chapter 11 - Learning Objectives Define decision making and...

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Unformatted text preview: Learning Objectives Define decision making and differentiate well-structured and ill-structured problems. Compare and contrast perfectly rational decision making with decision making under bounded rationality. Discuss the impact of framing and cognitive biases on the decision process. Learning Objectives 4. Explain the process of escalation of commitment to an apparently failing course of action. 5. Consider how emotions and mood affect decision making. Summarize the pros and cons of using groups to make decisions, with attention to the groupthink phenomenon and risk assessment. Discuss techniques for improving organizational decision making. What Is Decision Making? Decision making is the process of developing a commitment to some course of action. Three things are noteworthy about decision making: It involves making a choice among several action alternatives. It is a process. It involves a commitment of resources . Decision making can also be described as a process of problem solving. A problem exists when a gap is perceived between some existing state and some desired state. Well-Structured Problems A problem for which the existing state is clear, the desired state is clear, and how to get from one state to another is fairly obvious. These problems are simple, and their solutions arouse little controversy. They are repetitive and familiar and they can be programmed. A program is a standardized way of solving a problem. Programs short-circuit the decision-making process by enabling the decision maker to go directly from problem identification to solution. They are also known as rules , routines , standard operating procedures , or rules of thumb . They provide a useful means of solving well structured problems. Programs are only as good as the decision-making process that led to the adoption of the program in the first place. Ill-Structured Problem A problem for which the existing and desired states are unclear and the method of getting to the desired state is unknown. Unique and unusual problems that have not been encountered before. They tend to be complex and involve a high degree of uncertainty. They frequently arouse controversy and conflict. They cannot be solved with programmed decisions. Decision makers must resort to non-programmed decision making. They can entail high risk and stimulate strong political considerations. The Compleat Decision Maker A Rational Decision-Making Model A rational decision maker might use a model that involves a sequence of steps that are followed when making a decision. The Rational Decision Making Process Perfect Rationality Perfect rationality is a decision strategy that is completely informed, perfectly logical, and oriented toward economic gain....
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chapter 11 - Learning Objectives Define decision making and...

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