TEMO Flashcards
decision making
The process by which managers respond to opportunities and threats by analyzing options and making determinations about specific organizational goals and courses of action.
programmed decision
making
Routine, virtually
automatic decision making
that follows established rules
or guidelines.
nonprogrammed decision
making
Nonroutine decision making that occurs in response to unusual, unpredictable opportunities and threats.
intuition
Feelings, beliefs, and hunches that come readily to mind, require little effort and information gathering, and result in on-the-spot decisions.
reasoned judgment
A decision that requires time and effort and results from careful information gathering, generation of alternatives, and evaluation of alternatives.
classical decision-making
model
A prescriptive approach to decision making based on the assumption that the decision maker can identify and evaluate all possible alternatives and their consequences and rationally choose the most appropriate course of action.
optimum decision
The most appropriate decision in light of what managers believe to be the most desirable consequences for the organization.
administrative model
An approach to decision making that explains why decision making is inherently uncertain and risky and why managers usually make satisfactory rather than optimum decisions.
bounded rationality
Cognitive limitations that
constrain one’s ability to
interpret, process, and act on
information.
risk
The degree of probability
that the possible outcomes
of a particular course of
action will occur.
uncertainty
Unpredictability.
ambiguous information
Information that can be interpreted
in multiple and often
conflicting ways.
satisficing
Searching for and choosing an acceptable, or satisfactory, response to problems and opportunities, rather than trying to make the best decision.
heuristics
Rules of thumb
that simplify decision making
systematic errors
Errors
that people make over and
over and that result in poor
decision making.
prior hypothesis bias
A cognitive bias resulting from the tendency to base decisions on strong prior beliefs even if evidence shows that those beliefs are wrong.
representativeness bias
A cognitive bias resulting from the tendency to generalize inappropriately from a small sample or from a single vivid event or episode.
illusion of control
source of cognitive bias resulting from the tendency to overestimate one’s own ability to control activities and events.
escalating commitment
A source of cognitive bias resulting from the tendency to commit additional resources to a project even if evidence shows that the project is failing.
groupthink
A pattern of faulty and biased decision making that occurs in groups whose members strive for agreement among themselves at the expense of accurately assessing information relevant to a decision.
devil’s advocacy
Critical analysis of a preferred alternative, made in response to challenges raised by a group member who, playing the role of devil’s advocate, defends unpopular or opposing alternatives for the sake of argument.
dialectical inquiry
Critical analysis of two preferred alternatives in order to find an even better alternative for the organization to adopt.
organizational learning
The process through which managers seek to improve employees’ desire and ability to understand and manage the organization and its task environment.
learning organization
An organization in which managers try to maximize the ability of individuals and groups to think and behave creatively and thus maximize the potential for organizational learning to take place.