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Week 6- Managing info. & decision-making (What? (Decision-making…
Week 6- Managing info. & decision-making
What?
Decision-making influenced by
Sources
Quality
Reliability of info
Ability to engage in
Critical thinking
Analysis
Reflection
How well one make decisions based on info.
Execution of POLC results in decision-making
Organisational decision become data driven
Need to consider inclusiveness of data (who use is)
For productive purposes
Big data & analytics changing contemporary debates and arguments around decision making
How to arrive at decision?
Rationality
Decision making is assumed to be rational
Choices are consistent & value-maximising
Maximise economic benefit for org
Assumes
Clear & unambiguous problem
Single, well-defined goal to be achieved
Alternatives & consequences are known
Clear, stable & constant preferences
No time/cost constraints
Final choice will maximise payoff
Bounded rationality
Decisions made within parameters that captures the essential problems
Bounded by limitations & constraints, managers attempt to behave rationally
Good enough/satisficing decisions
Intuition
Previous experience
Gut-level feeling
Accumulated judgement
Managerial problems & decisions
Type
Problems
Well-structured
Easily defined
Un-structured
New or unusual
Decisions
Programmed
Routine approach
Un-programmed
custom approach
Group Decision-making
Advantages
More complete info & knowledge
More diverse alternatives
Increase acceptance of solution
Increase legitimacy
Disadvantages
Time consuming
Minority domination
Pressure to conform
Ambiguous responsibility
Decision-making conditions, styles & errors
Conditions by managers
Certainty
Make accurate decisions because the outcome is known
Risk
Estimate the likelihood of certain outcomes
Uncertainty
Neither certainty nor reasonable probability estimates
Styles
Linear
Use external data & facts
Process info through rational, logical thinking
Non-linear
Internal sources of info
Process info through internal insights, feelings & hunches
Errors & biases
Overconfidence
Hindsight
Immediate gratification
Anchoring effect
Selective perception
Confirmation
Framing
Availability
Representation
Randomness
Sunk costs
Self serving