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Exam 2 Objectives (got 93% on the test)

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MGT 3200
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1MANAGEMENT 3200EXAM 2 OBJECTIVES FROM THE NOTESOUTSIDE READINGDECISIONMAKING 1Is decisionmaking a function of management No Apart of every function of managementClosely associated with planning2Why do we make decisions as managersDecisions are means to an endTo achieve operative goals and overall organizational goals3Whats the difference between programmed and nonprogrammed decisionsProgrammed decisionsare specific procedures that have been developed for repetitive and routine problems Rule or standardized operating procedureIncrease efficiency Nonprogrammed decisionsdecisions made for novel unique complex and unstructured problemsWhere you need to put in time and effortNeed to have conceptual kills intuition and creativity4Do managers make more programmed or nonprogrammed decisions in generalProgrammed decisions st1 lineprogrammed Top mgtnonprogrammed5What is decisionmaking under conditions of certaintyManager knows all the available alternatives and their outcomesIdeal for managerial decisionmakingProbabilities0 unknowns6What is decisionmaking under conditions of riskDecisions under risk are most commonAlternatives are known but outcomes are in doubtProbabilities10 unknowns7What is decisionmaking under conditions of uncertaintyKnow nothing OR Just know the alternativesProbabilities1 unknowns8Which decisionmaking condition is most common Least common Most difficultMost CommonRisk Least CommonCertaintyMost DifficultUncertainty 9What is the key to making good decisions under riskDetermining the accurate probabilities associated with each alternative10How do programmednonprogrammed decisions and the different decisionmaking conditions relateCertaintyeasiest to programUncertaintymostly likely nonprogrammedRiskcan be both can program how much risk you want to takeEx auto insuranceprogrammed risk mgt11What does the traditional economic model assume about decisionmakers2 assumptionsManagers seek to maximize benefits or minimize costs Managers are completely rationalCompletely rational and maximize will select best solution every timeWhat we should doprescriptive model12Under what decisionmaking condition do decisions get made in the traditional economic modelCertainty 13What does the behavioral model assume about decisionmakers2Bounded rationalityemotional dont know everythingSatisficingpicking an alternative everyone can live withDescriptive model how you actually make decisionsPretty good decision with less timeeffortmore efficient14What is bounded rationalityWhat three things bound ones rationalityBounded rationalityhow much you can keep in your mind is limitedWe dont know everythingWere emotionalThe future is hard to predict15What is satisficingHow does it differ from maximizingIs it irrationalstSatisficingselecting the 1 alternative that meets a minimally acceptable standard rather than going through and evaluating all alternatives and selecting the best oneIts rational behavior given our limits its the best way to make decisionMental shortcutheuristicLess effort more efficient 16What is a heuristicWhat are the advantages of and disadvantages of heuristicsHeuristica mental short cut a labor saving deviceManagers use heuristics because of their limited information processing capabilities they help us cope with complex environments by simplifying themEx past performance best prediction of future performanceAdvantagestime savingsproduce more good decisions than bad decisionsDisadvantages can lead to faulty conclusions when they lead to errors in judgmentcalled biases Best defense against biaseslearn what they are try to see multiple view points17What is the availability heuristicWhat factors cause you to overestimate the frequency of an eventUnderestimate the frequency of an eventAvailability heuristicif something is easily recalled it is frequentOverestimate frequencyVividEmotionalSpecificRecentEasily imaginedBroadcastedUnderestimate frequencyAnything that causes you to overestimate18What is the representativeness heuristicWhats the problem with this heuristicRepresentativeness heuristicuse stereotypes about the likelihood of an occurrenceProblem cause you to miss opportunities Can lead to prejudice and discrimination based on nonjob related factors such as sex age race and religion19Under what decisionmaking conditions do decisions get made in the behavioral modelRisk or uncertainty 20What does the irrationalimplicit favorite model of decisionmaking say about decisionmakingDecision maker selects a favorite but keep it to themselvesnever gives other alternatives a real shotThis model assumes that the decision maker simply goes through the motions of generating and evaluating more alternatives as a way to justify their initial choiceor favorite NOTE this is irrational behavior and its also a waste of time and money because a decision has already been madeMost likely to make an irrational decision under uncertainty bc you dont have a lot of info to goo onDescriptive models behavioral and irrational models21What types of decisions are made irrationally
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