Chapter 1: Introduction Flashcards
(18 cards)
What makes management decisions complex?
Risk and uncertainty
What is a factor that contributes to the complexity of management decisions involving multiple goals?
Multiple objectives
What makes management decisions difficult due to the organization’s design and hierarchy?
A complex structure
What aspect of management decisions involves the consideration of various groups or individuals with different interests?
Multiple stakeholders
Why do people struggle to cope with complexity in decision-making?
The human mind has limited information processing capacity and memory
How do people cope with complexity in decision-making?
By simplifying problems
What negative outcomes can result from simplifying complex problems?
Inconsistency and biases
What approach does decision analysis use to handle complexity?
‘Divide and Conquer’
What does decision analysis provide to ensure decisions are justified?
A defensible rationale or ‘audit trail’
How does decision analysis contribute to awareness?
By raising consciousness about issues
What does decision analysis allow for that enhances commitment?
Participation
What does decision analysis encourage for better decision-making?
Creative thinking and insights
How does decision analysis assist in managing information?
By providing guidance on information needs
What is the main purpose of decision analysis?
To yield insights and understanding about the decision problem, rather than to impose an ‘optimal’ solution
What is the basic assumption in decision-making?
Rationality
What must a decision maker be prepared to accept for the decision analysis to be preferred?
A set of axioms
What is one possible reason for conflicts between analysis and intuition?
The analysis failed to capture some aspect of the problem
What is another possible reason for conflicts between analysis and intuition?
Intuitive preferences were only partly formed or were inconsistent
