Maximum payoff the rational decision maker will

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Unformatted text preview: ent as they are compared with the criteria and weights established in the second and third steps. Step 6: The final step is to compute the optimal decision: Sikkim Manipal University 104 Perception · Unit 8 Evaluating each alternative against the weighted criteria and selecting the alternative with the highest total score. The above­mentioned model works with following assumptions (March, 1994): · Problem clarity. The decision maker is assumed to have complete information regarding the decision situation. · Known options. It is assumed the decision maker is aware of all the possible consequences of each alternative. · Clear preferences. Criteria and alternatives can be ranked and weighted to reflect their importance. · Constant preferences. Specific decision criteria are constant and the weights assigned to them are stable over time. · No time or cost constraints. The rational decision maker can obtain full information about criteria and alternatives because it is assumed that there are no time or cost constraints. · Maximum payoff. The rational decision maker will choose the alternative that yields the highest perceived value. Creativity in Decision Making Creativity is the ability to produce novel and useful ideas. These are ideas that are not only different from what has been done before, but, that are also appropriate to the problem or opportunity presented. People differ in their inherent creativity. A study of lifetime creativity of 461 men and women found that fewer than one percent were exceptionally creative. Ten percent were highly creative, and about sixty percent were somewhat creative. Model of creativity This model proposes that individual creativity essentially requires expertise, creative­thinking skills, and intrinsic task motivation. · Expertise is the foundation for all creative work. The potential for creativity is enhanced when individuals have abilities, knowledge, proficiencies, and similar expertise in their field of endeavor. Sikkim Manipal University 105 Perception · Unit 8 Creative thinking skills. This encompasses personality characteristics associated with creativity, the ability to use analogies, as well as the talent to see the familiar in a different light. · Intrinsic task motivation. The desire to work on something because it is interesting, involving, exciting, satisfying, or personally challenging. This turns creativity potential into actual creative ideas. It determines the extent to which individuals fully engage their expertise and creative skills Most decisions in the real world do not follow the rational model. Decision­makers generally make limited use of their creativity. Choices tend to be confined to the neighborhood of the problem symptom and to the neighborhood of the current alternative. Two of the most important ways of decision­making in organizations are : · Bounded Rationality · Intuitive decision making Bounded rationality W hen faced with a complex problem...
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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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