Chapter 7 Flashcards
(18 cards)
Rational Decision Making
Managers make logical and optimal decisions
Nonrational Decision Making
Managers find it difficult to make optimal decisions
Stages of Rational Decision Making
- Identify problem 2. Alternate solution 3. Evaluate and select solutions 4. Implement and evaluate
4 General Decision Making styles
Directive, Analytical, conceptual, Behavioral
Directive Style
Action oriented decision makers who focus on facts
Analytical style
Careful who like lots of information and alternative choices
Conceptual Style
Rely on intuition and having a long term perspective
Behavioral style
Most people oriented
Decision Making Biases
Availability, Confirmation, Hindsight, Framing, Escalation of Commitment, Sunk-Cost
Availability Bias
Using only information available
Confirmation Bias
Seeking information to support your POV
Hindsight Bias
I knew it all along effect therefore skew power decision
Framing Bias
Shaping the way a problem is presented
Escalation of Commitment
Feeling overly invested in decision
Sunk-Cost Bias
Money already spent seems to justify continuing
Advantage of Group Decision
Greater pool of knowledge, different perspective, intellectual simulation, deeper commitment to the decision
Disadvantages of Group Decision
Few people to dominate/intimidate, group think, satisficing
Groupthink
Conseiveness isn’t always good as you can’t think outside the box and fail to consider new information and a loss of new ideas
