MGT 2010 Chapter 7
MGT 2010 Chapter 7 MGT 2010
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This 4 page Class Notes was uploaded by Catherine Feeney on Friday September 25, 2015. The Class Notes belongs to MGT 2010 at Clemson University taught by Robbins in Fall 2015. Since its upload, it has received 59 views. For similar materials see Principles of Management in Business, management at Clemson University.
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Date Created: 09/25/15
Chapter 7 MGT 2010 Decision a choice made from among available alternatives Decision making process of identifying and choosing alternative courses of action Rational Model of Decision Making Classical Model explains how managers should make decisions it assumes managers will make logical decisions that will be the optimum in furthering the organization s best interests Problems dif culties that inhibit achieving goals Opportunities situations that present possibilities for exceeding existing goals Non rational Models of Decision making explain how managers make decisions they assume that decision making is nearly always uncertain and rislq making it dif cult for mangers to make optimal decisions Non rational models are descriptive rather than prescriptive they describe how managers actually make decisions rather than how they should Intuition 39going with your gut It is making a decision without the use of conscious though or logical interference Decision Tree a graph of decisions and their possible consequences it is used to create a plan to reach a goal Big Data Analysis the process of examining large amounts of data of a variety of types to uncover hidden patterns unknown correlations and other useful information Four Ineffective Reactions 1 Relaxed Avoidance quottheres no point in doing anything nothing bad will happenquot In relaxed avoidance a manager decides to take no action in the belief that there will be no negative consequences 2 Relaxed Change manager realizes that complete inaction will have negative consequences but opts for the rst available alternative that involves low risk 3 Defense Avoidance a manager can t nds a good solution and ends up procrastinating passing the buck or denying the risk Heuristics strategies that simplify the process of making decisions Availability Bias managers use information readily available from memory to make judgements Representativeness Bias tendency to generalize from a small sample or single event Sunk Cost Bias when managers add up all the money already spent on a project and conclude its too costly to simply abandon it Overcon dence Bias people s subjective con dence in their decision making is greater than their objective accuracy Hindsight Bias tendency of people to view events as the being more predictable than they really are Group Think occurs when group members strive to agree for the sake of unanimity and thus avoid accurately assessing the decision situation Brainstorming technique used to help groups generate multiple ideas and alternatives for solving problems Electronic brainstorming is also called brain writing Overcon dence Bias when people think their own decision making is greater than objective accuracy Con rmation Bias Just tell me what I want to hear Only acknowledging the successes and not the failures Anchoring and Adjustment Bias an individuals tendency to make decisions based on an initial gure Relaxed Change you pick the rst reasonable option that comes to mind Framing Bias decision makers tendency to make decisions based on how to info is presented to them Before making a decision managers should think 1 Is it ethical 2 Is it feasible 3 Is it effective Delphi Technique group processes that uses physically dispersed experts to complete questionnaires and anonymously generate ideas System 2 Thinking conscious analytical and deliberate Predictive Model a data mining technique used to predict future behavior and anticipate consequences of change Satisfying Model of Decision Making emphasizes choosing the rst solution that meets criteria Goal Displacement when a primary goal is subsumed to a secondary goal Minority Dissent when a minority in a group opposes the majorities beliefs Ethics Of cer is a person trained about ethical things in the workplace Bounded Rationality managers ability to rationally make decisions is bounded by time money and complexity Escalation of Commitment throwing good money after bad Babson College s Working Knowledge Research Center multiple applications use of modeling support from the top Three things to help you deicide credibility urgency importance Prospect Theory decision makers feel that actual loss is more painful than giving up
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