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Managing Information & Decision-Making (Decision-Making errors…
Managing Information & Decision-Making
types of problems and decisions
well structured problems and programmed decisions
rule
procedure
policy
un-structured problems and non-programmed decisions
Requires Unique solutions and decisions (tailored solution)
Methods of Decision Making
Rationality
Decisions assumed to be rational
Decisions maximize economic profit for org.
Bounded Rationality
Decisions between Parameters bounded by limitaions
Satisfying rather that maximizing decisions
Intuition
Based on experience & Gut-level & Accumlated Judgment
POLC, information and decision-making
Execution of the managerial functions of POLC results in decision-making.
Big Data changing contemporary debates & arguments around decision-making.
Managers must consider the inclusiveness of data and whether it is being used for productive purposes
Group Decision-making
Pros
Complete Information and knowledge
Creates more diverse alternatives
Increases acceptance of a solution as people feel they have contributed to its conception
Cons
Time consuming as more people give input
Minority groups can be dominated
People may agree with an idea due to peer pressure
Ambiguity about responsibility allocation
Conditions for Decision Making
Certanity
Accurate decisions as outcomes off all decisions are known
Risk
manager estimates likelihood of outcomes
Uncertanity
no valid certainty or probability estimates
Decision-making styles
Linear
utilises rational and bounded rationality
Preference for using external data & facts
Processes information through rational and logical thinking
Non-linear
preference for internal sources of information
process information through internal insights, feelings and hunches
Decision-Making errors
Overconfidence
Hindsight
Self-serving
Availblity
Representaion
Selective Perception
Sunk costs
Improving Decision Making
Identification
Inventory
Intervention
Institutionalization
Increases legitimacy
the value of collaborative decision-making