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Canada (511,191)
Management (767)
MGM102H5 (131)
Lecture

Managing Decision Making and Sustainability

8 Pages
99 Views

Department
Management
Course Code
MGM102H5
Professor
Dave Swanston

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Description
Managing Decisions Making and Sustainability - Decision making o Process by which managers analyze the options facing them and make determinations, or decisions about specific organizational goals and courses of action o Good decisions result in selection of suitable goals and courses of action that increase performance o Bad decisions result in lower performance - Programmed decision making o Routine, virtually automatic decision making that follows established rules or guidelines - Non-programmed decision making o Occurs in response to unusual, unpredictable opportunities and threats - Rational decision making model o Prescriptive approach to decision making based on the idea that the decision maker can identify and evaluate all possible alternatives and their consequences and rationally choose the most suitable course of action o Making the optimum decision  Best decision in light of what mangers believe to be the most desirable future consequences for their organization - Administrative decision making model o An approach to decision making that explains why decision making is basically uncertain and risky and why managers usually make satisficing rather than optimum decision o Based on three important concepts  Bounded rationality • Cognitive limitations that constrain one’s ability to interpret, process, and act on information  Incomplete information • Information is incomplete due to o Full range of decision making alternatives is unknowable in most situations and the consequences are uncertain o Due to uncertainty, probabilities of alternative outcomes cannot be determined o Most information is ambiguous  Not clear, can be interpreted in multiple and often conflicting ways  Satisficing • Searching for and choosing acceptable, or satisfactory ways to respond to problems and opportunities, rather than trying to make the best decision • In real world, managers must rely on intuition and judgment to make best decision in face of uncertainty and ambiguity o Intuition  Ability to make sound decisions based on past experience and immediate feelings about the information at hand o Judgment  Ability to develop a sound opinion based on one’s evaluation of the importance of the information at hand - Steps in the decision making process o Recognize the need for a decision o Generate alternatives o Assess alternatives (according to weighted criteria) o Choose among alternatives o Implement the chosen alternative o Learn from feedback  Compare what actually happened to what was expected to happen as a result of the decision  Explore why any expectations for the decision were not met  Develop guidelines that will help in future decision making - Tips for Managers o Be the best you can be with the information you have at hand. If you wait for the best timing for your decisions, the opportunity will be gone o Be a the top of your game by continually scanning environment, being proactive, identifying the key trends and opportunities, and knowing when best to make decisions o Know your audience and the purpose of the decision you are about to make o Learn to treat successes and failures as stepping stones in your decision making practice - 10 most common mistakes o Plunging in  Beginning to gather information an reaching conclusions too early o Frame blindness  Creating a mental framework for your decision o Lack of frame control  Failing to define the problem in more than one way o Overconfidence in your judgment  Failing to gather key factual information o Shortsighted shortcuts  Relying inappropriately on rules of thumb o Shooting from the hip  Failing to follow a systematic procedure when making the final decision o Group failure  Failing to manage the group decision making process o Fooling yourself about feedback  Failing to interpret the evidence from past outcomes correctly o Not keeping track  Failing to keep systematic records to track the results of your decisions o Failure to audit your decision process  Failing to create an organized approach to understand your own decision making - Cognitive biases in decision making o These in result in poor decision outcomes  Prior hypothesis bias • A cognitive bias resulting from the tendency to base decisions on strong prior beliefs even if evidence shows that those beliefs are wrong  Representativeness bias
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