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37 terms

Chapter 10: decision making by individuals and groups

Def: programmed decision:
a simple, routine matter for which a manager has an established decision rule
Non-prgrammed decision:
a new complex decision hat requires a creative solution.
what is Programmed decision:
the manager performs this programmed decision activity on a daily basis, using an established procedure with the same clear goal in mind each time.
what is non-grammed decision:
buying out another company are non-programmed, providing a unique, un structured situation and requiring considerable judgment.
scheduling lunch hours for one's work group is example of what
program work
what is the decision making process:
1.recognize the problem and the need for a decision
2. identify the objective of the decision
3.gather and evaluate data and diagnose the situation.
4. gather and evaluate alternatives
5. select the best course of action
6. implement the decision
7. gather feedback
8. follow up
effective decisions:
a timely decision that meets a desired objective and is acceptable to those individuals affect by it
a logical, step by step approach to decision making, with a thorough analysis of alternatives and their consequences.
steps of rational model of decision
1. the outcome will be completely rational
2. the decision maker has a consistent system of preferences,which is used to chose the best alternative
3. the decision maker is aware of all the possible alternatives
4. the decision maker can calculate the probability of success for each alternative.
bounded rationality
a theory that suggests that there are limits to how rational decision maker can actually be.
bounded rationality model 4 assumptions:
1. mangers select the first alternative that is satisfactory
2. mangers recognize that their conception of the world is simple
3. managers are comfortable making decisions without determining all the alternatives
4. managers make decisions by rules of thumb, or heuristics.
to select the first alternative that is good enough because the costs in time and effort are too great to optimize.
shortcuts in decision making that save mental activity
z problem solving model:
-look at the facts and details
-what alternatives do the facts suggest
-can it be analyzed objectively
-what impact will it have on those involved
escalation of commitment:
the tendency to continue to support a failing course of action.
risk aversion:
the tendency to choose options that entail fewer risks and less uncertainty
cognitive style:
an individual's preference for gathering information and evaluating alternatives
a fast,positive force in decision marketing that is utilized at a level below consciousness and invokes learned patterns of information.
a process influenced by individual and organizational factors that result in the production of novel and useful ideas, products, or both
four stages of creative process:
preparation, incubation, illumination, and verification.
a positive force that occurs in groups when group members are stimulated to produce new solutions to problem through the process of mutual influence and encouragement with the group.
social decision schemes:
simple rules used to determine final group decision
a deterioration of mental efficiency, reality testing, and moral judgment resulting from pressures within the group.
social decision schemes:
truth wins, majority wins, two thirds majority, first shift
a deterioration of mental efficiency, reality testing, and moral judgment resulting from pressures within the group.
limits of group decision making:
groupthink, group polarization
group polarization:
the tendency for group discus sion produce shifts toward more extreme attitudes among members
7 techniques group decision:
brainstorming, normal group technique, devil's advocacy, dialectical inquiry, quality circles and quality teams, and self managed teams
generate as many ideas as possible, suspending evaluation until all of the ideas have been suggested.
characterizes of brainstorming:
participants are encouraged to build upon the suggestions of others, imagination is emphasized. Good technique for generating alternatives.
nominal group technique:
a structured approach to decision making that focuses on generating alternatives.
steps of nominal group technique:
1. individuals silently list their ideas
2. ideas are written on a chart one at a time until all ideas are listed
3. discussion is permitted but only to clarify the ideas. no criticism is allowed
4. written vote
devils advocacy:
a technique for prevention groupthink in which a group or individual is given the role of critic during decision making
dialectical inquiry:
a debate between two opposing sets of recommendations
quality circle:
a small group of employees who work voluntarily on comp nay time, typically one hour per week, to address work related problems such as quality control, cost reduction, production planning and techniques, and even product design.
quality team:
a team that is part of an organization's structure and is empowered to act on its decisions regarding product and service quality.
participative decision making:
decision making in which individuals who are affected by decisions influence the making of those decisions