Chapter 8 Flashcards
Decision Making
The process of choosing from among several alternatives
Problem Solving
Finding the answer to a question; it is also a form of decision making in which the issue is unique and alternatives must be developed and evaluated without the aid of a programmed decision rule
Programmed Decision
A decision that recurs often enough for a decision rule to be developed
Decision Rule
A statement that tells a decision make which alternative to choose based on the characteristics of the decision situation
Non-programmed Decision
A decision that recurs infrequently and for which there is no previously established decision rule
Condition of Certainty
Under this condition, the manager knows what the outcomes of each alternative of a given action will be but has enough information to estimate the probabilities of various outcomes
Condition of Risk
Under this condition, the decision maker can’t know with certainty what the outcome of a given action will be but has enough information to estimate the probabilities of various outcomes
Condition of Uncertainty
Under this condition, the decision maker lacks enough information to estimate the probability of possible outcomes
Rational Decision-Making Approach
A systematic, step-by-step process for making decisions
Contingency Plans
Alternative actions to take if the primary course of action is unexpectedly disrupted or rendered inappropriate
Cognitive Dissonance
Doubt about a choice that has already been made
Evidence-Based Management (EBM)
The commitment to identify and utilize the best theory and data available to make decisions
Administrative Model
This model of decision making argues that managers use bounded rationality, rules of thumb, sub-optimizing, and satisficing in making decisions
Bounded Rationality
The idea that decision makers cannot deal with information about all the aspects and alternatives pertaining to a problem and therefore choose to tackle some meaningful subset of it
Suboptimizing
Knowingly accepting less than the best possible outcome to avoid unintended negative effects on other aspects of the organization
Satisficing
Examining alternatives only until a solution that meets minimal requirements is found
Coalition
An informal alliance of individuals or groups formed to achieve a common goal
Intuition
Innate belief about something without conscious consideration
Escalation of Commitment
Occurs when a decision maker stays with a decision even when it appears to be wrong
Risk Propensity
The extent to which a decision maker is willing to gamble in making a decision
Ethics
A person’s beliefs about what constitutes right and wrong behavior
Prospect Theory
Theory that argues what when people make decisions under a condition of risk they are more motivated to avoid losses than they are to seek gains
IIntegrated Approach
This approach to decision making combines the steps of the rational approach with the conditions in the behavioral approach to create a more realistic approach for making decisions in organizations
Creativity
A person’s ability to generate new ideas or to conceive of new perspectives on existing ideas
