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Managing Information & Decision-Making (POLC, information and decision…
Managing Information & Decision-Making
POLC, information and decision-making
The execution of the managerial functions of POLC results in decision-making, often daily
Big Data and its associated analytics changing contemporary debates and arguments around decision-making
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
Decision-making influenced by sources, quality, and reliability of information
Methods of managerial decision-making
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”
Rationality
Rational decisions describe choices that are consistent and value-maximising
Rational decisions made by managers “maximise” economic benefit for the organization
Managerial decision making is assumed to be rational
– The problem is clear and unambiguous
– A single, well-defined goal is to be achieved
– All alternatives and consequences are known
– Preferences are clear
– Preferences are constant and stable
– No time or cost constraints exist – Final choice will maximise payoff
Intuition
relying on one’s gut and experience to make decisions
easy and requires no data
the subconscious can be effective at weighing options
typically the least accurate of decision approaches
decision makers are easily swayed by context
Managerial problems and decisions
Types of problems and decisions
Well structured problems and programmed decisions
Structured problems are easily defined
Programmed decisions are those handled by a routine approach
Un-structured problems and non-programmed decisions
Un-structured problems are new or unusual
Non-programmed decisions need a custom approach
Group Decision-making
Pros of group decision-making
More diverse alternatives
Increases acceptance of a solution
More complete information & knowledge
Increase legitimacy
Cons of group-decision-making
Minority domination
Pressure to conform
Time consuming
Ambiguous responsibility
Condition, styles, errors of decision-making
Styles of decision-making
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
Errors of decision-making
Conditions of decision-making
Risk:A manager can estimate the likelihood of certain outcomes
Uncertainty: A manager has neither certainty nor reasonable probability estimates
Certainty:A manager can make accurate decisions because the outcome of every alternative is known