Chapter 11 Decision Making 09/12/2011 2:25:00 PM
Decision Making
Involves making a choice between several alternatives
Is a process
Usually involves some commitment of resources
A problem is a perceived gap between and existing state and a desired state.
Decision making is a process of problem solving.
A well-structured problem is a problem where the existing and desired state
is clear, and how to get from one state to the other is fairly obvious. Since
decision making takes time and is prone to errors, organizations program
(standardized way of solving a problem) the decision making for well-
structured problems. Example of programs:
Rules
Routines
SOPs
Rule of thumb
Other come from experience and exist only in the head
An ill-structured problem is one where the existing and desired states are
unclear and there is method to get from one state to the other. They tend to
be more complex and have a high degree of uncertainty. Cannot use a
program to make these decisions.
A Rational Decision-Making Model
Identify Problem
Search for Relevant Information
Too Little Information vs. Information Overload
Conformation Bias the tendency to search for information that conforms to
one’s own definition or solution to a problem
Develop Alternative Solutions to the Problem
Evaluate Alternative Solutions
Choose Best Solution
Implement Chosen Solution
Monitor and Evaluate Chosen Solution
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