Chapter 9
Management 309 with Wesson at Texas A&M University
About this deck
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have used this website for three exams, and I see a huge difference in my test results.”
Naj
Naj
Sign up (free) to study this.
Decision making
The art of choosing one alternative from among a set of alternatives
The steps of Decision making process
1 Recognize and defining the decision situation
2 identifying alternatives
3 choose the best alternative
4 putting alter into practice
Decision making under risk
availability of each alternate and its potential payoffs and cots are all assoicated with risks
3 Factors that prevent rationality
Unclear means-end relations: its impossible to generate an exhaustive list of alternatives then select the most
Lack of consensus: there must be a general agreement of the definition of problems, decisions and decision-making goals at the begining
Noisy Environment: the link between outcome and actions is hard to predict
Satisficing
The tendency to search for alternatives only till one is found that meets some minimum standard of sufficency to resolve the problem
Base rate bias
Base rate is the initial problem given no other info.
-Bias occurs when people put too much weight on evidence provided, or additional info and not enough weight on the info provider by the base rate
Components of managerial ethics
-Relationships of the firm to employees
-Employees to the firm
-Firm to other economic agents
Brainstorming
-Ciritisim not allowed
-free wheeling is welcomed
-quanitiy is encouraged
-combination and omprovement are sought
What 4 factors make up an effective decision
profits
sales
employee welfare
market share
Managers make decisions on what 2 things?
problems and opportunities
Programmed decisions, example?
A decision that is fairly structure decision or recurs with some frequency or both
Ex: starting car in the morning
Ex: starting car in the morning
Nonprogrammed decisions, example?
a decision that is relatively unstructured and occurs much less often a programmed decision
Ex: choosing a vacation destination
Ex: choosing a vacation destination
What are the 3 decision making conditions
1 decision making under certainty
2 decision making under risk
3 decision making under uncertainty
Decision making under certainty
A condition in which the decision maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative
Decision making under uncertainty
Condition in which the decision maker does not know all the alternatives, the risks associated with each, or the consequences of each alternative
What are the 8 behavior aspects of decision making
Bounded rationality
Satisficing
Coalation
Intuition
Escalation of Commitment
Risk Propensity
Ethics and decision making
Base rate bias
Bounded Rationality
The concept that decision makers are limited by their values and unconscious reflexes, skills, and habits
Coalition
Political force in decision making which consists of an informal alliance of individuals or groups formed to achieve a goal
Intuition
An innate belief about something without conscious consideration
Escalation of commitment
A decision maker is staying with a decision even when it appears to be wrong
Risk propensity
The extent to which a decision maker is willing to gamble when making a decision
Ethics and decision making
Individual ethics (personal beliefs about right and wrong behavior) combine with the organizations ethics to create managerial ethics
What are the 3 forms of group decision making
Interating groups or teams
Delphi groups
Nominal groups
Interacting groups
Most common form of decision making groups which consist of an existing group or newly formed team interacting and then making a decision
Delphi groups
Sometimes used for developing a consensus of expert opinion from a panel of experts who individually contribute through a moderator
Nominal groups
Are a structured technique designed to generate creative and innovative ideas through the individual contributions of alternatives that are winnowed down through a series of rank ordering of the alternatives to reach a decision
What are the 3 disadvantages to group and team decision
Group think
Compliance
Choice Shift
What is group think as it relates to disadvantages to group and team decision
The groups desire for consensus and the cohesiveness overwhelms its desire to reach the best possible decision
what is compliance as it relates to disadvantages to group and team decision
People conform to others expectations or behaviors in the hope of acquiring rewards or avoiding punishment
what is choice shift as it relates to disadvantages to group and team decision
Tendency for groups to make decisions that appear more extreme than the decisions group members would have made on their own
What are the 7 ways managers can promote effectiveness of group and team decision making?
LOOK IN NOTES PACKET
About this deck
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have used this website for three exams, and I see a huge difference in my test results.”
Naj
Naj