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CHAPTER 5: MANAGERIAL DECISION MAKING - Coggle Diagram
CHAPTER 5:
MANAGERIAL DECISION MAKING
Types of decisions
Programmed decisions
Recurring problems
Apply rule
Nonprogrammed decisions
Unique Situations
Poorly defined
Unstructured
Important consequences
Problems of decisions
Certainty
Situation in which all information is fully available
Risk
Future outcomes associated with an alternative are subject to chance
Uncertainty
Depends on the amount and value of information available
Ambiguity
Making decisions in difficult situations
The goals and the problem are unclear
Wicked decisions involve conflict over goals and have changing circumstances, fuzzy information, and unclear links
There is often no “right” answer
Decision-making models
Administrative model
Political model
Classical model
Decision-making steps
1.Recognition of Decision Requirement
Diagnosis and Analysis
Develop Alternatives
4.Selection of Desired Alternative
Implementation of Chosen Alternative
Evaluation and Feedback
Why Do Managers Make Bad Decisions?
Being influenced by initial impressions
Justifying past decisions
Seeing what you want to see
Perpetuating the status quo
Being influenced by problem framing
Overconfidence
Personal Decision Framework
Directive style – People who prefer simple, clear-cut solutions to problems
Analytic style – Managers prefer complex solutions based on a lot of data
Conceptual style – Managers like a broad amount of information => Social influences
Behavioral style – Managers with a deep concern for others
Innovative Decision Making
Start with brainstorming
Use hard evidence
Engage in rigorous debate
Avoid groupthink
Know when to bail
Do a postmortem