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Management > Chapter 7 > Flashcards

Chapter 7 Flashcards

1
Q

System 1

A

fast, automatic, and intuitive, operating with little to no effort

intuitive and largely unconscious

make quick decisions and judgments based on patterns and experiences

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1
Q

System 2

A

slow, deliberate, and conscious, requiring intentional effort

analytical and conscious

used for complex problem-solving and analytical tasks where more thought and consideration are necessary

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2
Q

Decision Making

A

decision : choice made from available alternatives
process of identifying problems and opportunities then resolving them

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3
Q

rational decision assumptions

A

operates to accomplish est goals, problem is defines

decision maker strives for info and certainty, alternatives evaluated

criteria for evaluating alternatives is know; select alternative with max benefit

decision maker is rational and uses logic

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4
Q

non rational assumptions

A
  • Decision makers lack complete information,
  • managers struggle to make the best decisions,
  • decisions making lacks certainty
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5
Q

rational model

A

classical

assumes managers will make a logical decision that will be in the best interest of the org

explains how managers should make decisions

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6
Q

non rational model

A

assumes that decision making is always uncertain and risky, making it difficult for managers to make optimal decisions
- deletes assumption of certainty (full knowledge) –> risk

2 models : satisficing & intuition

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7
Q

rational decision making stages

A

stage 1 : identify the problem/ opportunity
stage 2 : think up alternative solutions
stage 3 : evaluate alternatives & select a solution
stage 4 : implement & evaluate the solution chosen

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8
Q

rational decision making problems

A
  • unrealistic
  • takes too much time and money to come up with all possible alternatives
  • not always clear or constant
  • complexity of problem
  • different cognitive abilities, values, skills
  • imperfect info
  • info overload
  • diff priorities
  • conflicting goals
  • cognitive biases
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9
Q

satisficing model

A

behavioral model
- limited info processing leads to use of judgmental heuristics which leads to choosing a solution that meets the minimum standard of acceptance

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10
Q

bounded rationality

A

ability of decision makers to be rational is limited by numerous constraints
- complexity, time and money, cognitive capacity

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11
Q

insight

A

managers could not act truly logically bc their rationality is bounded by many restrictions

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12
Q

satisficing assumptions

A
  • use incomplete and imperfect info
  • constrained by bounded rationality
  • tend to satisfice not optimize
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13
Q

satisficing pros & cons

A

pros :
- better understand inherent biases and limitations

cons :
- potentially less optimal solutions ( not always company’s best interest)
- inconsistency in decision making

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14
Q

evidence based decision making

A

gather and analyze high quality data or facts to develop and implement a plan of action

humans do descriptive pieces
AI does the predictive pieces

make decisions under incomplete info

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15
Q

big data

A

large quantity of data that is too large for a typical computer to handle and requires the use of new tech and stat approaches to process it

16
Q

predictive analytics

A

combines historic data with stat models and machine learning to specify likelihood of future outcomes

17
Q

data analytics

A

includes descriptive and predictive analytics to improve orgs efficiency and decision making accuracy through systems and software

18
Q

decision making styles

A

directive
analytical
conceptual
behavioral

19
Q

directive decision making style

A
  • prefer simple and clear solutions
    -make decisions rapidly
  • do not consider many alternatives
  • rely on existing rules
  • focus on facts

concerned with task
low tolerance for ambiguity

20
Q

analytical decision making style

A
  • prefer complex problems
  • carefully analyze alternatives
  • enjoy solving problems
  • willing to use innovative methods
    take longer to make decisions
  • like a lot of info and alt choice

concerned with task
high tolerance for ambiguity

21
Q

conceptual decision making style

A
  • socially oriented
  • artistic
  • solve problems creatively
  • adopt long-term perspective
  • rely on intuition

concerned with people
high tolerance for ambiguity

22
Q

behavioral decision making style

A
  • work well with others (most people oriented)
  • interest in helping others
  • open to suggestions
  • rely on meetings

concerned with people
low tolerance for ambiguity

23
Q

availability bias

A

use of information readily available from memory to make judgments

24
Q

confirmation bias

A

seek information to support their point of view and ignore data that do not support it

25
Q

representativeness bias

A

generalize from a small sample or a single event

26
Q

sunk cost bias

A

managers add up all the money already spent on a project and conclude it is too costly to simply abandon it; also called the sunk-cost fallacy

27
Q

anchoring and adjustment bias

A

make decisions based on an initial figure
ex : estimate

28
Q

overconfidence bias

A

subjective confidence in their decision making is greater than their objective accuracy

overestimating your abilities

29
Q

hindsight bias

A

view events as being more predictable than they really are

30
Q

framing bias

A

influenced by the way a ­situation or problem is presented to them

31
Q

escalation of commitment bias

A

increase commitment to a project despite negative information about it
- pride
- intuition
- hubris

32
Q

categorical thinking bias

A

classify people or information based on observed or inferred characteristics

33
Q

effective decision making

A
  1. importance
    - how high priority is this situation (1 mil brand deal)
  2. credibility
    - how believable is the info about the situation
  3. urgency
    - how quickly much i act on the info about the situation?
34
Q

ineffective responses to a decisions situation

A
  1. relaxed avoidance
    - dont make a decisions bc no negative consequence, est onsequences
  2. relaxed change
    - make it seem like you do something
  3. defensive avoidance
    - i cant do it I need help
  4. panic
    - nothing to rely on

Management (16 decks)

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