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UGA MGMT 3000 - Rational Decision Making

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MGMT 3000 1st Edition Lecture 7Outline of Last Lecture I. Planning II. Benefits and pitfalls of planning III. Generic planning process IV. Planning within an organization a. Top level b. Middle level c. Bottom level Outline of Current Lecture I. Rational Decision making II. Limits to rational decision making III. Advantages/ disadvantages to group decision making IV. Structured conflicts V. Group decision making techniques Current Lecture Decision Making: process of choosing a solution from available alternativesRational decision-making: a systematic process of defining problems, evaluating alternatives, and choosing optimal solutions - Define problem: Where is the gap- Identify the criteria: Decision criteria is the standards used to guide judgments and decisions, more criteria a potential solution meets, the better that solution should be - Weigh the criteria: Access the different criteria’s and weigh them according to personal neSeds o Absolute comparisons: each criterion is compared to a standard or ranked no its own merits o Relative comparisons: each criterion is compared directly to each every other criterion These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- Generate alternative course of action: have as many alternatives as possible - Evaluate each alternative: Can be much longer and more expensive than other steps in the process - Compute the optimal decision: multiply the rating for each criterion b the weight for that criterion o Sum the scores for each alternative course of action. Limits to rational decision-making: - Limited resources - Incomplete and imperfect information - Managers have eliminated decision making capabilities - Managers have to satisfice Advantages to group decision-making: 1. Multiple perspectives 2. More information 3. More alternative solutions 4. More committed to making chosen solutions work Disadvantages1. Susceptible to groupthink and to considering a limited number of solutions 2. Takes time 3. 1 or 2 people dominate group 4. Member’s can be detached from the decision Groupthink will occur if: - Group is insulated - Expresses strong preference for a particular decision - NO established procedure - Members have similar backgrounds Structured conflict: C type: cognitive conflict- Disagreement that focuses on problem and issue related difference of opinion - Productive conflict A type: Affective conflict - Disagreement that focuses on individuals or personal issuesWays to resolve structured conflicts. 1. Devil’s advocacy: - Generate a solution - Assign a devil’s advocate to criticize and question - Present the criticize of the solution to key decision makers - Gather additional information - Decide whether to use, change, or not use the original solution 2. Dialectical inquiry: - Generate a solution - Identify the assumptions underlying the solution - Generate a conflicting counterproposal based on opposite assumptions - Have advocates of each position - Decide where to use, change or not use the original proposal Group Decision making techniques Nominal group technique: - Members write down as many problems and solutions as possible - Share one idea at a time - Group discusses advantages / disadvantages - Ideas are ranked during quiet time - Read aloud the ranking and the group with highest rank is chosen Delphi technique: - Panel of experts - Create a questionnaire of open ended questions - Summarize the responses and feed back to panel until members reach agreement - Create a brief report and send to the panel members for agreement/ disagreement - Continue feedback process until decision is reached Stepladder technique: - Start out with 2 people and come to a consensus - Add a third member and do the process again - Keep adding members until a decision is reached Electronic brainstorming: - More ideas better- All ideas are acceptable - Other group member’s ideas should be used to come up with more ideas - Do not criticize ideas - Pros: Overcomes blocking, and evaluation apprehension - Cons: Greater expense, no automatic acceptance of ideas, lack of typing skills can frustrated


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