Decision Making

Front 1

Classical Model: Rational Decision Making

Back 1

A decision making model based on the

assumption that managers should make logical decisions that will be in the organisation's best interest

Front 2

Classical Model: Assumption 1

Back 2

The decision maker operates to accomplish goals that are known and agreed upon

Front 3

Classical Model: Assumption 2

Back 3

The decision maker strives for conditions of

certainty, gathering complete information

Front 4

Classical Model: Assumption 3

Back 4

Criteria for evaluating alternatives are known

Front 5

Classical Model: Assumption 4

Back 5

The decision maker is rational and uses logic to assign values, order preferences, evaluate

alternatives and make the decision that will

maximize the attainment of organisational goals

Front 6

Wha is normative? What model is considered normative?

Back 6

An approach that defines how decision maker should make decisions & provides guidelines for reaching an ideal outcome for the organisation

Classical.

Front 7

Administrative Model

Back 7

A decision making model that describes how managers actually make decisions in situations characterised by non-programmed decisions,

uncertainty and doubt

Recognises human & environmental limitations

Front 8

What is descriptive? What model is

descriptive?

Back 8

An approach that describes how managers

actually make decisions rather than how they

should

Administrative.

Front 9

Concepts of the Administrative Model

Back 9

1. Bounded Rationality

2. Satisficing

Front 10

Bounded Rationality

Back 10

The concept that people have the time and

cognitive ability to process only a limited amount of information on which to base decisions

Front 11

Satisficing

Back 11

To chose the first solution alternative that

statisfies minimal decision criteria regardless of whether better solutions are presumed to exist

Front 12

Administrative Model also...

Back 12

Uses incomplete & imperfect information

Front 13

What is intuition? What model uses intuition?

Back 13

Immediate understanding of decision situation based on the past experience but without a

conscious thought

Front 14

Political Model

Back 14

Useful for making non-programmed decisions when conditions are uncertain, information is limited and there is disagreement among

managers about course of action to take

Front 15

What is coalition? What model uses coalition?

Back 15

An informal alliance among managers who support a specific goal

Political.

Front 16

Political Model: Assumption 1

Back 16

Organisations are madde up of groups with

diverse interests, goals and values

Front 17

Political Model: Assumption 2

Back 17

Information is not clear and incomplete

Front 18

Political Model: Assumption 3

Back 18

Managers don't have the time, resources or mental capacity to identify all dimensions of the problem and process all relevant information

Front 19

Political Model: Assumption 4

Back 19

Managers engage in the push & pull of debate to decide goals and discuss alternatives

Front 20

Decision-making: Step 1

Back 20

Recognition of decision requirement

-Problem, where organisational

accomplishments have failed to meet

established goals

-Opportunity, where managers see potential

organisational accomplishments that exceed current goals

Front 21

Decision-making: Step 2

Back 21

Diagnosis and analysis of causes

Analyse causal factors associated with the

decision making

Front 22

Decision-making: Step 3

Back 22

Development of alternatives

Generate possible alternative solutions that will respond to the needs of the situation and

correct the underlying causes

Front 23

Decision-making: Step 4

Back 23

Selection of desired alternative

The best is the one in which the solution best fits the overall goals & values of the organisation & achieves the desired results using the fewest

resources

Front 24

What is risk propensity? What step uses it?

Back 24

The willingness to undertake risk with the

opportunity of gaining an increased pay-off

Step 4

Front 25

Decision-making: Step 5

Back 25

Involves the use of managerial, administrative and persuasive abilities to ensure that the

chosen alternative is carried out

Front 26

Decision-making: Step 6

Back 26

Decision maker gather information that tells them how well the decision was implemented and if it was effective

Front 27

Why do managers make bad decisions? (6)

Back 27

-Influenced by initial impressions

-Justifying past decisions

-See what you want to see

-Continuing the status quo

-Being influenced by problem facing

-Overconfidence