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MGF1010 Week 6 - Coggle Diagram
MGF1010 Week 6
POLC, Information, Decision Making
Influenced by:
Sources
Quality
Reliability of information
Decision-making skills based on available info
Critical thinking
Analysis
Reflection
Execution of managerial functions of POLC
How do managers arrive at decisions?
Rationality
Bounded rationality
Intuition
Rationality
Managerial decision assumed to be rational
Choices are:
Consistent
Value-maximising
Assumes:
Problem is clear and unambiguous
Single, well defined goal
All alternatives and consequences are known
Preferences are clear
Preferences are clear and stable
No time or cost constraints exist
Final choice will maximise payoff
Bounded Rationality
Decisions made within parameters of a simplified model
Captures essential features of problem
Bounded by limitations and constraints managers attempt to behave rationally
Creates "good enough" decisions
Types of problems and decisions
Well-structured problems and programmed decision
Procedure > Rule > Policy
Un-structured problems and non-programmed decisions
Unique + Non-recurring = Tailored solution
Conditions of group decision-making
Advantages
More complete information and knowledge
More diverse alternatives
Increases acceptance of a solution
Increase legitimacy
Disadvantages
Time consuming
Minority domination
Pressure to conform
Ambiguous responsibility
Decision-making conditions and styles
Conditions
Certainty
Accurate decision because the
outcome of every alternative is known
Risk
Estimate the likelihood
of certain outcome
Uncertainty
Neither certain
nor reasonable
probability estimates
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
Intuition
Product of:
Previous experience
"Gut-level feeling"
Accumulated judgement