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Week 6- Managing Information and Decision Making - Coggle Diagram
Week 6- Managing Information and Decision Making
Link between information and decision making
Decision are influenced by the sources, quality and reliability of information
Big Data (analytics) is important
Decision making is part of POLC
Methods of Managerial Decision Making
Rationality- choices that are consistent and value maximising (often unrealistic as it assumes the problem is clear, outcomes are concrete and that there are minimal cost or time constraints)
Bounded rationality- make rational decisions, but are limited by their ability to process information (they satisfice, which means accept solutions which are "good enough", rather than maximise)
Intuition- subconscious process of making decisions based on experience, accumulated judgement and "gut level" feeling
Types of problems and decisions
Well-structured problems and programmed decisions
un-structured problems and non-programmed decisions
Collaborative Decision Making has pros and cons
Conditions of Decision Making
Certainty- can make accurate decisions because the outcome of every alternative is known
Risk- can estimate likelihood of certain outcomes
Uncertainty- has neither certainty not reasonable probability estimates
Decision Making Styles
Linear- external data and facts; rational and logical thinking
Non-linear: internal sources of information; internal insight, feelings and hunches
Decision Making Errors
Examples: Overconfidence, Immediate gratification, anchoring effect, selective participation, confirmation, framing, availability, representation, randomness, sunk costs, self-serving, hindsight