Lecture 4 - BA 310: Decision Making 1 Roadmap:...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
1 BA 310: Decision Making
Background image of page 1

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

View Full DocumentRight Arrow Icon
2 Roadmap: Decision-Making What are different decision-making processes? How is decision-making different for different kinds of problems? What is “bounded rationality?” “Satisficing?” How do ambiguity, uncertainty and risk affect decisions? How are decisions affected by biases and cognitive shortcuts? What are strengths & weaknesses of group decision-making? “The essence of the manager’s job”
Background image of page 2
3 The “Decision-Making Process” 1. Problem Identification “I need to decide The best franchise to purchase 2. Identification of Decision Criteria Financial Qualification Franchisor History Start-Up Costs Open Locations Franchisor Support 3. Allocation of Weights to Criteria Start Up Costs 10 Franchisor Support 8 Financial Qual’s 6 Open Locations 4 Franchisor History 3 4. Development of Alternatives Curves Quiznos Radio Shack McDonalds GNC 7. Implementation of an Alternative 8. Evaluation of Decision Effectiveness 5. Analysis of Alternatives GNC Radio Shack McDonalds Quiznos Curves 6. Selection of an Alternative Start Up Costs 10 x 10 = 100 Franchisor Support 3 x 8 = 24 Financial Qual’s 10 x 6 = 60 Open Locations 8 x 4 = 32 Franchisor History 5 x 3 = 15 Sum to 231 Curves Curves Quiznos Radio Shack McDonalds GNC
Background image of page 3

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

View Full DocumentRight Arrow Icon
4 Types of Problems and Decisions Structured Problems - straightforward, familiar, and easily defined. Unstructured Problems - new, unusual problems for which information is ambiguous or incomplete. Programmed Decisions – a “routine” (procedure, rule or policy) used to address repetitive, (structured) problems Minimize need for discretion; facilitate efficiency Nonprogrammed Decisions – a unique decision to address (poorly-structured) problems needing customized solutions Understand tradeoff between efficiency and optimality
Background image of page 4
5 Rational Decision Making Definition: Decisions that are consistent & value-maximizing given the constraints of the situation. Why wouldn’t we achieve rationality? The franchise-selection “decision-making process” slide discussed shows an attempt to achieve rationality It illustrates well how assumptions of the rational decision-making model are highly demanding Managerial decisions seldom meet all the assumptions
Background image of page 5

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

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/12/2010 for the course BADM 310 taught by Professor Staff during the Spring '08 term at University of Illinois, Urbana Champaign.

Page1 / 21

Lecture 4 - BA 310: Decision Making 1 Roadmap:...

This preview shows document pages 1 - 6. Sign up to view the full document.

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