Chapter 7 and part of eight
Chapter 7 and part of eight MGMT 300
Popular in Principles of Management
verified elite notetaker
Popular in Business, management
This 5 page Class Notes was uploaded by Kara Notetaker on Tuesday March 8, 2016. The Class Notes belongs to MGMT 300 at University of North Dakota taught by Nikolaus Butz in Spring 2016. Since its upload, it has received 6 views. For similar materials see Principles of Management in Business, management at University of North Dakota.
Reviews for Chapter 7 and part of eight
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 03/08/16
Decision- a choice taken from many different opportunities Decision Making- is the process of analyzing a situation and choosing the best choice given the situation General Decision-Making Styles- 1. Risk Propensity- willingness to take a risk for the possibility for a larger gain 2. Decision making style- how a person might understand and react to information a. Value Orientation – whether a person focuses on tasks and technical issues or people and social issues b. Tolerance for Ambiguity – depends on how much an individual needs control or a structure in their life Decision Making Styles a. Directive- a logical and efficient style that focuses on facts i. Tend to only have a short-run view b. Analytical- likes to have a lot of facts and choice i. Usually takes them a lot longer to make a decision c. Conceptual- use their intuition and view long run, willing to take risks i. May be indecisive d. Behavioral- people orientated, willing to hear suggestions i. Avoidant of conflict and cannot say no easily Decision Making Biases 1. Availability bias- recent behavior is used to make judgments 2. Representativeness (ignoring randomness) bias- they generalize situations to help them make a decision 3. Confirmation (prior hypothesis) bias- seeking data that helps you decision and ignoring any data that does not 4. Sunk Cost Bias- figuring that all the money you put on a project is too expensive to stop 5. Anchoring (adjustment) bias- making decision based on an initial figure even though it may be realistic regarding the market 6. Overconfidence bias- believing that something will go their way even though it doesn’t seem likely from an outstanding view 7. 20-20 hindsight bias- viewing an event as predictable after the fact even though it wasn’t from the beginning 8. Framing bias- allowing the presentation of a situation or problem change your thoughts about the issue 9. Escalation of Commitment bias- increasing your support of a project even when there is negative information Rationale Model of Decision Making (classical model) - helps managers make the logical decision, assuming that the managers make the most logical choice that will help the organization 1. Identify a. This stage is where you identify whether there is a problem or an opportunity b. Problems- anything that can hinder an organization c. Opportunities- anything that can help an organization to reach its goals d. Diagnosis- figuring out the cause 2. Alternate solutions a. This stage consists of trying to figure out what will fix the problems or optimize an opportunity for an organization 3. Evaluate a. This is the stage where you compare all possible solution and choose the best one 4. Implementation a. The last stage where you put into action the decision that was made and examine the effects of the decision Nonrational Model of Decision Making – when the decision is a more uncertain and risky, usually the real way that managers make decisions 1. Satisficing- “good enough” mentality, a decision will work but won’t succeed 2. Bounded rationality – rational is limited due to effecting factors a. Too much information b. Limitations of time and money c. Other priorities d. Conflicting goals e. Imperfect information 3. Incremental – making small steps towards resolving an issue a. Doing the least amount to solve a problem 4. Intuition – going with your gut a. Intuition- decision made on the basis of emotions, gut feelings or your subconscious b. Holistic Hunch – explicit knowledge about a person, situation or a present opportunity i. Explicit knowledge- information that is easy to pass from person to person ii. Tacit knowledge – information that is difficult to share from person to person c. Benefits i. Faster decisions ii. Helps when resources may be limited d. Drawbacks i. Others might now agree ii. Bases on biases Group Decision Making 1. 5 Advantages a. More Knowledge b. Different views c. Brainstorming d. Better able to express reasons for a decision e. More involved in the decision 2. 4 disadvantages a. One or two people in a group tend to take control b. Groupthink- when people tend to agree just to be a part of the group even though the decision may not be the right one c. Satisficing- people tend to agree just to end the meeting d. Goal Displacement- happens when a lesser goals is brought forward while the more important goal is ignored 3. 4 Tips a. Group decision making can be less efficient b. The bigger the group the lower the quality of the decision c. Overconfidence may occur d. Not everyone in the group knows a lot about the situation they are trying to figure out while others may know a lot about the situation Evidence-based Decision Making- taking information and using it to make principles for organizations 1. An organization is an unfinished 2. Just facts 3. Take an outside view in 4. Not just for top level executives 5. Make it sell able 6. What if something goes wrong 7. Don’t worry Analytics (Business analytics) – fancy term for the analytical view of data involving an organization 1. Predictive modeling- used to predict future actions and possible solutions 2. Portfolio analysis – advisors evaluate the risk of possible stocks 3. Time-Series forecast- using past data to predict future data 4. Data Mining (Big Data) – using large data deposits for analytics Business Ethics - Decision Tree o Do it Is it ethical yes ^ no\/ Does it optimize its value -yes ^ - Don’t do it o Is it legal -yes ^ no –don’t do it l_no \/ Is it ethical no\/ yes – do it Do it but give out the information to the shareholders Participative Management- involving employees in the process of creating goal, decisions, changes and solving problems Brainstorming- a technique used to create ideas and discuss them within a group - Electronic Brainstorming- brainstorming done over a computer network Consensus- when members of a group come to a mutual agreement Chapter 8 7 Elements of an Organization 1. Common purpose- a unified standing between the company and its workers and gives an organization’s its reason for being 2. Coordinated effort- all the efforts of the individuals working in an organization added together to equal the organizations effort 3. Division of Labor- having people working on the same project just different parts to make the work more efficient 4. Hierarchy of authority- a system used to ensure that tasks are completed on time a. Unity of command- each employee should only have one manager to report to 5. Span of control- the number of employees reporting to one manager a. Narrow- an organization has more levels allowing managers to have smaller groups underneath them b. Wide- an organization more spread out that has manager with large groups of employees underneath them 6. Authority-the right to someone in a manager’s position to order employees and make decisions a. Accountability- a manger has to report to the people above him about the decisions he has made and the reasons behind them b. Responsibility- managers completing tasks assigned to them in a timely fashion c. Delegation- giving tasks to lower level managers to be completed d. 2 classifications i. Line position- managers who are able to make decisions and have other employees reporting to them ii. Staff position- employees who can give advice and recommendations to line managers but cannot give orders 7. Centralization vs. Decentralization- the part of an organization that makes the important decisions a. Centralized- the top of the hierarchy is usually the part of the organization that makes the important decisions b. Decentralized- the important decision making is delegated throughout an organization Organizational Designs- the structure that an organization might create to make sure its performance it’s efficient and accountability and responsibility are in check 1. Traditional designs-this design implements vertical levels of hierarchy and solid department boundaries a. Simple- a single person is in charge and is has a flat hierarchy b. Functional- an organization designed to have people with similar job descriptions to work together c. Divisional- people with more diverse job descriptions working together in formal groups d. Matrix- combines function and divisional designs to create a more grid like design where people have two command chains 2. Horizontal- a design where groups are created either permanently or temporary to help an organization to complete tasks, groups may report to more than one manager a. Boundary-spanning workgroups 3. Boundary-less designs- an adaptive strategic design that can help an organization be prepared for any situation a. Hollow(network)- a design that allows a company to outsource from the primary core of the organization b. Modular- this design that allows an organization to assemble parts by outsourcing c. Virtual- an organization that has its employees connected through online networks such as skype, email and messaging, created for temporary markets
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'