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Models of, Decision Making, Ali Maskur
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Goals, Compare, , Compare the rational models of decision making, simon’s normative model, and garbage can model, , Identify, , Identify common decision-making biases, , Discuss, , Discuss knowledge management techniques used by organization to increase knowledge sharing, , Describe, , Describe the model of decision-making styles, the role of intuition in decision-making and the stages of the, creative process., , Contrast, , Contrast brainstorming, the nominal group technique, the Delphi technique, and computer-aided decision, making
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The Rational Model, • The Rational Model, • in this model, managers are rational and completely inform decision, makers (economic man)., • It is influenced by classical economic theory, • When using this model, it is assumed that managers:, • Know of all possible alternatives, • Know the consequences of implementing each alternatives, • Have a well-organized set of preferences for these consequences, • Have the computational ability to compare consequences and, determine which is preferred
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Step in Rational, Decision Making, • Simon’s Model, • Intelligence: finding occasions, for making a decision., • Design: inventing, developing,, and analyzing possible courses, of action, • Choice: selecting a particular, course of action from those, available, • Review: assessing past choices
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Methods for, Identifying, Problems, , • Assumes the recent past is the best, estimate of the future, • Use projections and scenarios, • Rely on the perceptions of others
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Selecting alternative solutions, •, •, •, •, •, •, •, , Want to maximize the expected utility an outcome, People vary in their preferences for safety or risk, Ethics should be considered, Evaluating alternatives assume they can be judged according to criteria, Assumes valid criteria exists, Each alternative can be compared to these criteria, Decision making actually uses the criteria
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Implementing and evaluating the, solution, After the solution is, implemented, the, evaluation phase is, used to evaluate its, effectiveness, , Optimizing – choosing, the best possible, solution
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Question?, , Farida is never happy with, “good enough” solution. She is, determined to find the “best, possible solution” in solving, her problem. What Farida, doing is described as…., • Optimizing, • Brainstorming, • Rationalizing, • Satisfying
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Non-rational Models of Decision Making, It is a model that explain how decisions are actually made, This model is usually called “Bounded Rationality Model”, It is characterized as:, •, •, •, •, •, , The rational manager does not always have complete information, Every single manager has different ability and knowledge, The rational manager usually faces limited time of decision-making process, Decision making is uncertainty, Difficult for managers to make optimal decisions
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Bounded Rationality Model, , Bounded rationality is, characterised by the activities, of “searching” and, “satisficing”, , Satisficing is process oriented, admitting that the rational, manager does not always, have complete information,, and that optimal choices are, not always required
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Simon’s Normative, Model, • Most frequent causes of poor, decision making:, • Poorly defined processes and, practices, • Unclear company vision,, mission, and goals, • Unwillingness of leaders to, take responsibility, • Lack of reliable. Timely, information
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Garbage, Can, Model, , • Garbage Can Model, • decision making is sloppy and, haphazard, • decisions result from complex, interaction of four streams of, events: problems, solutions,, participants and choice, opportunities, , 10-13
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Implications, of the, Garbage Can, Model, , 1. Many decisions are made by, oversight, 2. Political motives frequently, influence decision makers, 3. Decision making process is, difficult to load, 4. Important decisions are more, likely to be solved, , 10-14
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Dynamics of Decision Making, • Knowledge management, • implementing systems and practices that increase the sharing of knowledge, and information throughout an organization, , Read an, article on, Knowledge, Management, 10-15
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Tacit knowledge, , Knowledge, Management, , • information gained through, experience that is difficult to, express and formalize., , Explicit knowledge, • information that can be, easily put into words and, shared with others., , 10-16
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Question?, , Nurdin has been a top salesman for 20+ years., He has developed a reputation as one who, can close a deal, but has been unable to, teach new trainees how to be as successful., This is called ________ knowledge., A. Implicit, B. Explicit, C. Tacit, D. Unstated, , 10-17
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Value orientation, , General, Decision, Making, Styles, , • reflects the extent to which an, individual focuses on either task and, technical concerns or people and, social concerns when making, decisions, Tolerance for ambiguity, • extent to which a person has a high, need for structure or control in his, life, 10-18
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Decision, Making, Styles, , 10-19
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Intuition in Decision, Making, • Intuition, • a capacity for attaining, direct knowledge without, the apparent intrusion of, rational thought or, logical interference, , 1020
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A Model of Intuition, • Holistic hunch, • judgment that is based on a, subconscious integration of, information stored in memory, • Automated experiences, • choice based on a familiar, situation and a partially, subconscious application of, previously learned, information related to that, situation, 1021
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A Model of, Intuition, , Figure 10-2, 10-22
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Creativity, , • Creativity, • process of using intelligence,, imagination, and skill to develop a new, or novel product, object, process, or, thought, , 1023
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Question?, , Dominick has a low tolerance for ambiguity, and is generally oriented towards task and, technical concerns when making decisions., Dominick can be described as having which, decision-making style?, • Directive, • Analytical, • Conceptual, • Behavioral, , 1024
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Group, Involvement, • Minority dissent, • extent to which group members, feel comfortable disagreeing, with other group members,, and a group’s level, of participation in, decision making, , 1025
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Advantages and, Disadvantages of, Group-Aided, Decision Making, , 10-26
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Question?, , Jeanie has many good ideas for her work, group, but is unwilling to bring them up, for group consideration. She is more, concerned about conforming to group, norms and not “rocking the boat”. This, is due to ___________., A. Different perspectives, B. Social pressure, C. Groupthink, D. Increased acceptance, , 1027
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Group Problem Solving Techniques, , Consensus, , Brainstorming, , presenting opinions and gaining agreement to, support a decision, , process to generate a quantity of ideas, , 10-28
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Defer judgment, , Build on the ideas of others, , Rules for, Brainstorming, , Encourage wild ideas, , Go for quantity over quality, , Be visual, , Stay focused on the topic, , One conversation at a time, , 10-29
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Group Problem Solving, Techniques, • Nominal Group Technique, • process to generate ideas and, evaluate solutions., • Delphi technique, • process to generate ideas from, physically dispersed experts, , 10-30
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Question?, , Dana has project employees working in New, York, South Carolina, Texas, and California., She wants to get them together as a group, to discuss ways to improve the work, process. She will probably use, ___________., A. Delphi technique, B. Nominal group technique, C. Garbage can technique, D. Ostensible group technique, , 1031
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Group Problem Solving, Techniques, • Computer-aided decision, making, • reduces consensus, roadblocks while collecting, more information in a, shorter period of time, , 10-32
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Chauffeur-driven systems, , Computer-aided, Decision, Making, , 10-33, , • ask participants to answer, predetermined questions on, electronic keypads, Group-driven meetings, • conducted in special facilities, equipped with individual, workstations that are networked to, each other
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Garbage Can Model of Organizational, Decision-Making, A, Problems, Problems, Solutions, Participants, , Solutions, Participants, Choice, opportunities, , Choice, opportunities, Problems, Solutions, B, , Participants, Choice opportunities, 10-34
