Chapter 2 - Managerial Decision Making Flashcards
What are the 2 systems the brain uses to make decisions?
- Reflexive
- Reactive
What type of decisions do the reflexive system handle?
Decisions that are logical, analytical, deliberate and methodical
What type of decisions do the reactive system handle?
Decisions that are o quick, impulsive, intuitive, relies on emotions or habits to provide cues for what to do next
What is the difference between programmed and nonprogrammed decisions?
Programmed: Decisions that are repeated over time and for which an existing set of rules can be developed to guide that process
Nonprogrammed: Decisions that are novel, unstructured decisions that are generally based on criteria that are not well-defined
For programmed decisions, managers often develop _____, or mental shortcuts, to help reach a decision
Heuristics
What are heuristics and what type of decision does it fall under??
- Mental shortcuts used to help reach a decision
- Programmed Decisions
What are the 6 steps in the Decision-Making Process?
- Recognize that a decision needs to be made
- Generate multiple alternatives
- Analyze the alternatives
- Select an alternative
- Implement the selected alternative
- Evaluate its effectiveness
What are the 6 barriers to effective decision making?
- Bounded Rationality
- Escalation of Commitment
- Time Constraints
- Uncertainty
- Personal Biases
- Conflict
What is satisficing and what type of decision does it fall under?
- Choosing the first acceptable solution
- Programmed decisions
What are the 7 common logical fallacies people may use when arguing their point or defending their perspective?
- Non Sequiter
- False Cause
- Ad Hominem
- Genetic Fallacy
- Appeal to Tradition
- Bandwagon Approach
- Appeal to Emotion
What is Non Sequitur?
The conclusion presented isn’t logical or isn’t the only logical conclusion based on the argument(s)
What is False Cause?
Assuming that because 2 things are related that one cause the other
What is Ad Hominem?
Redirects from the argument to attack the person making the argument
What is Genetic Fallacy?
You can’t trust someone because of its origins
What is Appeal to Tradition?
If we have always done something one particular way, that must be the right or best way
What is Bandwagon Approach?
The majority of people are doing it, therefore it must be good
What is Appeal to Emotion?
Redirects the argument from logic to emotion
What are the advantages of Group Decisions?
- You can incorporate different perspectives and ideas
- More ideas generated and greater intellectual stimulation as group members discuss available option
- Involving people who will be affected by a decision will allow those individuals to have a greater understanding of the issues and a greater commitment to the solutions
What are the disadvantages of Group Decisions?
- Can be bogged down by conflict
- People may go to the opposite extreme and push for agreement at the expense of quality discussions
- Members may choose not to voice their concerns or objections to keep the peace (Groupthink
- Often one person in the group has more power than others and discourages those with differing opinions from speaking up to ensure only their ideas are implemented
How can you form a Quality Group?
- Form groups with diverse members
- Encourage everyone to speak up
- May assign a member to play the devils advocate in order to reduce groupthink
How can you reduce Conflict in a Group?
Find common ground between members and keep them focused on a common goal
What is groupthink?
Where members may choose not to voice their concerns or objections to keep the peace
What is a devils advocate?
Intentionally takes on the role of the critic
Pushes the other group members to think deeper about the pros and cons of proposed solutions before reaching a decision and implementing it
