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Managing and Decision Making (intuition a product of (Gut-level feeling,…
Managing and Decision Making
Rationality
Assumptions
A single well defined goal
Preferences are clear
Problem is clear and unambigueous
Final Choice will Maximize pay off
DECISIONS OUT OF PURE LOGIC AND INTELLECT
intuition a product of
Gut-level feeling
accumulated judgment
previous experience
Conditions
Certainty
Outcome of every alternative is known - allows for accurate decision making
Risk
Estimating likelihood of certain outcomes
Uncertainty
No certainty or reasonable probability estimates
Styles
Linear
Preference for external data and facts
Information processed through logical thinking
Non-linear
Preference for internal information sources
Information processed through feelings, hunches and insights
Group Decision-Making
Disadvantages
Time consuming
Minority domination
Pressure to conform
Ambiguous responsibility
Advantages
Increase acceptance of a solution
Increase legitimacy
More diverse alternatives
More complete information&knowledge
BOUNDED RATIONALITY
Bounded by limitations and boundries
Good Decision here means satisfying
Decisions made within the parameters often cover essential features of the problem
Problem and Decision
Well-Structured and Programmed decision
Un-structured problems and non-programmed decision
Team Decision Making Video
Errors and biases
Examples of Decision Making Errors and Biases
Overconfidence
Anchoring Effect
Hindsight
Selective Perception
Confirmation