Textbook Notes - Chapter 11

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Department
Management (MGH)
Course
MGHD27H3
Professor
Joanna Heathcote
Semester
Summer

Description
MGTB27 01 Week 10 Chapter 11 Decision Making (pg. 357 383) - The economic downturn in 2008 2009 is a result of decisions supported by President Clinton and Bush about making purchasing more affordable and making it more as a right rather than a privilege - Result, people took out large sums of loans that they are not able to afford or pay off What is Decision Making? - Decision making is the process of developing a commitment to some course of action - Three factors to consider: o Choice involves making a choice among several action alternatives o ProcessHow the process and how a decision is made o Resources committing resources such as time, money, or personnel in decision - Decision making can also be seen as a process of problem solving - Problem is a perceived gap between an existing state and a desired state - Decision-making process involves the perception of the existing state, the conception of the desired state, and the steps needed to move from one state to the other Well-Structured Problems - A well-structured problem is when the existing state is clear, the desired state is clear, and how to get from one state to the other is fairly obvious (problems are repetitivefamiliar) o J 4:7L07ZKL.K0OL;0774:908K4:O,:80 - Organizations would like to program (a standardized way of solving a problem) decision to make it a well-structured problem since decision making takes time & is prone to error - Programs can go under: rules, routines, standard operating procedures, or rules of thumb o E.g. loan application at bank: takes into account income, debt, previous credit and so 43L3470794,88088L1,5078438,55OL.,9L43.,3-08039147,5574;,O47349 - Programs are only as good as the decision-making process that led to the adoption of the program in the first place (programs may help solve a particular problem but will not guarantee success on other problems) Ill-Structured Problems - A ill-structured problem is when the existing and desired states are unclear and the method of getting to the desired state are unknown (even when clarified) - These problems are generally unique, unusual and have not been encountered before - Involves high degree of uncertainty, tend to be complex, and entail high risk o J $K4:OZ0L25O02039,7L8N,99025994708.:054OL9L.,OK489,J08 - Ill-structured problems cannot be solved with programmed decisions but rather un- programmed decision making (collecting more information and being more self-consciously analytical in their approach) The Compleat Decision Maker A Rational Decision-Making Model - The decision making process: o Identify problem, search for relevant information, develop alternative solutions to the problem, evaluate alternative solutions, choose best solution, implement chosen solution, and monitor and evaluate chosen solution - If difficulties occur at any point in the process, repetition or recycling may be affected www.notesolution.com
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