Ithasbeenwell documented that individuals escalate

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Unformatted text preview: rnative Development Since decision­makers seek a satisficing solution, there is a minimal use of creativity in the search for alternatives. Efforts tend to be confined to the neighborhood of the current alternative. Evidence indicates that decision­making is incremental rather than comprehensive. Decision­makers make successive limited comparisons. The picture that emerges is one of a decision­maker who takes small steps toward his or her objective. C. Making Choices In order to avoid information overload, decisionakers rely on heuristics or judgmental shortcuts in decision making. There are two common categories of heuristics—availability and representativeness. Each creates biases in judgment. The availability heuristic – It is “the tendency for people to base their judgments on information that is readily available to them.” Events that evoke emotions, that are particularly vivid, or that have occurred more recently tend to be more available in our memory. Fore example, many more people suffer from fear of flying than fear of driving in a car. Representative heuristic ­ To assess the likelihood of an occurrence by trying to match it with a preexisting category, managers frequently predict the performance of a new product by relating it to a previous product’s success. D. Escalation of commitment It is an increased commitment to a previous decision in spite of negative information. It has been well documented that individuals escalate commitment to a failing course of action when they view themselves as responsible for the failure. E. Individual Diff erences: Decision­Making Styles People differ along two dimensions. The first is their way of thinking. Some people are logical and rational. They process information serially. Some people are intuitive and creative. They perceive things as a whole. The other dimension is a person’s tolerance for ambiguity. Some people have a Sikkim Manipal University 108 Perception Unit 8 high need to minimize ambiguity. Others are able to process many thoughts at the same time. These four decision making styles can be represented in the following way: Directive: · Low tolerancefor ambiguity and seek rationality · Eff icient and logical · Decisions are made with minimal information and with few alternatives assessed. · Make decisions fast and focus on the short­run. Analytic: · Greater tolerance for ambiguity · Desire for more information and consideration of more alternatives · Best characterized as careful decision makers with the ability to adapt to or cope with new situations Conceptual: · Tend to be very broad in their outlook and consider many alternatives · Their focus is long range, and they are very good at finding creative solutions to problems. Behavioral: · Characterizes decision makers who work well with others · Concerned with the achievement of peers and subordinates and are receptive to suggestions from others, relying heavily on meetings for communicating · Tries t...
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This note was uploaded on 03/01/2014 for the course MBA mba taught by Professor Smu during the Fall '10 term at Manipal University.

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