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(Week 6) Managing Information & Decision-Making (POLC, information…
(Week 6)
Managing Information &
Decision-Making
POLC, information and decision-making
Decisions influenced by sources, quality, reliability of info
Critical thinking determines how well one makes decisions
Managers need to consider inclusiveness of data
Managerial problems and decisions
Types of problems and decisions
Well structured problems and programmed decisions
Easily defined/routine
Unstructured problems and non-programmed decisions
New/unusual; requires custom approach
How do mangers arrive at their decisions?
Rationality
Value-maximising
Has assumptions
Clear, unambiguous problem
Single, well-defined goal
All alternatives and consequences known
Clear preferences
No time or cost constraints
Constant, stable preferences
Maximised payoff
Bounded Rationality
Satisfice
Limitations and constraints
Intuition
Previous experience
Accumulated judgement
Decision-making conditions, styles and errors
Conditions of decision-making
Certainty
Can make accurate decisions because the outcome 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
External data and facts
Process information through rational, logical thinking
Non-Linear
Internal sources of information
Process information through internal insights, feelings, and hunches
Decision-making errors
Overconfidence
Immediate gratification
Anchoring effect
Selective Perception
Confirmation
Framing
Availability
Representation
Randomness
Sunk costs
Self-serving
Hindsight
Group Decision Making
Advantages
More complex info & knowledge
More diverse alternatives
Increased legitimacy
Increased acceptance of a decision
Disadvantages
Time Consuming
Minority domination
Pressure to conform
Ambiguous Responsibility