Lesson 8 Flashcards
What are the 3 decision making categories?
- strategic decisions- set the course
- tactile decisions- how things get done
- operational decision- made everyday to run it
What are the 4 decision making approaches?
- bounded rationality decision making model
- creative decision making model
- intuitive decision making model
- rational decision making model
Define the rational decision making model
- steps considered to consider if their goal is to maximize the quality of their outcomes
- making the BEST LOGICAL choice
What are the assumptions the rational decision making model? People…
- completely understand the problem and agree that a decision must be made
- know all their available choices,
- have no perceptual biases, and,
- want to make optimal decisions.
What are the 8 steps of the rational decision making model?
- identify the problem
- establish decision criteria
- weigh decision criteria
- generate alternatives
- evaluate the alternatives
- choose the best alternative
- implement the decision
- Evaluate the decision
What are 2 issues when identifying the problem in the rational decision making model?
- people refer to solution instead of the problem
- tendency to make decisions not by evaluating each option but look at implicit favourites
What is the problem when identifying alternatives in the rational decision making model?
access to all information and looking at all pros and cons would be time consuming
What is analysis paralysis?
when you have too much info, a lot of time wasted on gathering and thinking and no decisions
What is the bounded rationality decision making model?
recognizes limitations, individuals knowingly limit their options to manageable set and choose first acceptable alternative
With the bounded rationality decision making model, what does it tend to do?
satisfice- accepting first alternative that meets minimum requirements
What is the main difference between satisficing and rational decision making model?
rather than choosing the BEST option and maximizing potential, you SAVE cognitive time and effort and choose the FIRST alternative that meets the min threshold
Explain the intuitive decision making model?
arriving at decisions without conscious reasoning (guessing, being lucky, just came to me)
What does the intuitive decision making model argue?
you scan the environment for cues to recognize patterns, then play a potential action though the outcome based on prior experience (training, knowledge, experience)
Does more than one choice considered at a time with the intuitive decision making model?
NO
What is a downside to the intuitive decision making model?
can be powerful, but harder to teach to decision makers
What are the five steps to - creative decision making model?
- problem identification
- Immersion
- Incubation
- Illumination
- Verification and application
Define the immersion step of - creative decision making model?
you consciously think about the problem and gather information
Define the incudbation step of - creative decision making model?
you set the problem aside and not think about it for a while, then the brain works on it unconciously
What are the three interactive factors where creativity occurs ?
- personality traits (openness, risk taking)
- attributes (expertise, imagine, motivation)
- situational context (encouragement, time pressure)
Name 5 decision making traps
- over confidence bias
- hindsight bias
- anchoring bias
- framing bias
- escalation of commitment
Explain over confidence bias
overestimate our abilities to do things
Explain hindsight bias
looking back in time and mistakes appear.. obvious they would have happened but symptoms were ignored
Explain anchoring bias
rely too heavily on a single piece of information
Explain framing bias
influenced by the way a situation or problem is presented
Explain escalation of Commitment
continue on a failing course of action after info reveals it may be a poor path to follow
What is a away to avoid escalation of Commitment? (2)
having strict turning back points, they could be financial or time based
create a climate where people do not fear admitting that their initial idea no longer makes economic sense
