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Module 2
Decision Making
50
Management
Undergraduate 2
02/02/2016

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Term
Decision Making
Definition
The process of selecting one of several possible alternatives.
Term
Problem Solving
Definition
Changing a currently unsatisfactory situation into a satisfactory one

May involve making more than one decision.
Term
What does it mean to say decision making and problem solving are two dimensional processes?
Definition
Refers to fact that they involve gathering information and then manipulating that info.
Term
What are the two general types of problems one can face?
Definition
1) Logical or Structured problems
2) Elusive or Unstructured problems
Term
Logical/Structured Problem
Definition
-clearly identified w/ logical structure.
-solution found by following a set route
i.e. candidate selection - develop hiring criteria, evaluate
applicants, choose best
Term
Elusive/Unstructured Problem
Definition
-difficult to define problem
-solution is not apparent
-cannot be solved by route logic
i.e. party failure during election, polls inconclusive
Term
What are the 8 steps in the Rational Decision Making Model?
Definition
1. Identify the Problem
2. Identify Decision Criteria
3. Allocate Weights to the Criteria
4. Develop Alternatives
5. Evaluate Alternatives
6. Select an Alternative
7. Implement the Alternative
8. Monitor and Evaluate the Decision’s Overall Effectiveness
Term
What are the three broad steps involved in 'identifying the problem'?
Definition
1) Identify the route of the issue - not the symptoms
i.e. wrkrs making errors ringing in items --> symptom
wrkrs not trained properly on till --->PROBLEM

2) Identify and Classify the issue
i.e. urgency? reactive? anticipatory?

3) Identify objective solution must satisfy - OUTCOME
i.e. workers accurately ringing in items, less shrinkage
Term
Explain what 'identifying decision criteria' means
Definition
It means isolating what factors (criteria) are important to the decision at hand. It is more about what the solution needs than further understanding the problem
i.e. cashiers able to accurately ring in items
Term
Explain 'allocating weights to criteria'
Definition
When you have multiple decision criteria, you need to establish what is most important, what weighs more
i.e. having employees understand barcode system is less important than them being able to key info correctly

*one criterion could be set as the deciding factor when all other criteria are equally met.
i.e. candidate selection - if everyone is awesome, one with additional merchandizing experience would win
Term
Explain 'developing alternatives'
Definition
Fleshing out the ways in which a problem can be handled
i.e. cashiers can be trained one on one, or in a group, or given work to complete in spare time, or can go through modules on computer
Term
Explain 'evaluating alternatives'
Definition
Judge alternatives by how much they satisfy selection criteria

Involves looks at:
• Risk
• Timing
• Economy
• Resources
• Implementation
• Contribution to objectives
Term
Select an Alternative
Definition
Choose an alternative
-easy if other steps have been thorough and smooth
-if two options equally good, look for tie-breakers
Term
Implement Alternative (chosen solution)
Definition
implementation may involve other people and their cooperation and commitment.

entails effective communication, coordination and monitoring.
Term
Monitor and Evaluate the Decision’s Overall Effectiveness
Definition
Checking up on how things are going
-problem resolved?
-what was done well?
-what wasn't?
-what could be done better/differently?
-modifications?
-lessons for the future?

*If problem persists, or other problems arise as a result of solution, then back to the drawing board
Term
What were the changes health Canada made to decision-making framework regarding blood supply issue?
Definition
1) Broadened information base for decision making
-issues like culture, gender, etc. w/ potential impact
2) Broadened transparency
- info used - decisions made - uncertainties - involve interested/affected parties - processes - uncertainties
3) Allowed for more flexibility to address range of risk issues
4) Clarified roles, responsibilities, accountabilities of participants.
5) Involve interested/affected parties and give them enough info to meaningfully participate in process
Term
What is the take home regarding the changes seen recently to the decision making framework?
Definition
Learning how to support the involvement of all people impacted by:
-gender -culture -other factors

The result is better outcomes for organizations in supporting inclusion.
Term
2 types of decisions?
Definition
1) Programmed
2) Non-programmed
Term
Programmed Decision?

What 3 tools support these types of decisions?
Definition
Programmed decisions are reserved for routine, reoccurring and logical problems.

1) Policies are expressions of intent or overall guidelines and they may be written or unwritten
2) Procedures are outlined series of steps used to arrive at a desirable outcome
3) Rules are concise statements of what should or should not be done
Term
How do the tools of policies, procedures, and rules support programmed decisions?
Definition
assist in routine or reoccurring decisions by:
1) speeding up
2) simplifying and
3) sometimes, replacing the decision-making process.
Term
Non-programmed Decisions?
Definition
Decisions requiring novel, specific decisions.
needed when problem is elusive, unusual, complicated
Term
What types of decisions are usually made in the upper ranks of an organization? lower ranks?
Definition
Upper ranks - non-programmed decision more common
Lower ranks - programmed
Term
How does personality factor into the decision making process?
Definition
1) May impact how he or she approaches a problem
2) Reveal how individuals approach decision making differently.
Term
What 2 dimensions of the myers briggs test are most relevant to how personality shapes decision making?
Definition
Sensor vs. Intuitor - degree to which prefer hard data or intuition

Thinker vs Feeler - degree to which prefer logic over emotional reasoning
Term
What are the three models of decision making?
Definition
1) Optimizing - idealistic presentation of rational and logical decision making at its best

2) Satisficing - when the first or most obvious alternative is selected instead of the best solution.

