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(Methods of managerial decision making, GROUP LEVEL DECISION MAKING,…
Methods of managerial decision making
Rationality
choices that are consistent and value-maximising (economic benefit)
Assumes
problem is clear and unambiguous
A single, well-defined goal is to be achieved
All alternatives and consequences are known
Preferences are clear
Preferences are constant and stable
No time or cost constraints exist
Final choice will maximise payoff
Bounded Rationality
captures the essential features of a problem
bounded by the limitations and constraints
Intuition
Subjective, a process of:
‘gut level feeling’
accumulated judgement.
previous experience
Greater experience + emotional intelligence = more accurate intuitive judgements
Different circumstances: different feelings/ levels of intuition
GROUP LEVEL DECISION MAKING
Advantages
Diverse Alternatives
Larger knowledge base
Increased Legitimacy
Disadvantages
Time Consuming
Conformity Pressures
Minority Domination
Ambiguous Responsibility
Overall: Collaboration is more likely to allow for increased decision efficiency and conducive to wider agreement
MANAGERIAL PROLEMS AND DECISONS
WELL STRUCTURED PROBLEMS AND PROGRAMMED DECISIONS
PROCEDURE, RULE AND POLICY
FOR EXAMPLE, A CUSTOMER COMPLAINT ON COLD FOOD
UN-STRUCTURED PROBLEMS AND NON-PROGRAMMED DECISIONS
UNIQUE + NON RECURRING = TAILORED SOLUTION
FOR EXAMPLE, COVID-19