MGT 300

Test 2

28 cards·by rob122150

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Choice made from among available alternatives

Decision

process of identifying and choosing alternative courses of action

decision making

Rational model of decision making

classical, assumes managers will make logical decisons that will be optimum in furthering the organization's interests

3 assumptions of rational model

complete information, logical/unemotional analysis, best decision for organization

assumes decision making is nearly always uncertain and risky

nonrational models of decision making

suggests that the ability of decision makers to be rational is limited by a number of constraints

bounded rationality

Rationality constraints

complexity, time and money, cognitive capacity/values/skills/habits, imperfect info, info overload, different priorities, conflicting goals

3 non-rational models

satisficing, incremental, intuition

managers seek alternatives until they find one that is satisfactory, not optimal

satisficing model

managers take small, short-terms steps to alleviate a problem

incremental model

making a choice without the use of conscious thought or logical inference, sources are expertise and feelings

intuition

reflects the combination of how an individual perceives and responds to information

decision-making style

4 decision making styles

analytical, conceptual, directive, behavioral

action-oriented, decisive, focus on facts; people are efficient, logical, practical and systematic in their approach to solving problems

analytical

considers more information and alternatives

analytical

takes a broad perspective to problem solving, considers more perspectives

conceptual

supportive, receptive to suggestions, show warmth

behavioral

three types of reactions

Importance, credibility, urgency

use of only available information, no or limited research

availability bias

generalizing from small sample

representativeness bias

seek information confirming own point of view

confirmation bias

look at investment and conclude that it is too costly to abandon it

sunk-cost bias

decisions made on a basis of an initial figure

anchoring & adjustment biases

confidence greater than accuracy

overconfidence bias

viewing events as more predictable than they were

hindsight bias

influence by way situation was presented

framing bias

commitment growing despite negative information

escalation of commitment bias

when can a group help decision making?

When it can increase quality, when it can increase acceptance, when it can increase development