identifying and choosing alternative solutions that lead to a desired state of affairs
The Rational Model
Proposes that managers use a rational, four step approach to decision making
Rational Model 4 Stages
- 1) Identify problem or opportun
- 2) Generate alternative solutions
- 3) Evaluate alternatives and select a solution
- 4) Implement+Evaluate the solution chosen
-Model shows managers are completely objective and possess complete information to make a decision
Nonrational Models (3)
- -attempt to explain how decisions are actually made
- 1)decision making is uncertain
- 2)decision makers do not possess complete info
- 3)Difficult for managers to make optimal decisions
represents the notion that decision makers are "bounded" or restricted by a variety of constraints when making decisions
Choosing a solution that meets some minimum qualifications, one that is "good enough"
Simon's Normative Model (4)
- most frequent causes of poor decision making:
- 1)Poorly defined processes and practices
- 2)Unclear company vision, mission, and goals
- 3)Unwillingness of leaders to take responsibility
- 4)Lack of reliable, timely information
Garbage Can Model
- -Decision making is sloppy and haphazard
- -Decisions result from complex interaction of 4 independent streams of events: problems, solutions, participants, and choice opportunities
Implications of Garbage Can Model (4)
- 1)More pronounced in industries that rely on science-based innovations.
- 2)Many decisions are made by oversight
- 3)Political motives frequently influence decision makers
- 4)Important decisions are more likely to be solved
- Rules of thumb or shortcuts that people use to reduce information processing demands
- (use without conscious awareness, can lead to systematic errors)
- -represents a decision maker's tendency to base decisions on info that is readily available in memory.
- -likely to cause ppl to overestimate occurrence of unlikely events (plane crash)
- -PPT Ex: Jan-Oct. not good work performance, Nov. Dec. worked harder, manager evaluates him as outstanding (recency factor)
- -used when ppl estimate probability of an event occurring.
- -Ex: manager may hire UMD grad b/c they hired 3 in the past and they're good workers.
Confirmation Bias (two components)
1)subconsciously decide something before investigating why it is the right decision. Leads to component 2) seek information that supports investigation while discounting info that does not.
- occurs when decision makers are influenced by the first information received about a decision, even if it is irrelevant.
- -happens b/c initial info anchors our subsequent judgments and decisions
-tendency to be over confident about estimates or forecasts. This bias is strong when asked hard questions.
- -occurs when knowledge of an outcome influences our belief about the probability that we could have predicted the outcome earlier.
- -OBM pop quiz and monday night football example in book pg. 336.
- -bias related to the manner in which a question is posed.
- -encouraged to frame decision questions in alternative ways to avoid bias.
- -tendency to stick to an ineffective course of action when it is unlikely that the bad situation can be reversed. (investing more $ into old car)
- -reduce bias by: set min. targets for performance+have dec. makers compare performance against targets. AND regularly rotate managers in key positions throughout a project. AND encourage makers to be less ego-involved. AND make makers aware of costs of persistence
Evidence Based Decision Making (EBDM)
- -Represents a process of conscientiously using the best available data and evidence when making managerial decisions.
- -Use of relevant+reliable data from diff. sources clearly intended to make any decision making context more explicit,critical,systematic,and fact based
Model of EBDM (5 steps)
- 1)Identify Problem/Opportunity
- 2)Gather internal evidence/data about problem+evaluate its relevance+validity
- 3)Gather external evidence about problem from published research
- 4)Gather views from stakeholders affected by decision and consider ethical implications
- 5)Integrate+critically appraise all data and then make a decision
Combination of how individuals perceive and respond to information
reflects the extent to which an individual focuses on either task and technical concerns or people and social concerns when making decisions
Tolerance for Ambiguity
- Extent to which a person has a high need for structure or control in his life
- -KNOW FIGURE 12-3, slide 26
- -these ppl are efficient, logical, practical, systematic in approach to solving problems.
- -pursuit of speed and results causes them to be autocratic, exercise power and control, focus on short run (air traffic controller)
- -tendency to over-analyze a situation.
- -consider more alternatives and information
- -take long time to decide, respond well to new/uncertain situations
Decision Styles: Conceptual
- -High tolerance for ambiguity and focus on ppl/social events of a work situation.
- -consider many options, long-term perspective and rely on intuition and discussions w/ others to acquire info. find creative solutions
- -can foster indecisive approach
Decision Styles: Behavioral
- -Most ppl oriented of all 4 styles.
- -supportive, receptive to suggestions, show warmth, prefer verbal info.
- -avoid conflict, too concerned w/ others, hard time saying no to others+making hard decisions
represents judgments, insights, or decisions that "come to mind on their own, w/o explicit awareness of the evoking cues and of course w/o explicit evaluation of the validity of these cues"
Model of Intuition:Holistic Hunch
judgment based on a subconscious integration of information stored in memory
Model of Intuition:Automated Experiences
choice based on a familiar situation and a partially subconscious application of previously learned information related to that situation
- graphical representation of the process underlying decisions and how it shows the resulting consequences of making various choices
- -helps navigate through trade-offs.
Extent to which group members feel comfortable disagreeing with other group members, and a group's level of participation in decision making.
Reached when all members can say they either agree with the decision or have had their "day in court" and were unable to convince the others of their viewpoint. Everyone agrees to support the outcome
process to generate a quantity of ideas
Nominal Group Technique
Process to generate ideas and evaluate solutions
Process to autonomously generate ideas from physically dispersed experts
Computer-Aided Decision Making
- -Variety of computer, software, and electronic devices to improve decision making
- -Allows managers to quickly obtain larger amounts of information from employees, customers, or suppliers around the world
- -Chauffeur-driven systems, group-driven electronic meetings
Process of using intelligence, imagination, and skill to develop a new or novel product, object, process, or thought.
Creativity Stages (5)
- 1)Preparation:notion creativity starts from base of knowledge
- 2)Concentration: focus on problem at hand
- 3)Incubation:unconsciously ppl make remote associations during daily activities
- 4)Illumination: Prior Associations come to life
- 5)Verification: go through entire process to verify, modify, or try out new idea.