Textbook notes-Chapter 11-Decision Making

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Management (MGH)
Andrew Davidson

1 CHAPTER 11 DECISION MAKING WHAT IS DECISION MAKING Decision making: the process of developing a commitment to some course of action 1) involves making a choice among several action alternatives 2) a process that involves more than simply the final choice among alternative 3) the commitment of resources problem: a perceived gap bw an existing state and a desired state - decision making process involves the perception of exiting state, the conception of the desired state, and the steps that the chairperson takes to move from one state to the other Well structured problems a problem for which the existing state is clear, the desired state is clear, the desired state is clear, and how to get from one state to the other is fairly obvious program: a standardized way of solving a problem - programs usually go by rules, routines, standard operating procedures, rules of thumb - sometimes they come from experience and only exist in the head Ill structured problem problem for which the existing and desired states are unclear, and the method of getting to the desired state is unknown - usually unique, unusually and have not been encountered before - decision makers must resort to non-programmed decision making, they are likely to try to gather more info and be more self consciously analytical in their approach - can entail high risk and stimulate strong political consideration THE COMPLEAT DECISION MAKER-A RATIONAL DECISION-MAKING MODEL Perfect vs bounded rationality perfect rationality: a decision strategy that is completely informed, perfectly logical, and oriented toward economic gain - economic person is: 1) an father info about problems and solutions without cost and is thus completely informed 2) is perfectly logical, 3) has only one criterion for decision making economic gain - while economic person is useful for theoretical purpose, the perfectly rational characteristics embodied L30.4342L.5078434390[L89L370,O0.L8L432,N078 The Rational decision making process identify problem search for relevant information develop alternative solutions to the problem evaluate alternative solutions choose best solution implement chosen solution monitor and evaluate chosen solution Bounded rationality: a decision strategy that relies unlimited info and that reflects time constraints and political considerations www.notesolution.com
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