Learning Objectives
LO.1 Compare and contrast the rational model of decision making, Simon’s normative model, and the garbage can model.
LO.2 Discuss eight decision-making biases.
LO.3 Discuss the thrust of evidence-based decision making and its implementation principles.
LO.4 Explain the model of decision-making styles.
LO.5 Explain the model of intuition and the ethical decision tree.
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Individual and GroupDecision MakingChapter TwelveLearning ObjectivesLO.1 Compare and contrast the rational model of decision making, Simon’s normative model, and the garbage can model.LO.2 Discuss eight decision-making biases.LO.3 Discuss the thrust of evidence-based decision making and its implementation principles.LO.4 Explain the model of decision-making styles.LO.5 Explain the model of intuition and the ethical decision tree.Learning Objectives (cont.)LO.6 Summarize the pros and cons of involving groups in the decision-making process.LO.7 Contrast brainstorming, the nominal group technique, the Delphi technique, and computer-aided decision making.LO.8 Describe the stages of the creative process.LO.9 Discuss the practical recommendations for increasing creativity.Models of Decision MakingDecision makingidentifying and choosing alternative solutions that lead to a desired state of affairsModels of Decision MakingThe Rational Model proposes that managers use a rational four-step approach to decision making.Nonrational Models of Decision MakingNonrational models Attempt to explain how decisions are actually madeDecision making is uncertainDecision makers do not possess complete informationDifficult for managers to make optimal decisionsSimon’s Normative ModelBounded rationality represents the notion that decision makers are “bounded” or restricted by a variety of constraints when making decisionsSatisficing choosing a solution that meets some minimum qualifications, one that is “good enough”.Garbage Can ModelGarbage Can Model decision making is sloppy and haphazarddecisions result from complex interaction of four independent streams of events: problems, solutions, participants and choice opportunitiesDecision-Making BiasesJudgmental heuristics rules of thumb or shortcuts that people use to reduce information processing demands.Evidence-Based Decision MakingEvidence-based decision making (EBDM) represents a process of conscientiously using the best available data and evidence when making managerial decisionsA Model of Evidence-BasedDecision Making (EBDM)General Decision-Making StylesValue orientation reflects the extent to which an individual focuses on either task and technical concerns or people and social concerns when making decisionsTolerance for ambiguity extent to which a person has a high need for structure or control in his lifeDecision-Making StylesA Model of IntuitionAn Ethical Decision Tree