Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
BUSM112 - CH 04
CH 04 : Foundations of Decision Making
| Term | Definition |
|---|---|
| Decision-Making Process | A set of eight steps that includes identifying a problem, selecting a solution, and evaluating the effectiveness of the solution. |
| Problem | A discrepancy between an existing and desired state of affairs. |
| Decision Criteria | Factors that are relevant in a decision. |
| Decision Implementation | Putting a decision into action. |
| Heuristics | Judgmental shortcuts or "rules of thumb" used to simplify decision making. |
| Rational Decision Making | Describes choices that are consistent and value-maximizing within specified constraints. |
| Bounded Rationality | Making decisions that are rational within the limits of a manager's ability to process the information. |
| Satisfice | Accepting solutions that are "good enough". |
| Escalation of Commitment | An increased commitment to a previous decision despite evidence that it may have been a poor decision. |
| Intuitive Decision Making | Making decisions on the basis of experience, feelings, and accumulated judgement. |
| Structured Problem | A straightforward, familiar, and easily defined problem. |
| Unstructured Problem | A problem that is new or unusual for which information is ambiguous or incomplete. |
| Programmed Decision | A repetitive decision that can be handled using a routine approach. |
| Procedure | A series of interrelated, sequential steps used to respond to a structural problem. |
| Rule | An explicit statement that tells employees what can or cannot be done. |
| Policy | A guideline for making decisions. |
| Nonprogrammed Decision | A unique and nonrecurring decision that requires a custom-made solution. |
| Certainty | A situation in which a decision maker can make accurate decisions because all outcomes are known. |
| Risk | A situation in which a decision maker is able to estimate the likelihood of certain outcomes. |
| Uncertainty | A situation in which a decision maker has neither certainty nor reasonable probability estimates available. |
| Groupthink | When a group exerts extensive pressure on an individual to withhold his or her different views in order to appear to be in agreement. |
| Brainstorming | An idea-generating process that encourages alternatives while withholding criticism. |
| Nominal Group Technique | A decision-making technique in which group members are physically present but operate independently. |
| Electronic Meeting | A type of nominal group technique in which participants are linked by computer. |
| Ringisei | Japanese consensus-forming group decisions. |
| Creativity | The ability to produce novel and useful ideas. |
| Describe the 8 Decision-Making Steps/Process | 1)ID problem 2)ID decision criteria 3)weight criteria 4)develop alternatives 5)analyze alternatives 6)select alternative 7)implement alternative 8)evaluate decision effectiveness. Heuristics may be used to simplify process which can lead to errors/biases. |
| Describe the 12 Decision-Making Errors & Biases | Overconfidence, immediate gratification, anchoring, selective perception, confirmation, framing, availability, representation, randomness, sunk costs, self-serving bias & hindsight. |
| Explain the Rational Model Approach to Decision-Making | The assumptions of rationality are that 1) the problem is clear and unambiguous. A single well-defined goal is to be achieved, all alternatives & consequences are known & final choice will maximize payoff. |
| Explain the Bounded Rationality Approach to Decision-Making | Says managers make rational decisions but are bounded (limited) by their ability to process information and make decisions that are "good enough". |
| Explain the Intuitive Approach to Decision Making | Decisions are made on the basis of experience, feelings and accumulated judgment. |
| What are the Two Types of Decisions Managers Face? | Programmed (structured) - repetitive & handled by routine approach. Problem is straightforward. Nonprogrammed (unstructured) - new problem where decision requires custom solution. |
| What are the Two Decision Making Conditions Managers Face? | Certainty, which involves a situation in which a manager can make accurate decisions because all outcomes are known; and uncertainty, where manager is not certain about outcomes and can't make reasonable probability estimates. |
| Discuss Group Decision Making | Groups offer certain advantages - more complete info, more alternatives, increased acceptance of a solution & greater legitimacy. Flip side is they're time-consuming, can be dominated by a minority, create conformance pressures and cloud responsibility. |
| What are Three Ways to Improve Group Decision Making? | Brainstorming, nominal group technique and electronic meetings. |
| What are Contemporary Issues in Managerial Decision Making? | Cultural diversity of employees, comfort level of employee involved with decision making, creativity in decision making and objectivity. |
Created by:
slk
Popular Business sets