Decision Making and the essential of control

Question 1

Decision making

Answer 1

making choices among alternative courses of action

Question 2

why is decision making important

Answer 2

it increases your effectiveness at work.

Question 3

Questions to ask to find out if decisions are ethical

Answer 3

1. is this decision fair
2. will i feel better or worse afterwards
3. does it break org. rules?
4. does it break laws?
5. how would i feel if its on the news

Question 4

Decision Types

Answer 4

Programmed decisions (habitual) –> have autoamted response (decision rule)

non programmed decisions (iunique)

Question 5

Decision making categories

Answer 5

Strategic decisions (set the course of the org)

tactical decision (how thigns are done)

operational decisions (everyday decisions in business)

Question 6

Decision making models

Answer 6

Rational decision making model

bounded rationality decision making model

intuitive decision making model

creative decision making model

Question 7

Rational decision making model

Answer 7

series of steps that decision makers take to maximize the quality of their outcome.

1. identify the problem
2. establish decision criteria
3. weigh criteria
4. generate alternatives for options
5. evaluate alternatives against criteria
6. choose best alternative
7. implement decision
8. evaluate the decision

Question 8

Analysis paralysis

Answer 8

availability of too much information, more and more time is then spent on gathering information and thinking about it and no decision is made.

Question 9

Bounded Rationality model

Answer 9

recognizes the limitations. According to this models you limit your options to amanageable set and choose best alternative without conductivng a heavy serarch for alternatives.

Important approach is the tenency to satisfice – accept the first solution that meets your criteria.

Question 10

intuitive decision making

Answer 10

Arraive at decisions without conscious reasoning.

This works well if you have training, experience and knowledge, and have a idea of how well a solution may work.

Question 11

Creative decision making

Answer 11

New imaginative ideas.

5 Steps.:

1. problem identification
2. immersion (think about problem consciously and gather info)
3. incubation (set problem aside. work on problem unconsciously)
4. illuminiation (insight moment)
5. verification and application (verify feasibility and implement it)

Question 12

Dimensions of creativity

Answer 12

Fluency
Flexibility
Originality

Question 13

Faulty decision making

Answer 13

potential cahllenges lie in several biases and traps

Question 14

Overconfidence bias

Answer 14

onverestimate the ability to predict future events.

Question 15

hindsight bias

Answer 15

mistakes seem obvious when looking back in time. a problem when judging someone elses ideas.

Question 16

anchoring

Answer 16

tendency for individuals to rely too heavily on single pieces of information

Question 17

framing bias

Answer 17

tendency of decision makers to be influenced by the way that a situation or problem is presented. (be aware to not make a disadvantageous dicision because of how its framed)

Question 18

escalation of commitment

Answer 18

“you have already invested in a sinking ship” so now you have to stay on it or invest even more.

Question 19

group decision making

Answer 19

has some advantages also some disadvantages

is slower than individual decision making since all members need to express their thoughts and ideas, it can lead to groupthink (not critizie teams favorable ideas) and social loathing (do less work in a team). Also the group is rarely better than its best member.

positive aspects are a wieder range of experience, diverse background which lead to more and maybe better ideas than otherwise. Also discussion etcn leads to more insights and more errors could be found. but its also more fun and in the end everybody is commited because the group invested in it. for groupthink, groups should have a devils advocate (rotating) every meeting!!

Question 20

Decision making methods

Answer 20

Nominal Group Technique (anon write down ideas, gather ideas until all shared, discussion where each member tells his thoughts to the anon ideas, finall ya voting for fav idea

delphi technique: series of questionaires to find a decision

Majority rule: rule of majority

Consensus: reach consensus

Group decision support systems : like knowledge management

Decision trees

Question 21

premortem technique

Answer 21

plan a project and outline a plan.

ask all team members to see the project fail and write all reasons down.

Question 22

ESSENTIALS OF CONTROL

Answer 22

ESSENTIALS OF CONTROL

Question 23

organisational control has 2 functions

Answer 23

help managers determine wheter or why their strategy is achieving the desired results

early warning system incases when you get off track.

Question 24

what is organisational control

Answer 24

process by which an org. influences its subunits and members to behave in ways that lead to the attainment of organizational goals and objectives.

Question 25

4 steps of org. control

Answer 25

1. establish standards 2. measure performance 3. compare 4. take corrective action

Question 26

Controls come at a cost

Answer 26

financial damage to culture and reputation decrease responsiveness botched implementation (controls are misunderstood or interfering and making even more problems)

Question 27

benefits of org. control

Answer 27

improved cost and productivity control improved quality control opportunity recognition better ability to manage uncertainty and complexity better ability to decentralize decision making

Question 28

Examples of controls

Answer 28

Cost can be controlled using budgets productivity can be controlled by comparing how much each person can control quality can be controlled as response time/ accuracy, / by measuring!

Question 29

levels of control

Answer 29

Strategic : Big picture Operational : Execution strategic: make sure ship is going into the right direction Operation: make sure ship is in good condition

Question 30

Types of controls

Answer 30

Proactivity: adresses what we can do ahead of time to help our plan suceed. (feedforward control) concurrent control( monitoring and adjusting ongoing activities and processes) feedback controls (gather information about completed activity, evaluate and learn for future) outcome controls: little performance measures available , no coordination with other business units behavioral control: direct evaluation of managerial and employee decision making (not of results!)

Question 31

controls can take 2 forms

Answer 31

Financial controls | non financial controls

Question 32

Financial controls

Answer 32

balance sheet income / profit and loss cash flow statement

Question 33

non financial controls

Answer 33

controls where nonfinancial perfomrance outcomes are measured its important because these are likely to affect profitability in a long run

Question 34

examples of nonfinacial controls

Answer 34

``` employee satisfaction employeee turnover new products launched customer satisfaction brand power number of defects product returns capacity utilization quality of purcahsed inputs new patents number of emplyoees with phd ... ```

Question 35

CAREFULL

Answer 35

nonfinacncial controls should just "add " to the financial controls and not substitute them !!!

Question 36

other mistakes

Answer 36

not using nonfinancial controls controls not linked to strategy failling to validate links For instance, (1) good employee recruiting leads to (2) satisfied employees, which leads to (3) an employee base that creates value, which leads to (4) satisfied customers, which leads to (5) profitable customer buying patterns, which lead to (6) good profitability. Yikes! faililing to set appropriate performance tqargets measurement failure

Question 37

LEAN control

Answer 37

popular business control and improvement methodology ! system of nonfinancial controls used to improve product and service quality and decrease waste! principe is to use less of resources (spance, inventory, workers.. ) to produce comparable output! Avoid MUDA = WASTE!

Question 38

7 wastes of lean

Answer 38

``` defects overproduction transportation waiting inventory motion overprocessing ```

Question 39

5 core pricniples of lean

Answer 39

# define value from the customers perspective describe the value stream fro each product or service create flow in each value stream produce at the pace of actual customer demand (reduce lead time and increase flexibility) strive to continously improve all business operations

Question 40

Balanced scorecard

Answer 40

originally introduced to integrate financial and non financial controls in a way that provided a balanced understanding. evolved into a strategic performance management tool.

Question 41

what is a balanced scorecard

Answer 41

control system that tnraslates an organizations vision, mission and strategy into specific quantifiable goals and monitors the performance in terms of achieving this goals.