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Decision Making - Coggle Diagram
Decision Making
Conditions of decision making
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 and feelings
Uncertainty - Manager has neither certainty nor reasonable probability estimates
Risk - Manager can estimate the likelihood of certain outcomes
Certainty - manager can make accurate decisions because the outcome of every alternative is known
Decision making errors and biases
Over confidence, immediate gratification, anchoring effect, selective perception, confirmation, availability, representation, randomness etc.
How do managers arrive at decisions?
Rationality
Describe choices that are consistent and value maximising
Assumes that the problem is clear and ambiguous, a single well defined goal is to be achieved and that preferences are constant and stable
Intuition
Influenced by: previous experience, gut-level feeling and accumulated judgement
Bounded Rationality
Capture the essential features of a problem
Bounded by the limitations and constraints, managers attempt to behave rationally
Advantages And Disadvantages Of Group D/m
Adv:
More Complete Information And Knowledge
More Diverse Alternatives
Increase Acceptance Of A Solution
Increase Legitamacy
DisAdv:
Time Consuming
Minority Domination
Pressure To Conform
Ambiguous Responsibility
Managerial problems and decisions
Structured- procedure, rule, policy
Unstructured problems - Unique, non recurring