MGT: Report 1

• Decision making


  The process of choosing the best option from multiple alternatives to achieve a goal
• Decision making


  • Involves evaluating available options, considering relevant information and factors, and selecting the option that aligns with objectives
  • Is a process, not just a simple act of choosing among alternatives
  • Is a fundamental aspect of management and is essential for individuals and organizations to address challenges, seize opportunities, and navigate uncertainties
• Decision


  A choice made between two or multiple choices
• Problem


  An obstacle that makes it difficult to achieve a desired goal or purpose
• 8 Steps to Decision Making

  1. Identifying A Problem

  2. Identifying Decision Criteria

  3. Allocating Weights to the Criteria

  4. Developing Alternatives

  5. Analyzing Alternatives

  6. Selecting an Alternative

  7. Implementing an alternative

  8. Evaluating Decision Effectiveness
• Managers as decision-makers


  • Making decisions is especially significant to managers
  • Managers are referred to as decision-makers when they organize, lead, coordinate, and supervise
• How managers make decisions

  • Rationality
  • Bounded rationality
  • Intuition
  • Evidence-based management
  • Crowdsourcing
• Rationality


  Describes choices that are logical and consistent and maximize value
• Bounded rationality


  Decision making that's rational, but limited by an individual's ability to process information
• Intuition


  The process of selecting choices based on feelings, experience, and collected knowledge
• Evidence-based management


  Systematic use of the best available evidence to improve management practice
• Crowdsourcing


  Using the Internet, social media, and smartphone apps to access individuals with diverse abilities and perspectives from around the globe while saving time and money
• Structured and programmed decisions

  • Procedure
  • Rule
  • Policy
• Procedure


  A set of sequential actions that a manager takes in order to address an organized issue
• Rule


  A straightforward order that informs a manager of what is acceptable and unacceptable
• Policy


  A set of guidelines used to make decisions
• Unstructured and nonprogrammed decisions


  Uncommon problems with insufficient or unclear information, requiring original solutions
• Decision making styles


  • Linear
  • Nonlinear
• Linear style


  The ability to use information from outside sources, such as data and statistics, and to process this knowledge using logic and deductive reasoning to support decisions
• Nonlinear style


  The ability to use internal sources (feelings and intuition) and the interpretation of this data to inform choices and actions using internal knowledge, feelings, and hunches
• Decision-making biases and errors

  • Overconfidence bias
  • Gratification bias
  • Anchoring effect
  • Selective-perception bias
  • Confirmation bias
  • Framing bias
  • Availability bias
  • Representation bias
  • Randomness bias
  • Sunk costs error
  • Self serving bias
  • Hindsight bias
• Overconfidence bias


  When those in charge have a tendency to believe they know more than they actually do or to have exaggeratedly high expectations for their own abilities and performance
• Gratification bias


  Decision-makers with a tendency to seek out immediate benefits
• Anchoring effect


  How decision makers fixate on initial information as a starting point and then, once set, fail to adequately adjust for subsequent (following) information
• Selective-perception bias


  When people in positions of authority arrange and interpret events in a biased way because of their preconceived notions
• Confirmation bias


  Individuals who make decisions by looking for data to support their prior decisions and ignoring data that challenges such decisions
• Framing bias


  When those making decisions pick out and emphasize some parts of a scenario while leaving out others
• Availability bias


  Occurs when people who make decisions have a tendency to recall the most recent events from their memories
• Representation bias


  When decision-makers evaluate an event's likelihood by comparing it to other events or groups of similar occurrences
• Randomness bias


  The acts of those who attempt to give meaning to seemingly random occurrences
• Sunk costs error


  When people making decisions fail to realize that decisions made in the past cannot be undone
• Self serving bias


  Decision-makers who are eager to claim credit for their accomplishments and blame failure on uncontrollable circumstances
• Hindsight bias


  It is common for decision-makers to think, after the fact, that they were able to correctly forecast how an event would turn out
• Cutting Edge Approach


  The most recent and innovative in a field with many applications
• Design Thinking


  • A user-centric, solution-based approach to problem solving that can be described in four stages: Clarify, Ideate, Develop, Implement
• Big Data AI


  Artificial intelligence and data are coming together to form a mutually beneficial relationship in which data is needed for AI to function and vice versa
• Benefits of Big Data AI

  • Enhanced Productivity
  • Improved Decision Making
  • Fairness and bias
• Informal planning


  Getting together to talk about short-term objectives that staff members can strive for over the next few weeks
• Formal planning


  The management group debating and formulating precise short- and long-term objectives that staff members can regularly strive for
• Planning


  Involves defining the organization's goals, establishing strategies for achieving those goals, and developing plans to integrate and coordinate work activity