Chapter 13: Decision-Making Flashcards

1
Q

Decision making today

A

high elements of rapid change, greater complexity, and uncertainty

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2
Q

New Decision making requirements

A
  • must be made faster
  • no one individual has all information needed
  • rely less on hard data
  • there is less certainty about outcomes
  • evolve through trial and error
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3
Q

Individual

A
  • rational approach
  • bounded rationality approach
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4
Q

Organizational Decision Making Models

A
  • management science approach
  • incremental decision process model
  • garbage can model
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5
Q

Rational approach

A

a process of decision making that stresses the need for systematic analysis of a problem followed by choice and implementation in a logical sequence
- ideal model, not fully achievable

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6
Q

bounded rationality approach

A

how decisions are made under severe time and resource constraints

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7
Q

Rational approach 2 stages

A
  • problem identification stage
  • problem solution stage
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8
Q

Problem Identification Stage

A
  1. monitor the decision environment
  2. define the decision problem
  3. specify decision objectives
  4. diagnose the problem
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9
Q

Problem solution stage

A
  1. develop alternative solutions
  2. Evaluate alternatives
  3. Choose the best alternative
  4. Implement the chosen alternative
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10
Q

Organizational Decision Making

A

the organizational process of identifying and solving problems

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11
Q

Programmed Decisions

A

Repetitive and well defined procedures that exist for resolving problems

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12
Q

Nonprogrammed Decisions

A

Novel and poorly defined, made when no procedure exists for solving the problem
- bounded rationality
- organization constraints
- personal constraints
- decision/ choice

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13
Q

Management Science Approach

A

Organizational decision making that is the analogue to the rational approach by individual managers
- uses statistics
- removes human element
- successful in complex and stable environments
- lack tacit knowledge

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14
Q

Explicit knowledge

A

Can be written down, can be quantified

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15
Q

Tacit knowledge

A

Qualitative, can’t be quantified

Personal knowledge; transmitted through personal contact

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16
Q

Carnegie Model

A

organizational decision making involving many managers and a final choice based on a coalition among those managers
- uncertainity and conflict cause coalition formation, causes search and satisficing decision behaviour

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17
Q

coalition

A

an alliance among several managers who agree through bargaining about organizational goals and problem priorities

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18
Q

Satisficing

A

Satisfying and sacrificing, the acceptance by organizations of a satisfactory rather than a maximum level of performance

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19
Q

Incremental Decision Process Model

A

a model that describes the structured sequence of activities undertaken from the discovery of a problem to its solution

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20
Q

Incremental Decision Process Model: Phases

A
  1. Identification
  2. Development
  3. Selection
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21
Q

Identification

A
  • Recognition
  • Diagnosis
22
Q

Development

A
  • search/ screen
  • design
23
Q

Selection

A
  • judgement evaluation
  • analysis evaluation
  • bargaining evaluation
  • authorization
24
Q

Combining Incremental Process and Carnegie Model

A

Problem Identification –> Problem Solution

25
Problem solution
the decision-making stage in which alternative courses of action are considered and one alternative is selected and implemented
26
The Garbage Can Model
Describes the flow of multiple decisions within the organization - organized anarchy - ongoing stream of events
27
Organized Anarchy:
- Extremely organic organizations characterized by highly uncertain conditions Problematic preferences - Unclear, poorly understood technologies - Turnover
28
Ongoing stream of events
- problems - potential solutions - participants - choice opportunities
29
Problems
Gaps between desired performance and current activities. Some problems are never solved
30
Potential solutions:
An idea someone proposes for adoption, whether or not it fits a particular solution
31
Participants
People are hired, reassigned, fired. As people move, problems, solutions & opportunities are defined and redefined
32
Choice opportunities
occasions when a decision is made, sometimes as a random collision of people and ideas
33
Garbage Can Model Consequences
- Solutions may be proposed even when problems do not exists - Solutions arise without choice opportunities or participants - Choices are made without solving problems - Problems may persist without being solved - A few problems are solved; many are not
34
Contingency Framework
a perspective that brings together the two organizational dimensions of problem consensus and technical knowledge about solutions
35
Contingency Framework Axis
Problem Consensus Solution Knowledge
36
Quad 1
Problem Consensus Certain and Solution Knowledge Certain - individual: rational approach, computation - organization: management science
37
Quad 2
Problem consensus uncertain and solution knowledge certain - individual: bargaining, coalition formation - organization: Carnegie model
38
Quad 3
Problem consensus certain and solution knowledge uncertain - individual: judgement, trail and error - organization: incremental decision process model
39
Quad 4
Problem consensus uncertain and solution knowledge uncertain - individual: bargaining and judgment, inspiration and imitation - organization: canegie and incremental decision, evolving to garbage can model
40
imitation
the adoption of a decision tried elsewhere in the hope that it will work in the present situation
41
inspiration
an innovative, creative solution that is not reached by logical means
42
decision learning
a process of recognizing and admitting mistakes that allows managers and organizations to acquire the experience and knowledge to perform more effectively in the future
43
escalating commitment
persisting in a course of action when it is failing; occurs because managers block or distort negative information and because consistency and persistence are valued in contemporary society
44
evidence-based management
a commitment to make better informed decisions based on facts and evidence
45
groupthink
the tendency of people in groups to suppress their own views
46
high-velocity environments
industries in which competitive and technological change is so extreme that market data are either unavailable or obsolete, strategic windows open and shut quickly, and the cost of a decision error is company failure
47
intuitive decision making
the use of experience and judgment, rather than sequential logic or explicit reasoning, to solve a problem
48
point-counterpoint
a decision-making technique that divides decision makers into two groups and assigns them different, often competing, responsibilities
49
problem consensus
the agreement among managers about the nature of problems or opportunities and about which goals and outcomes to pursue
50
problemistic search
when managers look around in the immediate environment for a solution to resolve a problem quickly
51
prospect theory
a theory that suggests that the threat of loss has a greater impact on decisions than the possibility of an equivalent gain