Survey of Management

Card Set Information

Survey of Management
2012-09-25 03:41:07
Management Decision Making

Management Test 1
Show Answers:

  1. Decision-Making
    Process of choosing a specific course of action to respond to both opportunities & problems
  2. Decision-Making

    Recurring opportunities & problems; handled with a routine, repetitive approach, Standard Operating Procedure (SOP). Performance program used
  3. Decision-Making

    Response to new, unique problems or opportunities where information is ambiguous or incomplete. Involve custom made solutions
  4. Rational Decision-Making Model
    • Define problem & establish goals
    • Identify criteria
    • Allocate weights to criteria
    • Develop alternatives
    • Evaluate alternatives
    • Select best alternatives
  5. March & Simon's Administrative Model of Decision-Making

    We don't make "best" decisions but look & choose "acceptable" responses
  6. March & Simon's Administrative Model of Decision-Making

    Bounded Reality
    Limitations of the mind cause us to construct simplified models where we extract essential features & fail to consider all the complexity of the problem/opportunity
  7. March & Simon's Administrative Model of Decision-Making
    Psychological factors, biases, & filters result in making satisfactory, not optimal decisions
  8. Heuristics & Biases

    Rule of thumb that simplify making decisions & may lead to errors & biasis in processing & evaluating information
  9. Heuristics & Biasis

    Overconfidence Bias
    Overly confident that we are correct
  10. Heuristics & Biases

    Immediate gratification bias
    Make choices that provide quick rewards
  11. Heuristics & Biases

    Anchoring & Adjustment Bias
    Make choices based on adjustments from some initial amount
  12. Heuristics & Biases

    Confirmation Bias
    Focus on information that reaffirms past choices & discounts information that contradicts past judgments
  13. Heuristics & Biases

    Availability Bias
    Decide based on information readily available or easy to remember (vivid, extreme, recent)
  14. Heuristics & Biases

    Risk Aversion
    Tendency to prefer a sure thing over a risky outcome
  15. Heuristics & Biases

    Representative Bias
    Predict the likelihood of an event based on how it resembles other events
  16. Heuristics & Biases

    Randommness Bias
    Believe we can predict the outcome of random events
  17. Heuristics & Biases

    Hindsight Bias
    Tendency to believe falsely, after the outcome is known, that we could have accurately predicted
  18. Heuristics & Biases

    Escalation of Commitment
    • Stick with a decision & invest additional resources even if there is clear evidence to indicate we are wrong
    • - Don't want to admit we are wrong
    • - Try to recoup lost resources
    • - Take more risks when we try to recoup resources than when we try to generate resources
  19. Advantages of Gropu Decision-Making
    • Greater availability & diversity of skills, knowledge & expertise
    • Better memory for information
    • Better able to detect errors
    • Greater decision acceptance
  20. Disadvantages of Group Decision-Making
    • Takes more time
    • Potential for "group think". Cohesive groups strive for agreement at expense of accurately assessing information
    • Potential for conflict. Need balance of conformity & conflict
  21. Disadvantages of Group Decision-Making

    Groups tend to make more extreme decision (either more risky or conservative)
  22. Disadvantages of Group Decision-Making

    Diffusion of Responsibility
    Potential for "social loafiing". (individuals exert less effort when in a group)
  23. Preventing Group Think
    • - Leader urges members to be critical, raise doubts, & readily accept criticism of their own ideas
    • - Leader does not share own views until group has considered alternatives
    • - Leader encourages members to solicit ideas from people outside the group
    • - Assign some member(s) to play deil's advocate
    • - Hold second meeting after decision is made & encourage sharing any doubts