Fund of Management Test 3

• Decision - A choice made from among available alternatives
• Decision making - The process of identifying and choosing alternative courses of ­action
• Rational model of decision making - Also called the classical model; the style of decision making that explains how managers should make decisions; it assumes that managers will make logical decisions that are the optimal means of furthering the organization’s best interests
• Nonrational models of decision making - Models of decision-making style that explain how managers make decisions; they assume that decision making is nearly always uncertain and risky, making it difficult for managers to make optimum
• Four Stages of Rational Decision Making

  Identify the Problem

  Think of Alternative Solutions

  Evaluate Alternatives & Select a Solution

  Implement & Evaluate the Solution Chosen
• Problems - Difficulties that inhibit the achievement of goals
• Opportunities - Situations that present possibilities for exceeding existing goals
• Diagnosis - Analyzing the underlying causes
• Evaluate alternatives & select a solution:

  Is it ethical?

  Is it Feasible

  Is it ultimately effective
• Bounded rationality - One type of nonrational decision making; the ability of decision makers to be rational is limited by numerous constraints
• Satisficing model - One type of nonrational decision-making model; managers seek alternatives until they find one that is satisfactory, not optimal
• Characteristics of group decision making

  • They are less efficient 
  • Their size affects decision quality
  • They may be too efficient 
  • Knowledge counts
• Groupthink - Agreeing for the sake of unanimity and thus avoid accurately assessing the decision situation
• Consensus - General agreement; group solidarity
• Post-Mortem - review of recent decisions to identify possible
• Group Problem Solving Techniques:

  Brainstorming

  Devil's Advocacy

  The Dialectic Method

  Project post-mortem
• Brainstorming - Technique used to help groups generate multiple ideas and alternatives for solving problems; individuals in a group meet and review a problem to be solved, then silently generate ideas, which are collected and later analyzed
• Electronic brainstorming - Technique in which members of a group come together over a computer network to generate ideas and alternatives
• Project post-mortem -A review of recent decisions in order to identify possible future improvements
• Big Five personality dimensions:

  Extroversion

  Agreeableness

  Conscientiousness

  Emotional Stability

  Openness to Experience
• Extroversion - how outgoing, talkative, sociable, and assertive a person is
• Agreeableness - how trusting, good-natured, cooperative, and soft-hearted a person is
• Conscientiousness - how dependable, responsible, achievement oriented, and persistent a person is
• Emotional Stability - how relaxed, secure, and unworried a person is
• Openness to experience - How intellectual, imaginative, curious, and broad-minded someone is
• Self-efficacy - Belief in one’s personal ability to do a task
• Generalized self-efficacy - Represents the belief in one’s general ability to perform across different situations
• Learned helplessness - The debilitating lack of faith in your ability to control your environment
• Self-esteem - Self-respect; the extent to which people like or dislike themselves
• Locus of control - Measure of how much people believe they control their fate through their own efforts
• Emotional stability - Is the extent to which people feel secure and unworried and how likely they are to experience negative emotions under pressure
• Emotional intelligence - The ability to cope, to empathize with others, and to be self-motivated
• Communication - The transfer of information and understanding from one person to another
• Sender - The person wanting to share information
• Receiver - The person wanting to receive information
• Encoding - Translating a message into understandable symbols or language
• Decoding - Interpreting and trying to make sense of a message
• Medium - The pathway by which a message travels
• Formal communication channels  - Communications that follow the chain of command and are recognized as official
• Types of Formal Communication Channels:

  Vertical Communication

  Horizontal Communication

  External Communication