Mgmt 311: Chapter 10 -- Decision Making By Individuals And Groups

Front 1

Programmed Decision

Back 1

a simple, routine matter for which a manager has an established decision rule

Front 2

Nonprogrammed Decision

Back 2

a new, complex decision that requires a creative solution

Front 3

Rationality

Back 3

a logical, step-
by-step approach to decision making, with a thorough analysis of alternatives and their
consequences

Front 4

Rational Model

Back 4

1. The outcome will be completely rational
2. The decision maker uses a consistent system of preferences to choose the best alternative
3. The decision maker is aware of all alternatives
4. The decision maker can calculate the probability of success for each alternative

Front 5

Bounded Rationality

Back 5

a theory that suggests that
there are limits upon how
rational a decision maker
can actually be

Front 6

Bounded Rationality
Model

Back 6

1. Managers suggest the first satisfactory alternative
2. Managers 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

Front 7

Heuristics

Back 7

shortcuts in decision
making that save mental activity

Front 8

Bounded Rationality
Model

Back 8

1. Managers suggest the first satisfactory alternative
2. Managers 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

Front 9

Heuristics

Back 9

shortcuts in decision
making that save mental activity

Front 10

Garbage Can Model

Back 10

a theory that contends that decisions in organizations are random and unsystematic

Goes into the Trash:
Problems
Choice opportunities
Solutions
Participants

Front 11

Garbage Can Model

Back 11

a theory that contends that decisions in organizations are random and unsystematic

Goes into the Trash:
Problems
Choice opportunities
Solutions
Participants

Front 12

Risk Aversion
[Risk and the Manager]

Back 12

the tendency to choose options that entail fewer risks and less uncertainty

Front 13

Risk Aversion
[Risk and the Manager]

Back 13

the tendency to choose options that entail fewer risks and less uncertainty

Front 14

Risk takers

Back 14

-accept greater potential for loss
-tolerate greater uncertainty
-more likely to make risky decisions
Evidence: Successful Managers Take Risks

Front 15

Risk takers

Back 15

-accept greater potential for loss
-tolerate greater uncertainty
-more likely to make risky decisions
Evidence: Successful Managers Take Risks

Front 16

Escalation of 
Commitment

Back 16

The tendency to continue to commit resources to a failing course of action

Front 17

Why does escalation of Commitment occur?

Back 17

Why it occurs
humans dislike inconsistency
optimism
control
sunk costs
How to deal with it
split responsibility for decisions
provide individuals with a graceful exit
have groups make the initial decision

Front 18

Intuition
[Influences on Decision Making]

Back 18

fast, positive force in decision making utilized at a level below consciousness, involves learned patterns of information

Front 19

Creativity
[Influences on Decision Making]

Back 19

a process influenced by individual and organizational factors that results in the production of novel and useful ideas, products, or both

Front 20

Influences on Creativity

Back 20

Individual & Organizational

Front 21

Individual Influences on Creativity

Back 21

Individual examples
Cognitive Processes
Divergent Thinking
Associational Abilities
Unconscious Processes
Personality Factors
breadth of interests
high energy
self-confidence

Front 22

Organizational Influences on Creativity

Back 22

Flexible organization structure
Participative decision making
Quality, supportive relationships with supervisors

Front 23

Conceptual Blocks
to Creativity

Back 23

Vertical thinking
Single language thinking
Stereotyping based on past experiences
Ignoring commonalities
Artificial constraints
Separating figure from ground
Noninquisitiveness
Bias against thinking

Front 24

Group Decision Making Advantages

Back 24

1. more knowledge through pooling of group resources
2. increased acceptance and commitment due to voice in decisions
3. greater understanding due to
involvement in decision stages

Front 25

Group Decision Making Disadvantages

Back 25

1. pressure in groups to conform
2. domination by one forceful member or dominant clique
3. amount of time required, because group is slower than individual to make a decision

Front 26

Groupthink
[Group Phenomenon]

Back 26

a deterioration of mental efficiency, reality testing, and moral judgment resulting from in-group pressures

Front 27

Group Polarization
[Group Phenomenon]

Back 27

the tendency for group discussion to produce shifts toward more extreme attitudes among members

Front 28

Group
Decision
Techniques

Back 28

1. Brainstorming
2. Nominal Group Theory
3. Delphi Technique
4. Devil's Advocacy
5. Quality Circles and Quality Teams
6. Dialetical Inquiry
7. Self-Managed Teams

Front 29

Technological Aids to Decision Making

Back 29

Expert Systems
Decision Support Systems
Group Decision Support Systems

Front 30

Expert Systems

Back 30

a programmed decision tool set up using decision rules

Front 31

Decision Support Systems

Back 31

computer and communication systems that process incoming data and synthesize pertinent information for managers to use

Front 32

Group Decision Support Systems

Back 32

systems that use computer software and communication facilities to support group decision-making processes in either face-to-face meetings or dispersed meetings