Exam 3 Notes

Exam 3 Notes - Exam 3 Notes: DECISION MAKING: - Identifying...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Exam 3 Notes: DECISION MAKING: - Identifying and choosing alternative solutions that lead to a desired state of affairs - Helps us deal w/ a problem or opportunity 1) Programmed Decisions: - Simple and routine - Considerable guidance from past decision - Lower-Level workers (usually alone) - Ex: Inventory (routine) - -Even if you personally haven’t faced it- There’s guidance (firing) 2) Nonprogrammed Decisions: - Complex and creative (unique) - No guidance from past decisions - Upper-Level Supervisions (usually in groups) - Haven’t faced these issues yet How Uncertain Is The Outcome? 1) Certain Decisions: We have enough info to evaluate all outcomes and choose which is best (Outcome is certain) -Ex: Picking a gym can find out info, hours, equip 2) Risky Decisions: Outcomes aren’t certain (Don’t have all info) -Probabilities associated w/ each solution Ex: Deciding whether or not to have picnic- Probability of rain or not (50%) -Most common 3) Uncertain Decisions: -So little info on possible outcomes -Rely on intuition and creativity (lots) -Intuition: Gut feeling, best feeling Ex: Designing a new product Who Makes the Decision? -Top- Down decision making -Empowered Decision Making NORMATIVE DECISION THEORY: -AUTOCRATIC I (AI): Manager solves problem or makes decision alone using available information
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
-AUTOCRATIC II (AII): Manager obtains needed information from subordinates but then makes the decision alone -CONSULTATIVE I (CI): Manager Share’s problem with subordinates individually, asks for information and feedback, but then makes decision alone -CONSULTATIVE II (CII): Manager shares problem with subordinates in a group meeting but then makes decision alone -GROUP II (GII): Manager Share’s problem with subordinates in a group meeting and decision is reached through consensus RATIONAL MODEL OF DECISION MAKING: 1) Recognize the problem: Insufficient funds to meet payroll obligations 2) Identify the objective (s): Increase cash flow 3) Gather and evaluate data: Review budget and spending 4) Generate solutions: Raise prices, lay off workers, liquidate equipment 5) Evaluate Solutions: Higher prices may lower sales, laying off workers will slow production 6) Select a Solution: Decide to raise prices slightly and sell excess inventory 7) Implement Solution: Raise prices slightly and sell excess inventory 8) Evaluate choice and follow up: Do I have sufficient funds now? Simon’s Bounded Rationality Model: - Decision makers are guided by bounded rationality - These constraints results in tendency to acquire manageable rather than optimal amounts of information - Failure to identify and evaluate all potential alternatives lead to satisficing GARBAGE CAN MODEL: -A theory that contends that decisions in organizations are random and unsystematic -Assumes that decision making is a sloppy and haphazard process -Choice opportunities -Problems -Solutions -Participants
Background image of page 2
Heuristics: Shortcuts in decision making that save mental activity. JUDGEMENTAL HEURISTICS:
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 12

Exam 3 Notes - Exam 3 Notes: DECISION MAKING: - Identifying...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online