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MAN 320F Definitions Exam 3

MAN 320F Definitions Exam 3 - MAN 320F Definitions Exam 3...

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MAN 320F Definitions: Exam 3 Chapter 7 Managers as Decision Makers Decision A choice from two or more alternatives Problem An obstacle that makes achieving a desired goal or purpose difficult Decision Criteria Criteria that define what’s important or relevant in resolving a problem Rational Decision Making A type of decision making where choices are logical and consistent and maximize value Bounded rationality Decision making that’s rational but limited by an individual’s ability to process information Satisfice To accept solutions that are “good enough” Intuitive decision making Decision making based on experience, feelings, and accumulated judgment Structured problem A straightforward, familiar, and easily defined problem Programmed decision Policy Procedure Rule A repetitive decision that can be handled using a routine approach A guideline for making decisions Series of sequential steps used to respond to a structured problem Explicit statement that tells managers what can or cannot be done Unstructured problem Problem that is new or unusual and where information is ambiguous or incomplete Nonprogrammed decision Unique, nonrecurring decision that requires a custom-made solution Certainty Situation where a decision maker can make accurate decisions because all outcomes are known Uncertainty Situation where a decision maker has neither certainly nor reasonable probability estimates available Risk Situation where the decision maker is able to estimate the likelihood of certain outcomes Linear thinking style Preference for using external data and facts, processing information through rational, logical thinking Nonlinear thinking style Preference for internal sources of information, processing information with internal insights, feelings, and hunches Decision making styles Directive Analytical Conceptual Behavioral Low tolerance for ambiguity and rational/linear thinking style High tolerance for ambiguity and rational/linear thinking style High tolerance for ambiguity and intuitive/nonlinear thinking style Low tolerance for ambiguity and intuitive/nonlinear thinking style Heuristics Decision-making biases Rules of thumb that managers use to simplify decision making Overconfidence bias. Occurs when decision makers tend to think that they know more than they do or hold unrealistically positive views of themselves and their performance. Immediate gratification. Describes decision makers who tend to want immediate rewards and avoid immediate costs. Anchoring effect. Describes when decision makers fixate on initial information as a starting point and then, once set, fail to adequately adjust for subsequent information. Selective perception. Occurs when decision makers selectively organize and interpret events based on their biased perceptions.
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