Decision Making Process: A Comprehensive Guide - Prof. Christopher P. Neck, Study notes of Introduction to Business Management

Download Decision Making Process: A Comprehensive Guide - Prof. Christopher P. Neck and more Study notes Introduction to Business Management in PDF only on Docsity! Decision making process- a set of eight steps that include id’ing a problem, selecting a solution, and evaluating the effectiveness of the solution Problem (step 1) - a discrepancy b/w an existing and a desired state of affairs Decision criteria (step 2) – factors that are relevant in a decision. Weight each criteria (step 3) List alts that could succeed in solving problem (step 4) Critically analyze each alt, rate each (step 5) Choosing the best alt by scoring (step 6) Decision implementation (step 7) - putting a decision into action; includes conveying the decision to the persons who will be affected by it and getting their commitment to it Appraise the result of the decision (step 8) Rational- describes choices that are consistent and value-maximizing within specified constraints A perfectly rational decision making is fully objective and logical Certainty- the implication that, in making a decision, the decision maker knows the outcome of every possible alt Risk- the probability that a particular outcome will result from a given decision Uncertainty- a condition in which managers do not have full knowledge of the problem they face and cannot determine even a reasonable probability of alt outcomes Creativity- the ability to produce novel and useful ideas Creative components- expertise, creative-thinking skills, and intrinsic tast motivation Satisfice- making a good enough decision Bounded rationality- behavior that is rational within the parameters of a simplified model that captures the essential features of a problem. Herbert Simon Heuristics- judgmental shortcuts Availability heuristic- the tendency for people to base their judgments on info that is readily available to them Representative heuristic- the tendency for people to base judgments of probability on things with which they are familiar. Wearing Michael Vick jersey and playing like him to go to NFL Escalation of commitment- an increased commitment to a previous decision despite negative info ie bidding more in blackjack when you lose Well-structured problems- straightforward, familiar, easily defined problems Ill-structured problems- new problems in which info is ambiguous or incomplete Programmed decision- a repetitive decision that can be handled by routine approach Procedure- a series of interrelated sequential steps that can be used to respond to a well- structured problem Rule- an explicit statement that tells managers what they ought or ought not to do Policy- a general guide that establishes parameters for making decision Nonprogrammed decisions- decisions that must be custom-made to solve unique and nonrecurring problems Expert systems- software that acts like an expert in analyzing and solving ill-structured problems Neural networks- software that is designed to imitate the structure of brain cells and connections among them Decision-making styles chart page 134 Directive- low torelance for ambiguity and rational way of thinking. Logical and efficient and typically make fast decisions that focus on the short term Analytic- high tolerance for ambiguity combined with rational way of thinking. Prefer to have complete info before making a decision, carefully consider many alts. Conceptual- someone who tends to be very broad in outlook and to look at many alts. Tend to focus on the long run and often look for creative solutions Behavioral- individual who thinks intuitively but has a low tolerance for uncertainity. Work well with others, are open to suggestions, and concerned about the individuals who work for them Nominal group technique- a decision-making technique in which group members are physically present but operate independently Ringisei- Japanese consensus-forming group decisions Work specialization- a component of organization structure that involves having each discrete step of a job done by a different individual rather than having one individual do the whole job. Unity of command- the management principle that no person should report to more than one boss Span on control- the number of subordinates a manager can direct efficiently and effectively Authority- the rights inherent in a managerial position to give orders and expect them to be obeyed Responsibility- an obligation to perform assigned activities