Managerial Decision Making
Decision making - answersis the process of making a choice or selecting a course of
action to address a specific problem.
Elements of Decision Making - answers1. Choosing how to deal with an unwelcome or
harmful situation
2. Making choices about how to capitalize on an opportunity
3. Learning to be systematic and objective
4. Realizing there is often more than one possible solution to a problem
5. Realizing that the best decision is not always simple or obviou
Individual Decision Making - answersIn individual decision making, one person is solely
responsible for interpreting the problem, gathering information, considering alternatives,
and making a choice.Individual decision making focuses on one person's ability to
process information and make judgments and decisions.
Team Decision Making - answersIn team decision making, team members make
individual judgments that feed into team decisions. Team decisions usually involve an
interaction and exchange of ideas and information among members.
Team decision making requires teams to use individuals' judgments to reach a decision.
Three metrics used to judge the effectiveness of a decision - answers1. Accuracy
2. Consensus
3. Acceptability
Accuracy - answersThe degree of correspondence between a decision and the correct
decision.
Evaluating for Effectiveness
1. Relevant in situations where an appropriate decision can be derived from
combinations of specific pieces of information relevant to the decision
2. Degree of correspondence sometimes known after the fact
Consensus - answersThe degree to which members of a team generally agree with the
team's choice.
Evaluating for Effectiveness
1. Might not be the absolute first choice of each and every member
2. Should be a choice that members can all agree with
Acceptability - answersThe degree to which a decision is likely to meet an overall
objective or goal.
Evaluating for Effectiveness
1. Appropriate when it is not crucial that an optimal solution is reached
, 2. Good enough to allow the team to achieve its goals
Satisficing - answersis a strategy in which a decision maker accepts an available option
as satisfactory
Decision-Making Accuracy - answersPhysicians consider patient symptoms and other
information to make diagnoses and recommend treatment.
A good decision by a physician means that the patient would receive the appropriate
course of treatment and could heal.
A poor decision by a physician means the patient would receive an inappropriate course
of action and would not heal—and might even get worse or die.
Decision-Making Consensus - answersA panel receives various proposals from
architects for an addition to a factory.
The panel studies the proposals, using guidelines provided by the CEO to make a
decision.
Although the members of the panel have their own preferences, they share their
perspectives, work through the differences, and agree on a proposal that all of them can
support.
Decision-Making Acceptability - answersSheila is asked to assemble a team of six
accountants to travel to Singapore to conduct a year-end audit for a client.
She pulls up a spreadsheet with the qualifications, work experiences, and backgrounds
of her 40 coworkers. But this is too much information to sort through.
As a result, Sheila selects employees who are available and work well with others. This
might not be the absolute best team, but it is good enough to complete the audit.
Effectiveness of Decision Making Accuracy - answersThe degree of correspondence
between a decision and the correct decision
Evaluating for Effectiveness
1. Relevant in situations where an appropriate decision can be derived from
combinations of specific pieces of information relevant to the decision
2. Degree of correspondence sometimes known after the fact
Effectiveness of Decision Making Consensus - answersThe degree to which members
of a team generally agree with the team's choice
Evaluating for Effectiveness
1. Might not be the absolute first choice of each and every member
2. Should be a choice that members can all agree with
Effectiveness of Decision Making Acceptability - answersThe degree to which a
decision is likely to meet an overall objective or goal.
Evaluating for Effectiveness
1. Appropriate when it is not crucial that an optimal solution is reached
2. Good enough to allow the team to achieve its goals
Decision making - answersis the process of making a choice or selecting a course of
action to address a specific problem.
Elements of Decision Making - answers1. Choosing how to deal with an unwelcome or
harmful situation
2. Making choices about how to capitalize on an opportunity
3. Learning to be systematic and objective
4. Realizing there is often more than one possible solution to a problem
5. Realizing that the best decision is not always simple or obviou
Individual Decision Making - answersIn individual decision making, one person is solely
responsible for interpreting the problem, gathering information, considering alternatives,
and making a choice.Individual decision making focuses on one person's ability to
process information and make judgments and decisions.
Team Decision Making - answersIn team decision making, team members make
individual judgments that feed into team decisions. Team decisions usually involve an
interaction and exchange of ideas and information among members.
Team decision making requires teams to use individuals' judgments to reach a decision.
Three metrics used to judge the effectiveness of a decision - answers1. Accuracy
2. Consensus
3. Acceptability
Accuracy - answersThe degree of correspondence between a decision and the correct
decision.
Evaluating for Effectiveness
1. Relevant in situations where an appropriate decision can be derived from
combinations of specific pieces of information relevant to the decision
2. Degree of correspondence sometimes known after the fact
Consensus - answersThe degree to which members of a team generally agree with the
team's choice.
Evaluating for Effectiveness
1. Might not be the absolute first choice of each and every member
2. Should be a choice that members can all agree with
Acceptability - answersThe degree to which a decision is likely to meet an overall
objective or goal.
Evaluating for Effectiveness
1. Appropriate when it is not crucial that an optimal solution is reached
, 2. Good enough to allow the team to achieve its goals
Satisficing - answersis a strategy in which a decision maker accepts an available option
as satisfactory
Decision-Making Accuracy - answersPhysicians consider patient symptoms and other
information to make diagnoses and recommend treatment.
A good decision by a physician means that the patient would receive the appropriate
course of treatment and could heal.
A poor decision by a physician means the patient would receive an inappropriate course
of action and would not heal—and might even get worse or die.
Decision-Making Consensus - answersA panel receives various proposals from
architects for an addition to a factory.
The panel studies the proposals, using guidelines provided by the CEO to make a
decision.
Although the members of the panel have their own preferences, they share their
perspectives, work through the differences, and agree on a proposal that all of them can
support.
Decision-Making Acceptability - answersSheila is asked to assemble a team of six
accountants to travel to Singapore to conduct a year-end audit for a client.
She pulls up a spreadsheet with the qualifications, work experiences, and backgrounds
of her 40 coworkers. But this is too much information to sort through.
As a result, Sheila selects employees who are available and work well with others. This
might not be the absolute best team, but it is good enough to complete the audit.
Effectiveness of Decision Making Accuracy - answersThe degree of correspondence
between a decision and the correct decision
Evaluating for Effectiveness
1. Relevant in situations where an appropriate decision can be derived from
combinations of specific pieces of information relevant to the decision
2. Degree of correspondence sometimes known after the fact
Effectiveness of Decision Making Consensus - answersThe degree to which members
of a team generally agree with the team's choice
Evaluating for Effectiveness
1. Might not be the absolute first choice of each and every member
2. Should be a choice that members can all agree with
Effectiveness of Decision Making Acceptability - answersThe degree to which a
decision is likely to meet an overall objective or goal.
Evaluating for Effectiveness
1. Appropriate when it is not crucial that an optimal solution is reached
2. Good enough to allow the team to achieve its goals
