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Managing Information & Decision-Making (POLC, information and decision…
Managing Information & Decision-Making
POLC, information and decision-making
Managerial functions of planning, organising, leading, and controlling are executed through accessing information and using the same to decide between alternative courses of action.
Decision-making influenced by sources, quality, and reliability of information.
Ability to engage in critical thinking, analysis, and reflection determines how well one makes decisions based on available information.
As organizational decisions increasingly become more data driven, managers need to consider inclusiveness of data (i.e. who uses it) in addition to the use of data for productive purposes.
How do managers arrive at decisions?
Rationality
Managerial decision making is assumed to be rational
Rational decisions describe choices that are
consistent and value-maximising
Rational decisions made by managers “maximise” economic benefit for the organization
Bounded Rationality
Decisions made within the parameters of a simplified model that captures the essential features of a problem
Bounded by the limitations and constraints, managers attempt to behave rationally
“Good enough” decisions – “satisficing”
Intuition
Previous Experience, “Gut-Level Feeling” and Accumulated Judgment.
Managerial problems and decisions
Well structured problems and programmed decisions
Un-structured problems and non-programmed decisions
Group Decision-making
Advantages
• More complete information & knowledge
• More diverse alternatives
• Increases acceptance of a solution
• Increase legitimacy
Disadvantages
• Time consuming
• Minority domination
• Pressure to conform
• Ambiguous responsibility
Decision-making conditions, styles and errors
Conditions of decision-making
Certainty
– A manager can make accurate decisions because the outcome of every alternative is known
Risk
– A manager can estimate the likelihood of
certain outcomes
Uncertainty
– A manager has neither certainty nor reasonable probability estimates
Decision-making styles
Linear
– Preference for using external data
and facts
– Process information through rational, logical thinking
Non-linear
– Preference for internal sources of
information
– Process information through internal insights, feelings, and hunches