Please enable JavaScript.
Coggle requires JavaScript to display documents.
Managing Information & Decision-Making (Decision-making errors…
Managing Information & Decision-Making
POLC,information and decision-making
Decision-making is influenced by:
Sources
Quality
Reliability
Information
Ability to engage in critical thinking, analysis, and
reflection determines how well one makes
decisions based on available information
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
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
Managerial Problems and
Decisions
Types of Problems and Decisions
Well structured problems and programmed
decisions.
PROCEDURE -> RULE -> POLICY
Structured problems are easily defined
Programmed decisions are those handled by a
routine approach
Un-structured problems and non-programmed
decisions
UNIQUE + NON-RECURRING = TAILORED SOLUTION
Un-structured problems are new or unusual
Non-programmed decisions need a custom
approach
Types of Decisions
Rational:
Rational decisions describe choices that are
consistent and value-maximising
Assumes:
– 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
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
Product of: Previous Experience, “Gut-Level Feeling” and Accumulated judgement
Group Decision-making
Pros and cons of 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
Decision-making errors
Overconfidence
hindsight
self-serving
randomness
representation
availability
framing
immediate gratification
selective perception
framing
confirmation
Make Better Decisions (Reading Week 6)
A Framework for
Improving Decisions
Identification
Inventory
Intervention
Institutionalization.
Multiple Perspectives Yield
Better Results
Warn managers not to build into their business analytical models
Make assumptions clear
Practise 'model management'
Cultivate human backups.
video (group decision making)
managers need to control ego when making decisions
need to listen to all ideas; more brains are better than one
need to encourage creativity and contribution, even if ideas are not the best