Decision Making

Question 1

Decision Making

Answer 1

This is the process of making choices among alternative courses of action, including inaction.

Question 2

Levels of Decisions

Answer 2

Decision Making occurs through Strategic Decisions, Tactical Decisions and Operational Decisions.

Question 3

Strategic Decision

Answer 3

This is decision making from the top management. It pertains to high level managerial activities such as mergers, diversification and divestment.
EX: HMV CEO

Question 4

Tactical Decision

Answer 4

Middle Level management decisions regarding things such as improving sales, marketing a new product and employee training.
Ex: Rudy

Question 5

Operational Decision

Answer 5

Decision making that pertains to all levels of employees, what should I say to the customer? Should I attend this Office Event
Ex: Me @ HMV

Question 6

Types of Decisions

Answer 6

Programmed Decisions and Non Programmed Decisions

Question 7

Programmed Decisions

Answer 7

These are decisions that frequently occur and require responses that stem from routine, they are called decisions rules.

For example, many restaurants face customer complaints as a routine part of doing business. Because this is a recurring problem for restaurants, it may be regarded as a programmed decision. To deal with this problem, the restaurant might have a policy stating that every time they receive a valid customer complaint, the customer should receive a free dessert

Question 8

Non Programmed Decisions

Answer 8

These are choices that are not made everyday and require significant thought before action.

Example: McDonald’s became aware of a need to respond to growing customer concerns regarding foods high in fat and calories. This is a nonprogrammed decision because for several decades, customers of fast-food restaurants were more concerned with the taste and price of the food, rather than the healthiness.

Question 9

Rational Decision Making Model

Answer 9

An 8 step model that is helpful in understanding how to make decisions and how decisions might be made. Some of the steps are complicated therefore analysis paralysis is a possibility.

Question 10

RDM the 8 Steps

Answer 10

1. Identify the Problem
2. Establish Decision Criteria
3. Weight Decision Choice
4. Generate Alternative
5. Evaluate Alternatives
6. Choose the Best Alternative
7. Implement the Decision
8. Evaluate the Decision

I evaluate with great excellent, choose in excitement

Please Consider All Decisions

Question 11

Satisficing

Answer 11

Accepting the first alternative that meets the minimum criteria

Question 12

Bounded Rationality

Answer 12

The idea that it is not possible for us to select all of alternatives because we are human and are limited to a manageable set of alternatives with the absence of an exhaustive analysis.

Question 13

Intuitive Decision Making

Answer 13

Using our past experience and expertise in order to make a decision in absence of all the information. You scan your environment for cues and act intuitively.

Question 14

Advocacy Decision Making

Answer 14

In this type of decision, you are trying to advocate for your choice. You are not necessarily balancing the arguments or trying to improve your choice via collaboration, rather you are taking a selfish approach to promoting your agenda forward.

Ex: Cuban Missile Crisis

Question 15

Inquiry Decision Making

Answer 15

This is when you try to make a decision based on the collaborative ideas and efforts of all those around, including people that are in opposition to you. In this type of decision making, you are trying to compromise and make the best points that benefit everybody the greatest. It stresses collaborate gain. This reminds me of Democratic Leadership

Ex: Airline Companys, They want to know what all sides think of there service

Question 16

Challenges of Decision Making

Answer 16

Anchoring
Availability
Escalation of Commitment
Fundamental Attribution Error
Satisficing 
Over Confidence

Question 17

Anchoring

Answer 17

Relying too heavily on irrelevant or singular information.

Ex: Focusing on the fact that North Korea has nuclear weapons as opposed to the fact that they do not have the governance to use them.

Question 18

Availability

Answer 18

Relying on more readily available information

Question 19

Escalation of Committment

Answer 19

You can think of that powerplant that kept funding there project despite constant and non stop opposition from the rest of community.

Question 20

Fundamental Attribution Error

Answer 20

Relying too much on your internal judgement or hard work and too little on the external circumstances of life.

Question 21

Over Confidence

Answer 21

Having too much belief in your ability to do something, despite not having all the reasons too. Think of it as self enhancement bias.

Question 22

Individual Decisions Pros

Answer 22

• Faster
• Clear
• Direct Accountability

Question 23

Individual Decisions Cons

Answer 23

• Fewer Ideas

- Possible Procrastination

Question 24

Group Decisions Pros

Answer 24

• Fun
• Greater Ideas
• Greater Comittment

Question 25

Group Decision Cons

Answer 25

• Time
• Social Loafing
• Group Think

Question 26

Technique for Group Decision Making

Answer 26

• Nominal Group Technique
• Majority Ruling
• Consensus

Question 27

Nominal Group Technique

Answer 27

This is a technique in which all members write ideas individually and then go around the whole group and discuss the ideas and there relevance.

We did this at Lazy-Faire

Question 28

Majority Ruling

Answer 28

You see this in politics, the person who gets the most votes or the idea that gets the most votes will be the one that the group selects

Question 29

Consensus

Answer 29

You see this on the Jury for Murder trials, unless there is a unanimous decision, then no decision will be made at all. It is either we all say yes or well all say no form of decision making.

Question 30

Decision Rules

Answer 30

The automated responses used to make programmed decisions