Problem Session 4 - Framing and Structuring Decisions

Assess decision team decision situation 3 develop

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Unformatted text preview: ituation 3. DEVELOP Alternatives, Information, and Values 4.EVALUATE Risk and Return of Alternatives 6. PLAN & BUDGET for Course of Action 7. IMPLEMENT Course of Action SCHEDULE (weeks) Adapted from: Matheson, Smart Organization, 1998 Copyright 2009 by Burke Robinson, LLC 11 A variety of decision analysis techniques are available to develop clear, concise strategies. Issues and Challenges Vision Statement Force Field Diagram Strategic Agenda Brainstorming Alt A Revenue Costs Investment Taxes NPV Alt B Alt C Alt D Decisions Uncertainties Values (Criteria) Expert Input Preference Model Policy Strategy Tactics Decision Hierarchy Lever Optimization (Decision Sensitivity) Decision Diagram Tornado Diagram (Risk Sensitivity) Strategy Table * * * Copyright 2009 by Burke Robinson, LLC * * 12 Hybrid Strategy Table 6 Frames can be too broad...or too narrow. Too broad... includes too much Too narrow... includes too little Copyright 2009 by Burke Robinson, LLC 13 Frames that are "just right" include essential "just information and distinct choices for action. Frames define purpose, scope and perspective: what we're doing and why, what's in and what's out, what's taken as given and what's open to question, as well as how we'll know that we've been successful. Copyright 2009 by Burke Robinson, LLC 14 7 What will you bid in an auction for a $20 bill? I am going to auction a $20 bill to the highest bidder. The highest bidder will pay his or her bid and get the $20. The second-highest bidder secondwill also pay his or her bid, BUT WILL NOT GET THE $20. Copyright 2009 by Burke Robinson, LLC 15 As we have seen, decision frames can shift several times during the $20 bill auction. Incremental slowly increase bid until all others drop out Intimidation jump shift to scare other bidders away early Revenge making someone else pay too much Ego always getting the better deal, no matter what the losses Of course this never happens in the real world... except for consumer goods price wars, offshore oil lea...
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This note was uploaded on 06/16/2010 for the course MS&E 352 taught by Professor Ronhoward during the Winter '09 term at Stanford.

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