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Managing Information & Decision-Making (Managerial problems and…
Managing Information & Decision-Making
POLC, information and decision-making
Decision-making
sources
quality
reliable of information
managers consider inclusiveness of data
POLC result in daily decision-making
How do managers arrive at decisions?
rationality
single and well defined
clear & ambiguous
alternatives and consequences known
preferences
clear
constant
stable
no time/cost constraints
maximise payoff
bounded rationality
simplified model
bounded by
limitations
constraints
attempted rationality
decision "good enound'
satisficing
intuition
previous experience
gut-level feeling
accumulated judgment
Managerial problems and decisions
well structured
easily defined
procedure - rule - policy
un-structured
new or unusual
unique + non-recurring = tailored solution
programmed
handled with routine approach
non-programmed
need custom approach
Group Decision-making
advantages
complete info and knowledge
diverse alternatives
acceptance of solution
increased legitimacy
disadvantages
time consuming
minority domination
pressure to conform
ambiguous responsibility
Decision-making conditions, styles and errors
conditions
certainty
accurate decisions
alternative outcome is known
risk
estimates likelihood
uncertainty
no certainty
no reasonable estimates
styles
linear
uses external data and facts
rational, logical thinking
non-linear
internal data
internal insights, feelings and hunches
errors
overconfidence
immediate gratification
anchoring effect
elective perception
availability
self-serving
hindsight