Learning Outcomes After this class, I will be able to:
1. Describe the steps in the decision-making process.
2. Identify the assumptions of the rational decision-making model.
3. Explain the limits to rationality .
4. Describe the actions of the bounded-rational decision maker.
5. Identify the two types of decision problems and the two types of decisions that are used to solve them.
6. Define heuristics and explain how they affect the decision-making process.
7. Identify four decision-making styles .
8. Describe the advantages and disadvantages of group decisions.
9. Explain three techniques for improving group decision making.
Staple or Paper Clip? Book or Movie? Friend or Foe? Apple or Orange? Good or Evil? Healthy or Unhealthy? Work or Play? Attack or Defend? Transparent or Fake? Positive or Negative? Freedom or Confinement? Bible or Football? Computer or Compassion?
Can you decompose a management problem and “recombine its elements in some new manner”?
Strategy is all about choice, which affects outcomes.
Strategy is differentiated from tactics or immediate actions with resources at hand by its nature of being extensively premeditated, and often practically rehearsed.
Strategies are used to make the problem easier to understand and solve.
Examples of Planning-Function Decisions
What are the organization’s long-term objectives?
What strategies will best achieve those objectives?
What should the organization’s short-term objectives be?
What is the most efficient means of completing tasks?
What might the competition be considering?
What budgets are needed to complete department tasks?
How difficult should individual goals be?
A set of eight steps that includes identifying a problem, selecting a solution, and evaluating the effectiveness of the solution
A discrepancy between an existing and a desired state of affairs
Factors that are relevant in a decision
The Decision-Making Process Exhibit 4.2
Criteria and Weight in Car-Buying Decision (Scale of 1 to 10) CRITERION WEIGHT Price 10 Interior comfort 8 Durability 5 Repair record 5 Performance 3 Handling 1 Exhibit 4.3
Assessment of Car Alternatives Exhibit 4.4
Weighting of Vehicles (Assessment Criteria X Criteria Weight) Exhibit 4.5
Putting a decision into action; includes conveying the decision to the persons who will be affected by it and getting their commitment to it.
Making Decisions: The Rational Model
The implication that the outcome of every possible alternative is known.
A condition under which there is not full knowledge of the problem and reasonable probabilities for alternative outcomes cannot be determined.
The probability that a particular outcome will result from a given decision.
Assumptions of Rationality Exhibit 4.6
What Is Creative Potential?
Understanding, abilities, knowledge, proficiencies, necessary in the field of creative endeavor.
The personality characteristics associated with creativity, the ability to use analogies, as well as the talent to see the familiar in a different light.
Intrinsic task motivation
The desire to work on something because it’s interesting, involving, exciting, satisfying, or personally challenging.