MGMT Week 6 Notes
MGMT Week 6 Notes MGMT 3490-004
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This 3 page Class Notes was uploaded by Johanna Glaser on Wednesday September 28, 2016. The Class Notes belongs to MGMT 3490-004 at University of Nebraska at Omaha taught by Robert Ottemann in Fall 2016. Since its upload, it has received 23 views.
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Date Created: 09/28/16
Week 6 Notes Chapter 4 The Nature of Decision Making Decision Making o The act of choosing one alternative from among a set of alternatives Decision-Making Process o Recognizing and defining the nature of a decision situation, identifying alternatives, choosing the “best” alternative, and putting it into practice An effective decision optimizes some set of factors such as profits, sales, employee welfare, and market share Managers make decisions about both problems and opportunities Types of Decisions Programmed Decisions o A decision that is a fairly structured decision or recurs with some frequency or both Ex. Starting your car in the morning Non-programmed Decisions o A decision that is relatively unstructured and occurs much less often a programmed decision Ex. Choosing a vacation destination Decision-Making Conditions Decision Making Under Certainty o The decision maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative Decision Making Under Risk o The availability of each alternative and its potential payoffs and cost are all associated with risks Decision making under uncertainty o The decision maker does not know all the alternatives, the risks associated with each, or the consequences of each alternatives Assumptions of Rationality The problem is clear and unambiguous A single well defined goal is to be achieved All alternatives are consequences are known Preferences are clear Preferences are constant and stable No time or cost constraints exist Final choice will maximize economic payoff *lead to Rational Decision Making Behavioral Aspects of Decision Making Bounded Rationality o Decision makers are limited by their values and unconscious reflexes, skills, and habits Satisficing o The tendency to search for alternatives only until one is found that meets some minimum standard of sufficiency to resolve the problem Coalition o A positive or negative political force in decision making which consists of an informal alliance of individuals or groups formed to achieve a goal Intuition o An innate belief about something without conscious consideration Escalation of commitment o Staying with a decision even when it appears to be wrong Risk Propensity o The extent to which a decision maker is willing to gamble when making a decision Group and Team Decision Making in Organizations Forms of group decision making o Interacting group or team Consists of an existing group or newly formed team interacting and then making a decision o Delphi groups Developing a consensus of expert opinion from a panel of experts who individually contribute through a moderator o Nominal groups The process of generating and evaluating alternatives using a structured voting method Advantages Disadvantages 1. More information and knowledge 1. The process takes longer, so it is costlier are available 2. More alternatives are likely to be 2. Compromise decisions resulting from generated indecisiveness may emerge 3. More acceptance of the final decision 3. One person may dominate the group is likely
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