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managing information and decision-making - Coggle Diagram
managing information and decision-making
TYPES OF PROBLEMS AND DECISIONS
UN-STRUCTURED PROBLEMS
Problems that are new or unusual
information is ambiguous or incomplete
Managers rely on non-programmed decision making
Managerial level: upper levels
STRUCTURED PROBLEMS
easily defined problems
straightforward
Managerial level: lower levels
Programmed decisions
relies on previous solutions
handled by routine or standardised approach
Repetitive decision
Simple
non-programmed decisions
need a custom approach
unique
HOW DO MANAGERS ARRIVE AT DECISIONS
RATIONALITY
Assumes:
Problem is clear and unambiguous
A single, well-defined goal is to be achieved
All alternatives and consequences are known
Preferences are clear, constant and stable
No time or cost constraints exist
Final choice will maximise payoff
INTUITION
decisions made based on previous experience, gut feeling
greater experience better decision
Accumulated judgement
Gut-level feeling
Previous experience
Bounded rationality
managers satisfice rather than maximise
cannot analyse all informations
when decisions are made just to be "good enough"
-bounded by limitations and constraints
Bounded by limitations, so managers behave rationally
"good enough" decisions
Decisions with a simple model of the essential features of the problem
group decision-making
advantages
more complete picture of information and knowledge
more diverse alternatives
increase acceptance of a solution
increase legitimacy
disadvantages
time consuming
minority domination
pressure to conform
ambiguous responsibility
DECISION-MAKING CONDITIONS, STYLES AND ERRORS
certainty
manager makes accurate decisions
every alternative is known
Styles
linear: preferred using external data and facts
Non-linear: prefer internal sources of information
Errors
Overconfidence
Immediate gratification
Hindsight
Anchoring effect
Self-serving
Sunk costs
Selective perception
Randomness
Framing
Availability
Representation
risk
manager estimate likelihood of an outcome
uncertainty
manger has neither certainty or reasonable probability estimates