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Management: Information and decision-making - Coggle Diagram
Management: Information and decision-making
How do mangers arrive at decisions?
bounded Rationality
Decisions made within the parameters of a simplified model that captures the essential features of a problem.
Intuition
Steve jobs and the evolution of his intuition. They are made from previous experiences, gut feelings and accumulated judgement.
Rationality
Managerial decisions making is assumed to be rational
Managerial Problems & Decisions
Well Structured problems and programmed decisions
Structured as:
Procedure
Rule
Policy
Un Structured problems & programmed decisions
Unique + Non Recurring = A Tailored Solution
Group decision making
Disadvantages
Time consuming. Minority dominating. Pressure to conform. Ambiguous responsibility.
Advantages
More complete infomation & knowledge. More diverse alternatives. Increase acceptance. Increase legitimacy
Decision Making Conditions Styles & Errors
Decision Making Styles
Linear
Preference for using external data and facts, rational, logical thinking
Non-linear
Preference for internal sources of information, through internal insights, feelings and hunches
Conditions
Risk
a manager can estimate the likelihood of certain outcomes
Certainty
A manager can make accurate decisions because the outcome of every alternative is known
Uncertainty
A manager has neither certainty nor reasonable probability estimates
Errors
Overconfidence, hindsight, immediate gratification, self-serving, sunk costs, randomness, representation, availability, framing, confirmation, selective perception, anchoring effect,