Intro Flashcards
What is business decision making?
A process of making choices which commit the origination to the attainment of long-range strategic objectives
What does business research do?
Helps generate viable alternatives for effective decision making and strategic choice
What are the decision types?
- Programmed decisions
* Non-programmed decisions
What are programmed decisions?
- Routine, not complex, not much thinking
- Lower/middle management
- No need for research
What are non-programmed decisions?
- Complex, require in depth consideration
- Middle/top management
- Research helps to make these
What is the structure of non-programmed decisions?
- Complex, unfamiliar, nonrecurring problems
- Uncertain of the cause/effect relationships and all the factors that impinge on the problem
- Incomplete information
- No clear solution and alternative
What are the different decision making strategies?
- Computational
- Compromise
- Judegemtnal
- Inspirational
What is a computational decision making strategy?
- Strong preference for the outcome
- High knowledge regarding the outcome
What is a compromise decision making strategy?
- Weak preference for the outcome
- High knowledge regarding the outcome
What is a judgemental decision making strategy?
- Strong preference for the outcome
- Low knowledge regarding the outcome
What is a inspirational decision making strategy?
- Weak preference for the outcome
- Low knowledge regarding the outcome
What is the difference between normative/descriptive?
- Normative
- Describe how decisions should and ought to be made
- They capture what should happen in decision making
- Descriptive
- What actually happens in decision making
What is the open decision model?
- Decision maker has an objective that is representative of their aspiration level and preferences
- Decision maker engages in search activity and defines a limited number of alternatives and outcomes
- A satisfactory solution is chosen based on analysis of expected utility of each alternative
When are managerial objectives most effective?
- Clear, specific and relevant to organisational objectives
- Challenging but attainable
- Realistic and practical
- Measurable
What is the overall process of the open business decision making model?
- Set managerial objectives
- Search for alternatives
- Compare and evaluate alternatives
- Act of choice
- Implement decisions
- Follow up and control
