Chapter 4

Question 1

Decision Process

Answer 1

• Herbert Simon
  1. Intelligence (searching environment)
  2. Design (inventing, developing, and analyzing)
  3. Choice (actual selection of a course of action)

Question 2

Decision Making

Answer 2

The process of choosing from various alternatives.

Question 3

Problem Solving

Answer 3

Process of determining the appropriate responses or actions necessary to alleviate a problem.

Question 4

Programmed Decision

Answer 4

Decisions that are reached by following an established or systematic procedure.

• Routine, repetitive decisions
• Guidelines must be followed in arriving at the decision.

Question 5

Nonprogrammed Decisions

Answer 5

• Have little or no precedent
• Unstructured
• Generally require a more creative approach.

Question 6

Intuitive Approach

Answer 6

Approach used when managers make decisions based largely on hunches and intuition.
- Emotionally attached.

Question 7

Optimizing Approach

Answer 7

1. Recognize the need for a decision.
2. Establish, rank, and weigh the decision criteria.
3. Gather available info. and data.
4. Identify possible alternatives.
5. Evaluate each alternative with respect to all criteria.
6. Select the best alternative.

Question 8

Satisficing Approach

Answer 8

Selecting the first alternative that meets the decision maker’s minimum standard of satisfaction.

Question 9

Administrative Man - Simon

Answer 9

1. A person’s knowledge of alternatives and criteria is limited.
2. People act on the basis of a simplified abstraction of the real world.
3. People don’t attempt to optimize.
4. An individual’s level of aspiration concerning a decision fluctuates.

Question 10

Principle of bounded rationality

Answer 10

Assumes people have the time and cognitive ability to process only a limited amount of information on which to base decisions.

Question 11

Level of aspiration

Answer 11

Level of performance that a person expects to attain; determined by the person’s prior successes and failures.

Question 12

Environmental Factors to Decisions

Answer 12

1. Organizational groups
2. Personal Traits
3. Organization itself
4. Individuals within organizations

Question 13

Situation of Certainty

Answer 13

Occurs when a decision maker knows exactly what will happen and can often calculate the precise outcome for each alternative.

Question 14

Situation of Risk

Answer 14

Situation that occurs when a decision maker is aware of the relative probabilities of occurrence associated with each alternative.

Question 15

Situation of Uncertainty

Answer 15

Occurs when a decision maker has very little or no reliable info. on which to evaluate the different outcomes.

Question 16

Maximax Approach

Answer 16

Selecting the alternative whose best possible outcome is the best of all possible outcomes.
- Positive Approach

Question 17

Maximin Approach

Answer 17

Comparing the worst possible outcomes for each alternative and selecting the one that is least undersirable.

Question 18

Risk-averting Approach

Answer 18

Choosing the alternative with the least variation among its possible outcomes.

Question 19

Value

Answer 19

A conception that defines what an individual or group regards as desirable.

Question 20

Ethics

Answer 20

A set of moral principles or values that govern behavior.

Question 21

Group Decision Making

Answer 21

1. The sum total of the groups knowledge is greater.
2. The group has a much wider range of alternatives.
3. Risk-takers

Question 22

Barriers to decision making

Answer 22

1. Complacency
2. Defensive Avoidance
3. Panic
4. Deciding to decide

Question 23

Creativity

Answer 23

coming up with an idea that is new, original, useful, or satisfying to its creator or to someone else.

Question 24

5 Step Process to creative decision making

Answer 24

1. Preparation
2. Concentration
3. Incubation of ideas and information

Question 25

Brainstorming

Answer 25

Presenting a problem to a group and allowing group members to produce a large quantity of ideas for its solution. No criticisms.

Question 26

Nominal Group Technique (NGT)

Answer 26

Highly structured technique for solving group tasks; minimizes personal interactions to encourage activity and reduce 1. Listing 2. Recording 3. Voting 4. Discussion 5. Final Voting * No verbal communication allowed.

Question 27

Brainwriting

Answer 27

Members anonymously write down ideas, then exchange papers with others, who build on the ideas and pass them on until all members have participated.

Question 28

Synetics

Answer 28

Creative problem solving technique that uses metaphorical thinking to "make the familiar strange and the strange familiar".

Question 29

Mind Mapping

Answer 29

Aids people in extracting ideas from their brains and creating relationships between all the bits and pieces. - Start with core and branch out.

Question 30

Model for Creative Decision Making

Answer 30

1. Recognition (describe in writing) 2. Fact Finding (past) 3. Problem Finding (future) 4. Idea Finding (alternatives) 5. Solution Finding 6. Acceptance Finding

Question 31

Management Information Systems

Answer 31

An information system used by managers to support the day-to-day operational and tactical decision-making needs of managers.

Question 32

Data processing

Answer 32

Capture, processing, and storage of data.

Question 33

Transaction-processing system

Answer 33

Substituting computer processing for manual record keeping procedures.