MGMT1001 Chapter Notes - Chapter 7: Decision-Making, Predictive Modelling, Bounded Rationality
Individual and Group Decision Making
- Decision making is two different processes of identifying and choosing alternative
courses of action in which they are a choice and are called decisions
o Rational decision making (classical model) is analytical and slow as managers
(1) identify a problem or opportunity to determine the actual versus desirable
and is a matter of diagnosis, (2) think up alternative solutions that are
obvious and also creative to weight up possibilities, (3) evaluate alternatives
and select a solution based on questioning ethical reasoning, feasibility, and
effectiveness, and (4), implementing and evaluating chosen solution.
Implementation that is successful is done by careful planning and having
sensitivity to those affected
o Non-rational decision making are decisions determined by assumption of
difficulty, and if a decision is risky. → series of models encompassing it
▪ Bounded rationality model is limited by constraints and satisfices
▪ Incremental model alleviates problems through small, short steps
▪ Intuition model follows the conscious, but can speed up process
- Curse of knowledge affects decision making due to people believing their expertise
and knowledge puts them above others in their positions and perspectives
- Evaluating unsuccessful actions can be done through (1) giving time, (2) changing it
slightly, (3) trying alternatives, (4) completely starting over from the draw board
- Evidence based management are principles based on best evidence for organisation
o Problems with this management style is because there is too much evidence,
not enough valuable evidence, evidence not applying, people misleading
others, side effects outweighing cure, stories are more persuasive
- Predictive modelling predicts behaviours and anticipates consequences of change
- Risk propensity is willing to take a risk in the potential of greater payoff
- Decision making style reflects combination of individuals perceiving and responding
to information provided to them
- Value orientation is about one making decisions based on people centred concerns
- Kowledge of deisio akig styles is doe through kowig thyself, iflueig
others, dealig with oflit
find more resources at oneclass.com
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Document Summary
Implementation that is successful is done by careful planning and having sensitivity to those affected: non-rational decision making are decisions determined by assumption of difficulty, and if a decision is risky. Series of models encompassing it: bounded rationality model is limited by constraints and satisfices. Incremental model alleviates problems through small, short steps. Intuition model follows the conscious, but can speed up process. Curse of knowledge affects decision making due to people believing their expertise and knowledge puts them above others in their positions and perspectives. Evaluating unsuccessful actions can be done through (1) giving time, (2) changing it slightly, (3) trying alternatives, (4) completely starting over from the draw board. Predictive modelling predicts behaviours and anticipates consequences of change. Risk propensity is willing to take a risk in the potential of greater payoff. Decision making style reflects combination of individuals perceiving and responding to information provided to them.
