Chp 7

Question 1

Decision Making

Answer 1

the conscious process of making choices among alternatives with the intention of moving toward some desired state of affairs

Question 2

Rational choice decision

Answer 2

selecting the best alternative by calculating the probability that various outcomes will occur from the choices and the expected satisfaction from those outcomes

Question 3

6 steps to rational decisions

Answer 3

1. identify problem
2. choose the best decision process
3. discover or develop possible choices
4. select the choice with highest value
5. implement
6. evaluate

Question 4

Mental models

Answer 4

knowledge structures that we develop to describe, explain and predict the world around us

Question 5

Bounded rationality

Answer 5

view that people are bounded in their decision-making capabilities, including access to limited information, limited information processing and tendency toward satisficing rather than maximizing when making choices

Question 6

Implicit favorite

Answer 6

the preferred alternative that decision maker uses to repeatedly as a comparison with other choices

Question 7

Confirmation bias

Answer 7

the processing of screening out information that is contrary to our values and assumptions and to more readily accept confirming information

Question 8

Anchoring and adjustment heuristic

Answer 8

natural tendency for people to be influenced by an initial anchor point such that they do not sufficiently move away from that point as new information is provided

Question 9

Availability heuristic

Answer 9

natural tendency to assign higher probabilities to objects or events that are easier to recall from memory, even though ease of recall is also affected by non probability factors (ex emotional response)

Question 10

Representativeness heuristic

Answer 10

natural tendency to evaluate probabilities of events or objects by the degree to which they resemble other events or objects rather than by objective probability information

Question 11

Satisficing

Answer 11

selecting an alternative that is satisfactory or “good enough” rather than the alternative with the highest value

Question 12

Intuition

Answer 12

ability to know when a problem or opportunity exists and select the best course of action without conscious reasoning

Question 13

Scenario Planning

Answer 13

systemic process of thinking about alternative futures and what the organization should do to anticipate and react to those environments

Question 14

Escalation of commitment

Answer 14

tendency to repeat an apparently bad decision or allocate more resources to a failing course of action

Question 15

Self-enhancement

Answer 15

person’s inherent motivation to have positive self-concept (and have others view them favorably)

Question 16

Prospect theory

Answer 16

innate tendency to feel stronger negative emotion from losing a particular amount than positive emotion from gaining an equal amount

Question 17

Strategies for evaluating decision outcomes

Answer 17

1. change the decision maker
2. create a stop-loss
3. seek factual and social feedback
4. focus on the present

Question 18

Creativity

Answer 18

development of original ideas that make a socially recognized contribution

Question 19

Divergent thinking

Answer 19

reframing a problem in a unique way and generating different approaches to the issue

Question 20

Learning orientation

Answer 20

set of beliefs and norms in which people are encouraged to question past practices, learn new ideas, experiment putting ideas into practice, and view mistakes as part of the learning process

Question 21

Activities that encourage creativity

Answer 21

1. redefine the problem
2. associative plan
3. cross-pollination
4. design thinking

Question 22

Design thinking

Answer 22

human-centered, solution-focused creative process that applies both intuition and analytical thinking to clarify problems and generate innovative solutions

Question 23

4 rules of design thinking

Answer 23

1. human rule
2. ambiguity rule
3. redesign rule
4. tangible rule