chapter 6

Question 1

decision making

Answer 1

the action or process of identifying a strategy to resolve problems

Question 2

types of decisions managers makes:

Answer 2

• programmed

- non-programmed

Question 3

programmed decisions

Answer 3

routine tasks based on pre-established rules and guidelines

Question 4

non-programmed decisions

Answer 4

based on reason and/or intuition in response to a unique situation that requires tailored actions

Question 5

managers often use what to help them make good decisions and find solutions to complex problems:

Answer 5

five-step model of decision making (also called the classical model of decision-making)

Question 6

identify the steps in the classical decision making model (five step model)

Answer 6

step 1: DEFINE the problem
step 2: IDENTIFY and weigh decision criteria
step. 3: GENERATE multiple alternatives
step 4: RATE alternatives based on the decision criteria
step 5: CHOOSE, IMPLEMENT, AND EVALUATE the best alternative

Question 7

discuss the different decision making styles used by manages

Answer 7

research has shown that decision-making styles vary along two dimensions: value orientation and tolerance for ambiguity. Combined, the two dimensions form the four styles of decision-making:

Question 8

the four styles of decision making:

Answer 8

• directive
• analytical
• conceptual
• behavioral

Question 9

decision-making style

Answer 9

the way in which an individual perceives information and analyzes solutions

Question 10

identify the factors that influence our decisions in the workplace

Answer 10

while making decisions requires being in the right mindset and following a series of important steps, other factors may influence the way in which we make decisions in the real world

these factors include: bounded rationality, satisficing, intuition, heuristics, and bias

bounded rationality: rational decision making that is limited by time, cognitive abilities, and available info

satisficing: choosing an acceptable solution rather than an optimal solution
intuition: a decision based on feeling, previous experience, and existing knowledge
heuristics: set of informal rules used to simplify and expedite the decision-making process

bias:

Question 11

nobel prize winning psychologists Kahneman and Tversky suggested three types of heuristic:

Answer 11

• availability heuristic: making judgments on certain events based on how easily an example springs to mind
• anchoring and adjustment heuristic: the tendency for people to base decisions on the first piece of info before adjusting it
• representative heuristic: the tendency to make judgments based on our own mental models and stereotypes
• our heuristics tend to lead to biases and errors relating to how we process information. These biases include common- information

Question 12

Our heuristics tend to lead to biases and errors relating to how we process information. These biases include:

Answer 12

• common- information bias
• confirmation bias
• sunk cost bias
• hindsight bias
• escalation of commitment
• framing bias

Question 13

common-information bias

Answer 13

the tendency to place more importance on info held by the majority of people while failing to take into account views held by the minority

Question 14

confirmation bias

Answer 14

the inclination to seek out information to support our views while disregarding info that does not

Question 15

sunk cost bias

Answer 15

when people continue a certain behavior because they have already invested too much money in it

Question 16

hindsight bias

Answer 16

the propensity to overestimate an outcome that could not have possibly been predicted

Question 17

escalation of commitment

Answer 17

when people increase their level of commitment into a decision despite receiving negative info about it

Question 18

framing bias

Answer 18

a cognitive bias where decisions are influenced by the way information is presented rather than the facts themselves

Question 19

discuss how managers can overcome barriers to decision-making

Answer 19

our biases tend to manifest themselves in our behavior, which stifles the creative process, causing barriers to decision-making. People hesitate to make decisions for a number of reasons: fear they may not be right, fear of what others might say or think, or fear of following through on a decision, once it has been made. Several tools are available to help people organize their thoughts and resolve decision-making paralysis: the Ben Franklin balance sheet, the report card method, and partner-in-absentia method

Question 20

Several tools are available to help people organize their thoughts and resolve decision-making paralysis:

Answer 20

• The Ben Franklin balance sheet
• The report card method
• Partner-in-absentia method

Question 21

the ben franklin balance sheet:

Answer 21

• founding father ben franklin often used this technique to make decisions
• to start, list your pros and cons: then look at both to see which one wins. This is a useful technique for answering straightforward yes/no questions, for instance whether you should take a job

Question 22

report card method

Answer 22

• this is helpful for when you want to compare a few things against each other.
• For instance, you would like to buy a new car but can’t decide which model to choose. List the criteria for each model and grade each one on a scale of 1 to 10. The model with the highest number determines your choice

Question 23

partner-in-absentia method

Answer 23

• It can be difficult to make decisions when our bosses or teammates are away or inaccessible. This is why anticipatory planning is so important.
• The partner-in-absentia method involves finding out the amount of decision-making autonomy you have while your boss is away, who you need to consult when making decisions, and how you can access the info you need to make decisions

Question 24

groupthink

Answer 24

a usually unconscious mode of group decision-making in which individuals prioritize agreement over analysis

Question 25

explore the different methods of group decision-making

Answer 25

• group decision-making offers many benefits but can also hinder the process. Groupthink and sequential decision-making can interrupt the decision process.

Question 26

Several group decision-making techniques help to limit the effects of sequential decision-making and groupthink:

Answer 26

• brainstorming
• the Delphi technique
• the nominal group technique (NGT)

Question 27

brainstorming

Answer 27

creating as many alternatives as possible, without making value judgements about any ideas

Question 28

the Delphi technique

Answer 28

a method of decision-making in which a group of experts propose and question ideas until a consensus is reached

Question 29

Nominal group technique (NGT)

Answer 29

A group decision-making process in which individuals rate proposed solutions and the total tally determines the final decision