MGT 411 Exam #2

Making choices from among two or more alternatives

1. Define the problem
2. Identify decision Criteria
3. Weight the Criteria
4. Generate alternatives
5. Rate each alternative on each criterion
6. Compute the optimal decision

1. Problem clarity
2. Known options
3. Clear preferences
4. Constant preferences
5. No time or cost constraints
6. Maximum payoffs

Perceptions affect awareness of problems
Perceptions affect analysis of problem
Perceptions affect interpretations of data
Perceptions affect judgments of potential outcomes (example community college)

Due to the limited capacity of the mind to be fully rational; decision makers construct simplified models to extract the essential features from complex. (amount of knowledge

-Limited list of criteria based on most conspicuous choices
-Final solution represents a satisficing choice, not an optimum one
-Satisficing first acceptable choice

-Simplifying strategies or “rules of thumb” used to make decisions
-Makes it easier to deal with uncertainty and limited information
-Can lead to systematic errors that affect the quality and/or ethics of decisions

Bases a decision on recent events relating to the situation at hand

Bases a decision on similarities between the situation at hand and sterotypes of similar occurrences

Bases a decision on incremental adjustments to an intial value determined by historical precedent or some reference point

Overconfidence, Anchoring, Confirmation, Availability, Escalation of Commitment, Randomness error

Group:
More Effective
More information and knowedge
diversity of views (takes longer)

Tendency of members to lose critical evaluative capabilities
Occurs within cohesive group
"I don't want to rock the boat"

-Group members reationalize any resistance to their assumptions.
- Members presure any doubters to support the alternatives favored by the majority
- Doubters keep silent about misgivings and minimize their importance

-Group members reationalize any resistance to their assumptions.
- Members presure any doubters to support the alternatives favored by the majority
- Doubters keep silent about misgivings and minimize their importance