How managers make decision

  • Created by: Rehzi
  • Created on: 31-12-17 20:29
What is a decision?
It involves a choice between actions, it is goal-oriented and usually involves evaluation of outcomes
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What are the different types of decision making?
Strategic, tactical and operational decision making
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What is strategic decision making?
It involves the general direction taken by an individual or an organisation, it takes some to make and involves outcomes that occur in the long term
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What is tactical decision making?
It involves the implementation of strategy, consists of smaller scale decisions, takes a shorter time to make and outcomes occur in the short term
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What is operational decision making?
day to day decision making needed to execute plans and tactics
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What are unstructured decisions?
Where you know you have to act but have no clear idea about the goals or objectives, the alternative actions that are available or how they should be evaluated.
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What are structured decisions?
Clear objectives, a clearly defined choice set and an understanding of how the alternatives are to be evaluated.
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What is a Risky decision?
You don't know which of the outcomes may occur and it involves risk and uncertainty.
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What is a Riskless decision?
Outcomes are known and the problem is knowing which is the best value option. Need to trade-off cost and value
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How good are people at making decisions?
People are usually as good as they think but sometimes they are not.
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What are normative theories?
what people should do if they wish to be rational, formal theories, sets of axioms, underlying mathematical proof; involves maximising best interests of the decision makers or maximising expected utility.
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What are descriptive theories?
what people actually do , developed in terms of mathematical models describing how the decision information is combined to determine choice or in behavioural terms identifying the psychological/thinking processes involved
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What are prescriptive theories?
take account of what we know about the difficulties people have in making decisions and use this to prescribe procedures that people should follow if they wish to be consistent with the normative theory – i.e. switch from S1 to S2
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What is an axiom?
An axiom is an assumption or a statement that is taken to be true, to serve as or starting point for further reasoning and arguments. In rational decision making, certain axioms are assumed to be met (but often aren’t)
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What are the two ways that researchers have approached choice?
One way is to ignore the confusion and complexity and assume that the process has an underlying orderliness to it. The other way is to focus on the confusion and complexity and to assume that they are integral to the process
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What does it mean to think of decisions as gambles ?
ALL risky decisions ( in cluding personal ones e.g. whether to marry! ) can be reduced to gamble - like structures and this is what happens when people make decisions.
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Card 2

Front

What are the different types of decision making?

Back

Strategic, tactical and operational decision making

Card 3

Front

What is strategic decision making?

Back

Preview of the front of card 3

Card 4

Front

What is tactical decision making?

Back

Preview of the front of card 4

Card 5

Front

What is operational decision making?

Back

Preview of the front of card 5
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