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Managing and Decision making - Coggle Diagram
Managing and Decision making
GROUP DECISION-MAKING
ADVANTAGES
More complete information & knowledge
More diverse alternatives
Increase legitimacy
Increases acceptance of a solution
Disadvantages
Minority domination
Pressure to conform
Time consuming
Ambiguous responsibility
THE VALUE OF COLLABORATIVE DECISION-MAKING
If you want to hire great people and have them stay working for you, you have to let them make a lot of decisions and you have to, you have to be run by ideas, not hierarchy. The best ideas have to win, otherwise good people don’t stay.
How managers make a decision
Rationality
Rational decisions describe choices that are consistent and value-maximising
Bounded Rationality
Leads to ‘Good enough’ decisions - ‘satisficing’, satisficing rather than optimising
Intuition
Product of previous experiences, accumulated judgement, gut feeling
Types of managerial problems
Well structured problems
Structured problems are easily defined, Require structured solutions
Un-structured problems
Un-structured problems are new or unusual, they have not been seen before therefore requiring a new structure to be created
Decision making Styles
Linear
Preference for using external data and facts
Process information through ration, logical thinking
Grounded approach
Non-linear
Preference for internal sources of information
Process information through internal insights, feelings and hunches
Factor in things that don’t necessarily need to be accounted for
Nuanced style of decision making
Decision making conditions
Certainty
A manager can make accurate decisions because the outcome of every alternative is known
Risk
A manager can estimate the likelihood of certain outcomes
Uncertainty
A manager has neither certainty nor reasonable probability estimates
Decision making errors
Over confidence
Immediate gratification
Anchoring effect
Selective perception
Confirmation
Framing
Availability
Representation
Randomness
Sunk costs
Self-serving
Hindsight