WA10

Why is decision making important to managers?

Decision making is important to maximize effectiveness and in order to ensure that management is taking
the best course of action of many possible paths. ( to decide between several things and come to a
conclusion)
What type of decisions do top/middle managers/supervisors make?
Managers make several different types of decisions including programed ( regular) and
nonprogrammed(conscious decisions). However, these decisions can also be classified into
operational(day today) tactical (plan for getting things done ) and strategic (strategic).
Decision Making-selecting choices among alternative courses of action
Programed Decisions-decisions that occur frequently enough that we develop an automated response to
them
Decision Rule-Automated program response (emails automated response)(if this than that)
Nonprogrammed Decisions-unique and important decisions that require conscious thinking, information
gathering, and careful consideration of alternatives.
Decisions In Orgs-^ strategic, tactical, operational
Strategic-A decision that sets the course for an organization
Tactical- decisions about how things will get done
Operational- decisions that employees make each day to run the organization.
Analysis Paralysis- Where overanalyzing leads to no decision being made
The Rational Decision-Making Model-
1. Identify The Problem- What are you trying to decide?
2. Establish Decision Criteria- What are the most important factors or parts of the decision that are
necessary for the decision to have success?
3. Weigh Decision Criteria-Decide which factors are most important?
4. Generate Alternatives-Figure out all possible decisions you could make considering the criteria.
5. Evaluate The Alternatives- Evaluate alternatives to figure out which option is more optimal.
6. Chose The Best Alternative- Figure out which decision is the best
7. Implement The Decision (Self Explanatory)
8. Evaluate The Decision- Was the decision the right one? What was good about this? What was
bad? Etc. Etc.

In the rational decision-making model, where would you consider the ethical implications of your
decision?
You can consider ethical implications in step 5 evaluate alternatives where you can consider all
problems associated with each option including ethical issues.
Problem Identification-the step in which the need for problem solving becomes apparent.
Imersion-the step in which the decision maker thinks about the problem consciously and gathers
information
Incubation- the stage where the individual sets the problem aside and does not think about it for a while.
Illumination-the insight moment when the solution to the problem becomes apparent to the person
Fluency-the number of ideas a person is able to generate.
Flexibility-how different the ideas are from one another.
Originality-how unique a person’s ideas are
Brainstorming- a group process of generating ideas that follows a set of guidelines
Idea Quotes-when the group must reach a set number of ideas before they are done
Wildstorming-where the group focuses on ideas that are impossible and then imagines what would need
to happen to make them possible.
Crowdsourcing-outsourcing a problem to a crowd
Anchoring and Adjustment Bias-The tendency for individuals to rely too heavily on arbitrary numbers,
irrelevant traits or facts when making decisions.
Availability Bias- a situation in which information that is more readily available is seen as more likely to
occur.
Conformation Bias-when a certain idea or belief is held and course of action seeks to confirm these
beliefs.
EOC Bias-hen individuals continue on a failing course of action after information reveals this may be a
poor path to follow.
Framing Bias-the tendency of decision makers to be influenced by the way that a situation or problem is
presented.
FA error- a bias that exists when positive outcomes are seen as a function of personal characteristics while
negative outcomes are attributed to external circumstances
Hindsight Bias- when individuals look backward in time where mistakes made seem obvious after they
have already occurred.
Judgments about CAC Bias-e (1) correlation (2) temporal order, and (3) ruling out other
potential causes
Sampling Bias-occurs when individuals make generalizations from a small sample
Overconfidence Bias- When individuals overestimate their ability to predict future events
How do you avoid each of these biases in decision making?
It is nearly impossible to attempt to avoid each of these biases successfully at least not without narrowing
your resulting solutions almost entirely. Therefore, the best solution in my opinion is to remain objective
and think about all options and possibilities without holding to much attachment to one thing or another.
What are the advantages and disadvantages of group decision making?
The advantages of GDM are that you have a group of different voices that can come together and share
their differing opinions. However sometime when people have clashing opinions it can create unrest and
an argumentative atmosphere which is a disadvantage. Also there are more chances that someone might
disapprove of your plan.
Social Loafing-the tendency of some members to put forth less effort while working within a group
Groupthink- tendency to avoid critical evaluation of ideas the group favors.
IoI-shared by most or all of the group members that creates excessive optimism and encourages members
to take extreme risks.
Collective Rationalization- Where members downplay negative information or warnings
UBIGIM- That incline members to ignore ethical or moral consequences of their actions
SteryotypedVOG-hen groups discount rivals’ abilities to make effective responses.
Direct Pressure- on any member who expresses strong arguments against any of the group’s stereotypes.
Self-Censorship-when members of the group minimize their own doubts and counterarguments.
Illusion Of Unanimity- based on self-censorship and direct pressure on the group
Emergence of SPMG-where one or more members protect the group from information that runs counter
to the group’s assumptions and course of action.
What should groups/Individuals/Leaders do to avoid groupthink?
Encourage everyone to have their own opinions and to avoid agreeing with something just because it
seems good or the person giving that reasoning seems trustworthy and to form your own opinion and as a
group collectively agree not to pressure one another. Same as group for individuals. Leaders should
facilitate productive discussion by asking all members what they think and encouraging them to speak up
and bring their own ideas.
Consensus- reaching an agreement
Delphi Technique-a group process using written responses to a series of questionnaires
Ethical Champions- Those that move groups to be more ethically aware, to reduce moral disengagement,
and, ultimately, to engage in more ethical team decisions
Majority Rule- a decision-making rule where each member of the group is given a single vote, and the
option that receives the greatest number of votes is selected
NGT-a method of facilitating a group of people to produce a large number of ideas in a relatively short
time period
GDSS-An interactive computer-based system that combines communication and decision technologies to
help groups make better decisions.
KMS- A system for managing knowledge
Decision Trees-diagrams in which answers to yes or no questions lead decision makers to address
additional questions until they reach the end of the tree

I used to think that decision making was a simple prossecss of yes or no this or that but now I realize that
companies have to factor in many probabilities and choices in order to create the best outcome.