Chapter 11 1. Define decision making. Identify and discuss the different types o

Question

Chapter 11
1. Define decision making. Identify and discuss the different types of decisions. 2. Identify and discuss the 5 steps in the creative decision making process.
3. Identify and discuss 5 decision making biases.
Using the textbook link: http://open.lib.umn.edu/principlesmanagement/. Can you answer questions 1-3? Chapter 11
1. Define decision making. Identify and discuss the different types of decisions. 2. Identify and discuss the 5 steps in the creative decision making process.
3. Identify and discuss 5 decision making biases.
Using the textbook link: http://open.lib.umn.edu/principlesmanagement/. Can you answer questions 1-3? Chapter 11
1. Define decision making. Identify and discuss the different types of decisions. 2. Identify and discuss the 5 steps in the creative decision making process.
3. Identify and discuss 5 decision making biases.
Using the textbook link: http://open.lib.umn.edu/principlesmanagement/. Can you answer questions 1-3?

Explanation / Answer

Q1) Decision making is the process of choosing an action to be taken out of the alternatives available which may also include inaction at times. It is the most important process based on which any action is initiated. It involves detailed analysis of each of the alternatives for maximum stakeholder satisfication.

The different types of decisions include -

Strategic decisions - These decisions involve the strategies to be pursued by the organization to achieve its goals, follow its vision and mission. Strategic decisions are aimed at expansion of the business, profit maximizing and handling the competition in the industry by considering all the internal and external factors of influence. They are taken by the top management and Board of Directors, in some cases.

Tactical decisions - These decisions are medium-term decisions of the organization that involve doing the things right i.e. how the decisions need to be executed to ensure there is no deviation from the expected process. These are taken at managerial level.

Operational decisions - These decisions are taken at departmental and task level usually at employee level. Mostly hese decisions are made at a regular basis.

Q2) Below are the 5 steps in the creative decision making process -

1. Problem Recognition - This involves identification or recognition of the problem.

2. Immersion - This involves thinking about the problem consciously and gathering information. The decision maker needs to get expertise in the area being studied.

3. Incubation - This involves setting the problem aside after completely getting updated with information in immersion stage. The individual still thinks about the problem unconsciously.

4. Illumination - This involves the solution to the problem being apparent and is a spark of a moment. It might not be during the process of thinking or understanding about the problem. It can be at any moment.

5. Verification and application - This involves verification of the feasibility of the decision or solution and implementation of the decision.

Q3) Below are the 5 decision making biases -

1. Overconfidence bias - This occurs when individuals overestimate their ability to preditc future outcomes and their knowledge on the partiular subject.

2. Hindsight bias - This occurs when individuals refer to a past event and feel that it would have been avoided as they already are aware of the same.

3. Anchoring bias - This occurs when individuals rely too heavily on a single source or piece of information.

4. Framing bias - This occurs when individuals are influenced by the way the situation or problem is prsented without carefully analyzing the costs and benefits.

5. Escalation of commitment - This involves individuals continuing on a failing course of action though they are aware that it is a poor path to follow as they are already committed to the path.

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