Chapter 7 - Decision Making & Creativity Flashcards
Rational Choice Paradigm (definition and 6 steps)
Use of logic in decision making process.
- Identify problem/opportunity
- Choose decision strategy
- Develop alternatives
- Choose “best” solution
- Implement solution
- Evaluate
Subjective Expected Utility
Probability (expectancy) of event X importance of criteria (utility)
Programmed vs Non-programmed decision
Decision follows a standard operating procedure
Vs
Decision which does not have a defined procedure (generally new, complex or poorly defined problems)
Stakeholder framing
Stakeholders highlight or hide information to influence how the decision maker interprets the situation/problem (constructed realities)
Solution-focused problems
Describing a problem with use of a solution
Eg: the problem is that we need more communication from management
Vs
The problem is a lack of understanding
Decisive leadership
Jumping to conclusions without appropriate assessment of the problem and its solutions
Perceptual defence
Coping mechanism which screens out bad news/info that threatens ones self-concept
Mental models
Models of the external world based on past experience that promulgate “filling in the blanks” and shape how we visualise a problem
Problem vs Opportunity
A gap between current and desired future state
Vs
A gap between current and a future state not previously considered
Bounded rationality
Recognising the limitations in a persons ability to make rational decisions - limited info, limited processing ability, satisfying vs maximising
Implicit favourite
A preferred alternative that all others are assessed against, an initial anchor
3 types of decision heuristics
- Anchoring and adjustment heuristic
- Availability heuristic
- Representative heuristic
Availability heuristic
Over/under weighing probabilities based on availability of information. Influenced by emotional reactions and recent events
Representative heuristic
Extrapolating irrelevant trends and information such as stereotypes and clustering.
3 areas that emotion can impact during decision making process
- Forming initial preferences through initial emotional makers
- Decision making is influenced by mood. Negative mood = detail orientated vs positive mood = better use of programmed decision routes.
- Evaluating alternatives are influenced by emotional reactions and emotional events (intuition)
Intuition
A subconscious assessment of the situation. An emotional event that implies a problem/opportunity not yet recognised by the conscious mind.
Formed through observation, past experience and mental models.
Action script
An intuitive programmed decision to an event
Escalation of commitment and 4 input theories
Repeat or continued investment in a bad decision.
- Self justification
- Self enhancement
- Prospect theory
- Sunk cost effect
Self justification
Desire for a positive public image. Over emphasis of good / positive / competent
Self enhancement
Over confidence in ability and luck to being more successful than average. Core component of self-concept.
Prospect theory
Negative emotions associated with a loss
>
Positive emotions associated with a gain
Sunk cost effect
Over emphasis of resources already invested or resources yet to be invested as part of an exit from a bad decision
4 strategies to strengthen decision making
- Separate decision choosers and makers
- Predetermined abandonment triggers
- Predetermined evaluation points/criteria
- Using multiple people in decision process
Divergent thinking
Reframing a problem and using different approaches