3) Implicit favourite - preselect a favourite alternative; then set out to confirm your choice
Term
Decision Tree Theory
Definition
A theory athat intended to (1) deal w/ uncertainty of non-programmed decision making by (2) attaching a quantitative value to each potential alternative
Term
Explain how to use decision tree theory
Definition
1) multiply the percentage of chance by the expected benefit and loss
2) take the difference between the two
3) if +, then worthwhile, if - reconsider
Term
Problem with decision tree theory?
Definition
The recommendations can be flawed if inputs are off
Term
Autocratic management
Definition
When managers make only small day to day decisions. All others are made higher up
Term
Democratic/Paticipatory Management
Definition
When employees are involved in the decision making process.
Term
When should you use group decision making?
Definition
When there is:
-ample time
-involves unstructured/elusive problem
-decision is non-programmed
-you lack ability, expertise, resources to do it alone
-when others have more of all of these
-you lack the authority to do it alone
-problem is important; wide consultation important
-decision majorly affects others
Term
When should decisions be made individually?
Definition
When there are:
-time constraints
-structured logical problem with programmed decision/systematic
-you have required ability, expertise, resources
-you have the required resources
-it is strictly your responsibility
-it is confidential
-problem unimportant
-does not majorly affect others
Term
Advantages of group decision making
Definition
• Collective brain power
• Increased acceptance of solution
• Increased legitimacy
Term
Disadvantages to group decision making
Definition
• Time-consuming
• Perception of abdication of responsibility or incompetence
• Minority domination
• Shared (reduced) responsibility
• Groupthink
Term
Groupthink
Definition
Groupthink is the tendency of a highly cohesive group to lose their critical evaluative abilities and, as a result, to suppress disagreement and arrive at the wrong decisions
Term
What are the signs of groupthink?
Definition
1) Mind-guarding
2) Illusion of invulnerability
3) Illusion of unanimity
4) Active suppression of dissidents
5) Invoking a common enemy and stereotyping
6) Group leader bias is clearly communicated
7) Belief in inherent group morality
8) Self-censorship by members
Term
Overcoming Groupthink
Definition
• Anonymity - make members critical evaluators w/ anonymously submitted written critiques
• Hold your tongue - leaders should abstain from expressing biases
•Divisions - split the group up into subgroups that, under different leaders, work on the same problem.
•Broad Feedback - have group members discuss issues with their staff and report back on their reactions.
•Outsiders - invite outside experts to observe group activities and react to group processes and decisions.
•Devil's Advocate - assign a contrarian
•Double-check - hold second-chance meetings after consensus has apparently been achieved.
Term
Brainstorming
Definition
Brainstorming is a group decision-making technique that allows a free exchange of ideas within a structured format.
Term
What is the typical brainstorming process?
Definition
1) Invite to the meeting all persons who can make a helpful contribution.
2) Create and maintain a positive environment.
3) Set clear objectives.
4) If the problem and the criteria are not yet clearly defined, encourage participation in defining.
5) Collect all ideas; do not evaluate them at this point—focus on volume of ideas. The facilitator may need to guard against evaluation at this stage.
6) Evaluate contributions and arrive at definition.
7) At this point, you may have to evaluate whether your participants have sufficient energy to continue with the problem-solving part of the session or whether you must reschedule that session.
8) Collect all alternative solutions from participants; do not evaluate at this point.
9) Evaluate solutions.
10) Select the best solution (or combination of solutions).
11) Thank your participants.
12) Implement solutions and evaluate results.
13) Give feedback to the participants.
Term
What is brainstorming most useful for?
Definition
Brainstorming is most suitable for solving unstructured or elusive problems when creative solutions may be appropriate.
Term
What is one area where brainstorming is an unlikely, but useful option?
Definition
Collective bargaining, when novel ways of dealing with long-standing problems may be sought.
Term
Problem Chain
Definition
Identification of one problem leads to a series of interconnected problems.
- cannot solve problem until you reach end of chain
Term
Problem Package
Definition
Several unrelated problems are conveniently grouped under a single label.
-deal with each problem separately.
Term
Constraints or a Closed-Mind

How can you deal with this?
Definition
When we make assumptions prior to problem solving as to what will or will not work.

Free your mind - every time you find yourself saying that something will not work, ask yourself, “How do I know, if I don’t try it first?”
Term
Dealing with the Symptoms, Not the Problem
Definition
The surface evidence masks the underlying problem.
*look at symptoms to uncover problem
Term
Vested Interests
Definition
It is in someone’s interest to keep the problem unsolved because the solution may mean a loss to him or her.
*uncover the vested interests and deal with them first.
Term
The Decision Maker Lacks All Information to Solve Problem
Definition
This may happen when the decision maker is unable or unwilling to access such information.
*group decision making may be the answer.
Term
What are the six 'problems to problem solving'?
Definition
1) Vested Interests
2) Dealing with the Symptoms, Not the Problem
3) Constraints or a Closed Mind
4) The Problem Package
5) The Problem Chain
6) Different Perceptions
Term
Different Perceptions
Definition
• Is there a problem at all?
• What is the problem?
• How important is the problem?
• What are the available alternatives?
• Evaluation of alternatives

Recognizing perceptual differences may help.
Term
What are 6 cautionary considerations for managers and minor decision making?
Definition
1.Several minor decisions form a pattern that characterizes the decision maker.
2. Staff and others may copy the decision-making style of a decision maker who is in a position of leadership.
3. Minor decisions made in a department that has to work closely with other departments are bound to affect the other departments.
4. Not making a decision may label you as indecisive or a “postponer”, or imply the problem itself as unimportant.
5. There may be perceptual differences over the impact of a particular decision.
6. What you consider a minor decision may have major impact on others.
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