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MGHB02H3 Study Guide - Brainstorming, Satisficing, Groupthink


Department
Management (MGH)
Course Code
MGHB02H3
Professor
Samantha Montes

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Decision Making 10/13/2014
What is Decision Making?
Decision making: the process of developing a commitment to some course of action
Problem: a perceived gap between an existing state and a desired state
Well-structured problems
Well-structured problem: a problem for which the existing 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
Ill-structured problems
Ill-structured problem: a problem for which the existing and desired states are unclear and the
method of getting to the desired state is unknown
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
Bounded rationality: a decision strategy that relies on limited information and that reflects time
constraints and political considerations
Framing: aspects of the presentation of information about a problem that are assumed by decision
makers
Cognitive biases: tendencies to acquire and process information in an error-prone way
Problem Identification and Framing
Perceptual defense
Problem defined in terms of functional specialty
Problem defined in terms of solution
Problem diagnosed in terms of symptoms
Information Search
Too little information
Confirmation bias: the tendency to seek out information that conforms to one’s own definition of or
solution to a problem
Too much information
Information overload: the reception of more information then is necessary to make effective
decisions
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