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34 Cards in this Set
- Front
- Back
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Define "Decision Making" |
The conscious process of making choices among alternatives with the intention of moving towards some desired state of affairs. (Effective DMing involves identifying, selecting, and applying the best possible alternative) |
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Define "Rational Choice Paradigm" |
The view in decision making that people should - and typically do - use logic and all available information to choose the alternative with the highest value. |
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Define "Subjective Expected Utility" (SEU) |
The probability (expectancy) of satisfaction (utility) resulting from choosing a specific alternative in a decision. |
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What are the (6) steps in the Rational Choice Decision-Making Process? |
1) Identify the problem or recognize an opportunity 2) Choose the best decision process (meta-decision) -- solve problem alone vs. share with others, programmed decision vs. non-programmed decision 3) Identify and/or develop a list of possible choices (searching for ready-made solutions, design a custom-made solution, or modify existing one). 4) Select the choice with the highest SEU 5) Implement the selected alternative (assumed to occur without problems) 6) Evaluation of whether the gap has been narrowed between "what is" and "What ought to be" |
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What are some problems with the Rational Choice Paradigm? |
Seems logical but is impossible to apply in reality because people are not and cannot be perfectly rational. |
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What are (5) problems with Problem Identification? |
Stakeholder Framing, Decision Leadership, Solution-Focused Problems, Perceptual Defence, and Mental Models |
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What is "Stakeholder Framing" in the context of problems with problem identification? |
Employees, suppliers, customers, and any other stakeholders present (or hide) information in ways that makes the DM see the situation as a problem, opportunity, or steady sailing. DMs fall prey to this. |
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What is "Decisive Leadership" in the context of problems with problem identification? |
Executives are evaluated by their decisiveness, including how quickly they determine that the situation is a problem, an opportunity, or nothing worth their attention. Many leaders announce problems/opportunities before having a chance to logically assess the situation. |
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What are "Solution-Focused Problems" in the context of problems with problem identification? |
DMs engage in solution-focused problem identification because it provides comforting closure to otherwise ambiguous & uncertain nature of problems. |
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What is "Perceptual Defence" in the context of problems with problem identification? |
People sometimes fail to become aware of problems becuase they block out bad news as a coping mechanism. |
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What are "Mental Models" in the context of problems with problem identification? |
DMs are victims of their own problem framing due to existing mental models. |
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What are some ways to identify problems and opportunities more effectively? |
1) Becoming aware of the 5 problem identification biases 2) Leaders require considerable willpower 3) Leaders create a norm of Divine Discontent 4) Employees can minimize by discussing the situation with colleagues. |
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What is "Bounded Rationality"? |
The view that people are bounded in their decision-making cababilities, including access to limited information, limited information processing, and tendency towards satisficing rather than maximizing when making choices. (Herbert Simon) |
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What are (3) Biased Decisions Heuristics? |
1) Anchoring and Adjustment Heuristic: A natural tendency for people to be influenced by an initial anchor point such that they do not sufficiently move away from that point as new info is provided 2) Availability Heuristic: A natural tendency to assign higher probabilities to objects or events that are easier to recall from memory, even though ease of recall is also affected by non-probability factors. 3) Representativeness Heuristic: A natural tendency to evaluate probabilities of events or objects by the degree to which they resemble (or arerepresentative of)other objects rather than on object probability information. |
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What is "Satisficing"? |
Selecting an alternative that is satisfactory or "good enough", rather than the alternative with the highest value (maximization). |
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What is one of the problems with evaluating opportunities? |
Opportunities are seen as solutions so DMs don't evaluate several alternatives. Emotional attachment motives DMs to apply the opportunity and short circuit any detailed evaluation. |
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How do emotions affect evaluation of alternatives? |
1) Emotions form early preferences 2) Emotions change the decision evaluation process (e.g. more attention to detail when in negative moods) 3) Emotions serve as information when we evaluate alternatives |
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What is "Intuition"? |
The ability to know when a problem exists and to select the best course of action without conscious reasoning. (emotional experience and a rapid nonconscious analytic process). ** Relies on Action Scripts (programmed decision routines that speed up our response to pattern matches or mismatches) |
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What is "Scenario Planning"? |
A systematic process of thinking about alternative futures and what the organization should do to anticipate and react to those environments. |
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What is "Confirmation Bias"? |
Unwitting selectivity in the acquisition and use of evidence. |
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What is "Escalation of Commitment"? |
The tendency to repeat an apparently bad decision or allocate more resources to a failing course of action. Due to: *Self-Justification Effect *Self-Enhancement Effect *Prosperity Theory Effect *Sunk Costs Effect |
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What is "Prospect Theory Effect"? |
A natural tendency to feel more dissatisfaction from losing a particular amount than satisfaction from gaining an equal amount. |
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How can we evaluate decision outcomes more effectively? |
1) Minimize escalation of commitment & confirmation bias (DM =/= person evaluating decision) 2) Publically establish a preset level at which the decision is abandoned or re-evaluated 3) Find a source of systematic & clear feedback 4) Include/Involve several people in the evaluation |
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What is "Creativity"? |
The development of original ideas that make a socially recognized contribution. *An essential component of decision making as well as a powerful resource for corporate competitive advantage & individual career development. |
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What are the(4) steps of the Creative Process according to Graham Wallas? |
1) Preparation 2) Incubation 3) Illumination 4) Verification |
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What is "Divergent Thinking"? |
Reframing a problem in a unique way and generating different approaches to the issue (vs. convergent thinking). *Breaks away from existing mental models |
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What are the (4) main characteristics of creative people? |
1) Cognitive and Practical Intelligence 2) Persistence 3) Knowledge and Experience 4) Independent Imagination |
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What are some Organizational Conditions that support creativity? |
1) The organization has a Learning Orientation 2) Motivation from the job itself 3) Open communication & sufficient resources, job security, non-traditional workplaces, support from leaders/coworkers |
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What are some activities that encourage creativity? |
1) Hiring people with strong creative potential & building a work environment that supports creativity & various activities that help employees think creatively 2) Redefining the problem 3) Associative Play 4) Cross-Pollination |
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What is "Associative Play" in the context of activities that encourage creativity? |
Brings out creativity by literally engaging in playful activity |
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What is "Morphological Analysis"? |
Listing different dimensions of a system and the elements of each dimension and then looking at each combination. |
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What is "Employee Involvement"? |
The degree to which employees influence how their work is organized and carried out (varies with the situation). |
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What are the benefits of employee envolvement? |
1) Improves decision-making quality & commitment 2) Involving employees in company decisions can result in considerable benefits for both the company and employees 3) Improves DM (ID-ing of problems & opportunities, improves # & quality of solutions generated, and improves evaluation of alternatives) 4) Tends to strengthen employee commitment to the decision |
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What are (4) contingencies of Employee Involvement? |
1) Decision Structure 2) Source of Decision Knowledge 3) Decision Commitment 4) Risk of Conflict |
