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Managing information and decision-making - Coggle Diagram
Managing information and decision-making
Individual decision making
Advantages
More efficient
Greater control - best position to decide how the decision is carried out and controlled
Disadvantages
Methods of managerial decision-making
Rationality
Assumes =
The problem is clear and unambiguous
A single, well-defined goal is to be achieved
Preferences are clear
Preferences are constant and stable
No time or cost contraints
Final choice will maximise payoff
Consistent and value maximising decisions
Bounded Rationality
"Good enough" decision making
Managers are limited/bounded by their ability to process information - but they attempt to behave rationally
Intuition
Previous experience
"Gut-Level Feeling"
Accumulated Judgement
Managerial problems & decisions
Structured problems
Procedure - rule - policy
Un-structured problems
Unique + non-recurring = tailored solution
Decision making conditions
Certainty
Risk
Uncertainty
Decision making styles
Linear
Using external data & facts
Process info through rational, logical thinking
Go step 1, then step 2 and then step 3
Non-linear
Uses internal sources of info
Process info through internal insights, feelings and hunches
Can do steps simultaneously
Decision making errors
eg. Overconfidence
eg. Randomness
Group decision making
Advantages
More complete information and knowledge
More diverse alternatives
Increases acceptance of a solution
Increases legitimacy
Disadvantages
Time consuming
Minority domination
Pressure to conform
Ambiguous responsibility