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WEEK 6: Managing Information and Decision-Making - Coggle Diagram
WEEK 6: Managing Information and Decision-Making
LO2: Method of Decision-Making
Rationality =
objective + logical/consistent + value maximising
Problem is clear/unambiguous
LIMITATION;
most MGMT situations do NOT meet all these conditions
ALTERNATIVE;
bounded rationality (more contingent)
Single, well-defined goal to be achieved
All alternatives/consequences known
Preferences clear
Preferences constant/stable
No time/cost constraints
Final choice maximised pay off
Bounded Rationality =
parameters acknowledging essential features of problem + limitations and constraint +
attempt
to behave rationally
LIMITATION;
most decisions do not fit assumptions of perfect rationality, instead they
sacrifice
.
Influence of organisational culture, internal politics, power consideration and
escalation of commitment
= increased commitment to a previous decision despite evidence that it may have been wrong.
Intuition =
previous experience +
gut-level feeling + accumulated judgement
Almost half of decisions are intuitive rather than a result of rational formal analysis (MGMT textbook)
Complementary to rationality/bounded rationality
Role of emotions in decision-making increasing = MGMT act quickly on limited information bc of past experience, intense emotion (study shows this is a benefit)
Intutition =
experience-based decisions + affect-intitate ddecisions + values/ethics-based decisions + subconscious mental processing + cognititve-based decisions
LO4: Group Decision Making
Collaborative decision making can be valuable
New and effective ideas may surface
These new ideas may reuslt positive impacts to the business
Advantages
More complete information and knowledge
Diverse alternatives
Increases acceptance of a solution when everyone's is involved and opinion is heard
Increases legitimacy
Disadvantages
Time consuming
Minority domination
Pressure to conform
Ambiguous responsibility
LO5: Decision making conditions, style and errors
Decision-Making Styles
Linear
Uses external data and facts
Process info through rational, logical thinking
Non- linear
Internal source of info
Process info through
internal insights
feelings
hunches
Decision- Making Errors
Confirmation
Hindsight
Immediate gratification
Representations
Conditions of decision making
Risk
estimating the probability of certain outcomes
Uncertainty
No certainty or reasonable probability estimates
Certainty
Accurate decisions (outcome is known)
LO3: Managerial problems and decision making
Well-structured and programmed decisions
Easy defined problems
Routine and standardise the approach to decision making
procedure → rule → policy
Un-structured problems and non-programmed decisions
Unstructured problems that are new and unusual
Require a new structure and decision-making process to be resolved
Will not be applicable to routine and standardised decision making
unique + non recurring = tailored solution
Davenport Reading
Decision making/process centralised to the individual in MGMT = poor MGMT strategy
Mitigated by adopting of four step strategy;
Identifying/priortising decisions that must be made (identification)
Examining factors involved in each (inventory)
Designing roles/processes/systems/behaviour to improve decisions (intervention)
Instiutionalising new approach through trainging/refined data analysis/outcome assesment (institutionalisation)
LO1:POLC, Information and Decision-Making
Decision making is influenced by
Sources
Quality
Reliability of Information
Big Data and analytics influence contemporary debates and therefore decision making
Decision making involves
Critical thinking
Anaylsis
Reflection
Use of POLC