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Managing Information and Decision Making (Methods (Rationality (Assumes:…
Managing Information and Decision Making
Decision-making influenced by sources, quality and reliability of info
Ability to engage in critical thinking, analysis and reflection determines on how well one makes decisions based on available info
Execution of managerial functions of POLC = decision making
Methods
Rationality
managerial decision making assumed to be rational
Describe choices that are profit maximising and consistant
Maximise economic benefit for the organisation
Assumes:
Clear/unambiguous problem
A single, well defined goal to be achieved
All alternatives/consequences known
Clear preferences
Preferences are constant and stable
No time or cost contraints exist
Final choice will maximise profit
Bounded rationality
Decisions made within the parameters that captures the essential features of a problem
bounded by limitations and constraints
decisions are "Good enough"
Intuition
Previous Experiences
Gut-Feeling
Accumulated Judgement
Managers have to consider inclusiveness of data
Group decision making
disadvantages - time consuming, minority domination, pressure to conform, ambiguous responsibility
Advantages - more complete information an knowledge, more diverse alternatives, increases acceptance of a solution, increase legitimacy
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