Management Decision Making Flashcards
How does the scientific decision making process work? 6 steps
Set objectives
Collect data
Analyse data
Review decisions
Implement decision
Make decision
What is scientific decision making?
Making decisions based on data
What does using scientific decision making reduce?
The risk of making expensive mistakes
What is 3 disadvantages of scientific decision making?
Expensive
Time-consuming
Can be inaccurate
What is intuitive decision making?
Making decisions based on a hunch or gut instinct
What is 2 advantages of using intuitive decision making?
Quick
Can be no data
What is 2 disadvantages of using intuitive decision making?
Risky to rely on.
Can make mistakes
What 3 things can influence decisions?
Risk
Reward
Uncertainty
How does risk influence decisions?
Some decisions can be high risk but if successful, can lead to big rewards.
How can reward influence decisions?
Managers expect decisions to bring rewards. Rewards can be financial or beneficial to the business.
How can uncertainty influence decisions?
No one for sure knows the outcome. Can’t predict everything
What is opportunity cost?
The benefit that’s given up in order to do something else
What does opportunity cost mean?
The value of the next best alternative that’s been given up
Why does a mission influence a manager’s decision-making?
All decisions will take the mission into account.
Why does a business’s objectives influence a manager’s decision making?
The objectives are a business’s targets so decisions will be made with the aim of achieving its objectives.
