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Week 6: Managing Information and Decision-making (Decision making errors,…
Week 6: Managing Information and Decision-making
POLC, information & decision making
Decision-making influenced by sources, quality and reliabulity of information
consider inclusive data in addition to the use of data for productive purposes
effective managers must
analyze
engage in critical thinking
reflect
filter through bias
pick relevant info
How do managers arrive at 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
Decision-making conditions, styles
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
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
The value of collaboration in 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
Group Decision Making
The value of collaborative decision making (Steve Jobs)
“No, you see you can’t. If you want to hire great people and have them stay working for you, you have to let them make a lot of decisions and you have to, you have to be run by ideas, not hierarchy. The best ideas have to win, otherwise good people don’t stay.”
Decision making errors
Overconficdence
Immediate gratification
Anchoring effect
Selective perception
Confirmation
Framing
Availability
Representation
Randomness
Sunk Costs
Self-serving
Hindsight
Workshop reading: Make better decisions
identification
list and order important decisions
intervention
design roles
processes
systems, behaviours
inventory
which decisiosn need improvement?
what processes might make them more effective?
establish common language for decision making
institutionalization
orgs give managers the tools to decide how to decide
companies enlist decisions experts to work with execs
Assess quality of decision after the fact
could decisions or processes have been addressed better?