Management Final

Management Final - Management5Final 19:22 Chapter 6:...

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Management 5 Final 19:22 Chapter 6: Individual and Group Decision Making Decision Making – Process of specifying the nature of particular problem or opportunity and selecting among the available alternatives to solve the problem or capitalize on the opportunity. o The act and the process Act: choosing between alternatives Process: steps that can be divided into distinct categories. o Formulation – process involving identifying a problem or opportunity, acquiring information, developing desired performance expectations, and diagnosing the causes and relationships among factors affecting the problem or opportunity. o Solution – a process involving generating alternatives, selecting the preferred solution and implementing the decided course of action Individual decision making o Rational model (Classical Model) – seven step model of decision making that represents the earliest attempt to model decision processes 1. Identifying decision situations problem: a gap between existing and desired performance opportunity: a chance to achieve a more desirable state than the current one 2. Developing objectives and criteria – determine outcome, goal, etc. specific criteria & relative weightings 3. Generate Alternatives – time to achieve results past solutions can be effective creative new solutions – effective because no two situations are exactly identical, and subtle differences may make a past solution less effective today 4. Analyzing Alternatives minimally acceptable results feasibility
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best results 5. Select Alternative Subjectively expected utility (SEU) model: model of decision making that assets that managers choose the alternative that they subjectively believe maximizes the desired outcome 6. Implement decision sources and reasons for resistance chronology and sequence of actions required resources delegation of tasks 7. Monitor and evaluate results the bounded rationality model (administrative model) – assumes that people usually settle for acceptable rather than maximum options because the decisions they confront typically demand greater information – processing capabilities than they possess. o Heuristic: a rule that guides the search for alternative into areas that have a high probability for yielding success o Satisficing: the tendency for decision makers to accept the first alternative that meets their minimally acceptable requirements rather than pushing them further for an alternative that produces the best results Retrospective decision model (implicit favorite model) : a decision making model that focuses on how decision makers attempt to rationalize their choices after they are made o Perceptual distortion: highlighting the positive features of the implicit favorite over the alternative Example: shopping for clothes Soelberg’s theory Intuitive decision making: the primarily subconscious process of identifying a decision and selecting a preferred alternative
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Management Final - Management5Final 19:22 Chapter 6:...

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