Exam 2 Book Notes (koofers)

Exam 2 Book Notes (koofers) - MGTExam2:Chapter7,8,9,10,11,12

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MGT Exam 2: Chapter 7, 8, 9, 10, 11, 12 Chapter 7: Individual and Group Decision Making 7.1 The Nature of Decision Making ! Decision ‐ a choice made from among available alternatives ! Decision making ‐ the process of identifying and choosing alternative courses of action ! Risk propensity ‐ the willingness to gamble or to undertake risk for the possibility of gaining an increased payoff ! Decision making style ‐ reflects the combination of how an individual perceives and responds to information ! Value orientations ‐ the extent to which a person focuses on either task and technical concerns or people and social concerns when making a decision ! Directive ‐ low tolerance for ambiguity and are oriented toward task and technical concerns about making decisions. Efficient, logical, practical and systematic ! Analytical ‐ higher tolerance for ambiguity and is characterized by the tendency to overanalyze a situation. More information and alternatives. Careful decision makers who take a long time to make decisions but respond well to new or uncertain situations ! Conceptual ‐ high tolerance for ambiguity and tend to focus on the people/social. Broad perspective to problem solving and like to consider many options and future possibilities. Long‐ term perspective and rely on intuition ! Behavioral ‐ most people oriented. Work well with others and enjoy social interactions. Supportive, receptive to suggestions, show warmth and prefer verbal to written information 7.2 Two kinds of decision making: rational and non‐rational Rational Model (classical) ! Rational model of decision making ‐ (classical model), explains how managers should make decisions; it assumes managers will make logical decisions that will be the optimum in furthering the organization’s best interests
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! Step 1: Identify the problem or opportunities o Problems ‐ difficulties that inhibit the achievement of goals o Opportunities ‐ situations that present possibilities for exceeding existing goals o Diagnosis ‐ analyzing the underlying cause ! Step 2: Think up alternative solutions‐ both obvious and creative ! Stage 3: evaluate alternatives and select solution: ethics, feasibility and effectiveness ! Stage 4: implement and evaluate the solution chosen o Successful implementation ! Plan carefully ! Be sensitive to those affected o Evaluation ! If it’s not working ! Give it more time ! Change it slightly ! Try another alternative ! Start over ! Whets wrong with the rational model? o Prescriptive, it describes how mangers should make decisions; it doesn’t say how they actually make decisions o Assumptions ! Complete information, no uncertainty ! Logical, unemotional analysis ! Best decision for the organization Non‐Rational Model ! Non‐rational models of decision making ‐ explain how managers make decisions; they assume that decision making is nearly always uncertain and risky, making it difficult for managers to make optimal choices 1. Bounded rationality and the satisficing model‐ Satisfactory is good enough
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Exam 2 Book Notes (koofers) - MGTExam2:Chapter7,8,9,10,11,12

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