answer 31

At the individual level, managers need to do all they can to facilitate the learning of new skills, rules, norms and values so individuals can increase their own personal abilities and, in doing so, help build an organisation’s core competences.

• Senge argued that, for organisational learning to occur, each of its members needs to develop, a sense of personal mastery.

Question 32

Personal mastery

Answer 32

Organizations should empower all employees and
allow them to experiment and create and explore what they want

Question 33

Group

Answer 33

At group level, managers need to encourage learning by promoting the use of various kinds of groups – such as self-managed or cross-functional teams – so that employees can share or pool their skills and abilities to solve problems.

Question 34

Organizational

Answer 34

At the organizational level, managers can provide learning through the way they create its structure and culture.

Question 35

Inter-organizational

Answer 35

Organizational structure and culture not only establish the shared vision or framework of common assumptions that guide learning inside an organization, they also determine how learning occurs at the inter-organizational level.

Inter-organizational learning is important because organizations can improve their effectiveness by imitating each other’s distinctive competences.

Serge principle of organizational learning, is systems thinking, that says: to create a learning organization, managers must recognize the effects of one level of
learning on the others

Question 36

Principles of Serge’s organizational learning

Answer 36

Personal mastery

Metal models

Team learning

Building shared vision

Systems thinking

Question 37

Knowledge management

Answer 37

A type of IT-enabled organizational relationship that has
important implications for both organisational learning and decision making

Question 38

Codification approach

Answer 38

Knowledge is carefully collected, analysed and stored in databases where users who input organization-specific commands and keywords can retrieve it easily.

It is a form of bureaucratic control that can result in major gains in technical efficiency and allow an organization better to manage its environment.

Is only suitable when the product or service being provided is itself quite standardized so best practices can continually be discovered and entered into the knowledge management system to be used by others in the organization.

Question 39

Personalization approach

Answer 39

Is pursued when an organization needs to provide customized products or solutions to clients, when technology is changing rapidly and when employees rely much more on know-how, insight, and judgement to make decisions.

Information systems are designed to show employees who in the organization might posses the knowledge they might need or who might have confronted a similar problem in the past.

Question 40

Cognitive structure

Answer 40

The system of interrelated beliefs, preferences, expectations and value a person uses to define problems and events

Question 41

Cognitive biases

Answer 41

Factors that systematically bias cognitive structures and
affect organizational learning and decision-making

Question 42

Cognitive dissonance

Answer 42

The state of discomfort or anxiety a person feels when
there is an inconsistency between his or her beliefs and actions

Question 43

Illusion of control

Answer 43

A cognitive bias that causes managers to overestimate the extent to which the outcomes of an action are under their personal control

Question 44

Frequency

Answer 44

A cognitive bias that deceives people into assuming that extreme instances of a phenomenon are more prevalent that they really are

Question 45

Representativeness

Answer 45

A cognitive bias that leads managers to form judgements
based on small and unrepresentative samples

Question 46

Escalation of commitment

Answer 46

A cognitive bias that leads managers to remain
committed to a losing course of action and refuse to admit they have made a mistake

Question 47

Projection:

Answer 47

A cognitive bias that allows managers to justify and reinforce their own preferences and values by attributing them to others

Question 48

Ego-defensiveness

Answer 48

A cognitive bias that lead managers to interpret events in
such a way that their actions appear in the most favourable light

Question 49

Strategies for organizational learning

Answer 49

Listening to dissenters

Converting events into learning opportunities

Experimenting

Question 50

Groupthink

Answer 50

The conformity that emerges when like-minded people reinforce one another’s tendencies to interpret events and information in similar ways.

Question 51

Devil’s advocate

Answer 51

A person who is responsible for critiquing on-going organizational learning.

Question 52

Devil’s advocate

Answer 52

A person who is responsible for critiquing on-going organisational learning.

Question 53

Collateral organizational structure

Answer 53

An informal organisation of managers set up parallel to the formal organisational structure to “shadow” the decision-making and actions of managers in the formal
organization.