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Flashcards in Lesson 8 Deck (26)
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1

What are the 3 decision making categories?

- strategic decisions- set the course
- tactile decisions- how things get done
- operational decision- made everyday to run it

2

What are the 4 decision making approaches?

- bounded rationality decision making model
- creative decision making model
- intuitive decision making model
- rational decision making model

3

Define the rational decision making model

- steps considered to consider if their goal is to maximize the quality of their outcomes
- making the BEST LOGICAL choice

4

What are the assumptions the rational decision making model? People...

- completely understand the problem and agree that a decision must  be made
- know all their available choices,
- have no perceptual biases, and,
- want to make optimal decisions.

5

What are the 8 steps of the rational decision making model?

1. identify the problem
2. establish decision criteria
3. weigh decision criteria
4. generate alternatives
5. evaluate the alternatives
6. choose the best alternative
7. implement the decision
8. Evaluate the decision

6

What are 2 issues when identifying the problem in the rational decision making model?

- people refer to solution instead of the problem
- tendency to make decisions not by evaluating each option but look at implicit favourites

7

What is the problem when identifying alternatives in the rational decision making model?

access to all information and looking at all pros and cons would be time consuming

8

What is analysis paralysis?

when you have too much info, a lot of time wasted on gathering and thinking and no decisions

9

What is the bounded rationality decision making model?

recognizes limitations, individuals knowingly limit their options to manageable set and choose first acceptable alternative

10

With the bounded rationality decision making model, what does it tend to do?

satisfice- accepting first alternative that meets minimum requirements

11

What is the main difference between satisficing and rational decision making model?

rather than choosing the BEST option and maximizing potential, you SAVE cognitive time and effort and choose the FIRST alternative that meets the min threshold

12

Explain the intuitive decision making model?

arriving at decisions without conscious reasoning (guessing, being lucky, just came to me)

13

What does the intuitive decision making model argue?

you scan the environment for cues to recognize patterns, then play a potential action though the outcome based on prior experience (training, knowledge, experience)

14

Does more than one choice considered at a time with the intuitive decision making model?

NO

15

What is a downside to the intuitive decision making model?

can be powerful, but harder to teach to decision makers

16

What are the five steps to - creative decision making model?

1. problem identification
2. Immersion
3. Incubation
4. Illumination
5. Verification and application

17

Define the immersion step of - creative decision making model?

you consciously think about the problem and gather information

18

Define the incudbation step of - creative decision making model?

you set the problem aside and not think about it for a while, then the brain works on it unconciously

19

What are the three interactive factors where creativity occurs ?

- personality traits (openness, risk taking)
- attributes (expertise, imagine, motivation)
- situational context (encouragement, time pressure)

20

Name 5 decision making traps

- over confidence bias
- hindsight bias
- anchoring bias
- framing bias
- escalation of commitment

21

Explain over confidence bias

overestimate our abilities to do things

22

Explain hindsight bias

looking back in time and mistakes appear.. obvious they would have happened but symptoms were ignored

23

Explain anchoring bias

rely too heavily on a single piece of information

24

Explain framing bias

influenced by the way a situation or problem is presented

25

Explain escalation of Commitment

continue on a failing course of action after info reveals it may be a poor path to follow

26

What is a away to avoid escalation of Commitment? (2)

having strict turning back points, they could be financial or time based

create a climate where people do not fear admitting that their initial idea no longer makes economic sense