Module 4 Flashcards
Summarize the steps in “rational” decision making.
-Identify and diagnose the problem
-Generate alternative solutions
-Evaluate options
-Choose a solution
-Implement the decision
-Evaluate the decision
Generate alternative solutions
-ready made solutions: ideas that have been used or tried before
-custom made solutions: new creative solutions designed specifically for the problem.
Choose a solution
-Maximizing is achieving the best possible outcome.
-Satisficing is choosing the first option that is minimally acceptable or adequate.
Recognize the pitfalls you should avoid when making decisions.
-You never know if the decision you made was the right one.
-The best you can do is follow proper procedure.
-System 1 information processing
-System 2 information processing
System 1 information processing
A type of decision-making process that is reflexive and done quickly without careful thought.
System 2 information processing
A type of decision-making process that is reflexive and done slowly with deliberative thought.
Evaluate the pros of process of group decision making.
-larger pool of information
-more perspective and approaches
-Intellectual stimulation
-people understand the decision
-people are committed to the decision
Evaluate the cons of process of group decision making.
-One person dominates
-Satisficing
-Groupthink
-Goal displacement
-Social loafing
How are decisions made within an organization?
-The constraints decision makers face that limit decisions: Resources, Consumers, Finances, Laws, and Labor
-Organizational decision processes: bounded rationality, incremental model, and garbage can model
How are decisions made during a crisis?
-Crisis management: process of identifying, preparing for, and dealing with potentially catastrophic threats to an organization.
-Decisions made under pressure
Bounded rationality
A less-than-perfect form of rationality in which decision makers cannot be perfectly rational because decisions are complex and complete information is unavailable or cannot be fully processed.
Incremental model
model of organization decision making in which major solutions arise through a series of smaller decisions.
Garbage can model
model of organizational decision making depicting a chaotic process and seemingly random decisions
Sunrise Health Systems has hired a consultant to help with organizational decision making. The consultant’s first meeting is set up to explain to the managers of Sunrise Health Systems various models of organizational decision processes. Each of the managers seems to prefer one of the models over the others.
The vice president of human resources believes that decision makers cannot be truly rational in their decisions. He tells the group that he sees many situations with managers who do not have enough time to process all the relevant information and who regularly face very complex problems. His observation illustrates
Bounded rationality
Sunrise Health Systems has hired a consultant to help with organizational decision making. The consultant’s first meeting is set up to explain to the managers of Sunrise Health Systems various models of organizational decision processes. Each of the managers seems to prefer one of the models over the others.
The vice president of production declares that her people disagree on goals and have now formed groups to advocate for their own interests. Her managers are using
The coalition model
Sunrise Health Systems has hired a consultant to help with organizational decision making. The consultant’s first meeting is set up to explain to the managers of Sunrise Health Systems various models of organizational decision processes. Each of the managers seems to prefer one of the models over the others.
The president of the company tells his team that he has made an observation that the managers do not agree on goals or what actions should be taken. This situation best relates to
The garbage can model
Jamila works in the marketing department at Intelligentsia, a cutting-edge start-up in the process of launching Xanadu, a smart-home/smart-garden technology system. After a very successful crowdfunding campaign and an influx of new angel investors, the company’s future is looking bright. The start-up’s founders, Han and Martine, are very rational decision makers, balancing optimism with the understanding that most start-ups, and tech start-ups in particular, face many risks at every stage of development. Their partner Gerard, however, makes decisions more subjectively and believes he is in control of all situations, even if he is not. Based on the psychological bias Gerard exhibits, which of the following most likely describes his actions?
He dismisses risks, is overconfident in his experience and skills, and believes that he is immune to failure.
According to Simon’s bounded rationality, which of the following factors prevents decision makers from being truly rational?
The have incomplete information about alternatives and consequences.
Gina owns a fashion-design store and knows the economy greatly affects her business. Experts are predicting four potential economic outcomes over the next five years. Therefore, Gina develops alternative courses of action based on these predictions. In this scenario, she is
Generating contingency plans
Safa has identified a problem that consists of a gap between what her company is doing now and what it can do to create a more profitable future. The “problem” that Safa has identified is also a(n)
Opportunity
Emil has been going through the decision-making process. He diagnosed a problem with the shipping service his company used, identified alternative shipping services, evaluated those companies, made a choice, and implemented it. Which of the following statements is an accurate description of Emil’s decision-making process?
Emil now needs to evaluate the decision he made.
The ideal decision-making process includes six phases:
- identify and diagnose the problem
- generate alternative solutions
- evaluate alternatives
- make the choice
- implement the decision
- evaluate the decision
“We have 75 qualified candidates for the quarterly training program but only 25 slots,” said Toby Spencer, production manager. “In that case, randomly select 25, and we will train the other candidates later this year during the next rounds of training,” said Amelia Stone, division manager. Toby Spencer says, “That will work.” This is an example of
Satisficing
What is the best example of a manager discounting the future?
A manager focusing in quarterly profits instead of long-term vision
“My idea will make us a lot of money, and it’s by far the best idea offered!” John exclaimed. His division manager replied, “I agree that your idea has promise. However, your idea has no supporting data or facts. Meanwhile, your two colleagues submitted business plans for their ideas that specified gains of 15 and 22 percent, respectively, and their plans were submitted last week before the deadline expired.” John was using ________ to advance his position.
Framing effects
What about group decision making is true?
If enough time is available, groups usually make higher-quality decisions than most individuals.
In goal displacement, a decision-making group
Loses sight of it original goal and a new, less important goal emerges
Devon’s workers come from a predominantly transient population. However, he believes as long as he pays his employees good wages and treats them fairly, he can keep employee turnover to a minimum. Devon’s belief is an example of which psychological bias?
Illusion of control
