【正文】 roup Decision Making ? Many anizational decisions are made by groups, especially when problems are ill structured. ? Why use groups for decisionmaking? Copyright 169。 2023 Pearson Canada Inc. Chapter 11 / Slide 45 Rational Decision Making – A Summary ? The rational decisionmaking model provides a good guide for how many decisions should be made. ? It provides only a partially accurate view of how they are made. ? For plex, unfamiliar decisions, the rational model provides a pretty good picture of how people actually make decisions. Copyright 169。 2023 Pearson Canada Inc. Chapter 11 / Slide 41 How Emotion and Mood Affect Decision Making ? Strong emotions frequently figure in the decision making process. ? Emotions can help decision making but strong emotions can also be a hindrance. ? Mood affects what and how people think when making decisions. ? Mood has the greatest impact on uncertain, ambiguous decisions of the type that are especially crucial for anizations. Copyright 169。 2023 Pearson Canada Inc. Chapter 11 / Slide 37 Preventing Escalation of Commitment ? Encourage continuous experimentation with reframing the problem. ? Set specific goals for the project in advance that must be met if more resources are to be invested. Copyright 169。 2023 Pearson Canada Inc. Chapter 11 / Slide 33 Sunk Costs ? The justification of faulty decisions is best seen in the irrational treatment of sunk costs. ? Sunk costs are permanent losses of resources incurred as the result of a decision. ? Since these resources have been lost due to a past decision, they should not enter into future decisions. Copyright 169。 2023 Pearson Canada Inc. Chapter 11 / Slide 29 Risky Decision Making (continued) ? It is important to be aware of what reference point you are using when you frame decision alternatives. ? Framing a problem as a choice between losses can contribute to a foolish level of risk taking. ? Learning history can modify preferences for or against risk. Copyright 169。 2023 Pearson Canada Inc. Chapter 11 / Slide 25 Alternative Development, Evaluation, and Choice (continued) ? People are poor at revising estimates of probabilities and values as they acquire additional information. ? The anchoring effect illustrates that decision makers do not adjust their estimates enough from some initial estimate that serves as an anchor. ? It is possible to reduce some of these cognitive biases by making people more accountable for their decisions. Copyright 169。 2023 Pearson Canada Inc. Chapter 11 / Slide 21 Too Little Information ? Sometimes, decision makers do not acquire enough information to make a good decision. ? Several cognitive biases contribute to this such as using whatever information is most readily available and the tendency to be overconfident. ? Confirmation bias refers to the tendency to seek out information that conforms to one’s own definition of or solution to a problem. Copyright 169。 2023 Pearson Canada Inc. Chapter 11 / Slide 17 Problem Identification and Framing ? Bounded rationality can lead to the following difficulties in problem identification: – Perceptual defence. – Problem defined in terms of functional specialty. – Problem defined in terms of solution. – Problem diagnosed in terms of symptoms. Copyright 169。 and – only criterion for decision making is economic gain. ? These perfectly rational characteristics do not exist in real decision makers. Copyright 169。 2023 Pearson Canada Inc. Chapter 11 / Slide 11 The Rational Decision Making Process Copyright 169。 2023 Pearson Canada Inc. Chapter 11 / Slide 7 WellStructured Problems (continued) ? Programs shortcircuit the decisionmaking process by enabling the decision maker to go directly from problem identification to solution. ? They are also known as rules, routines, standard operating procedures, or rules of thumb. ? They provide a useful means of solving well structured problems. ? Programs are only as good as the decisionmaking process that led to the adoption of the program in the first place. Copyright 169。 2023 Pearson Canada Inc. Chapter 11 / Slide 3 Learning Objectives 4. Explain the process of escalation of mitment to an apparently failing course of action. 5. Consider how emotions and mood affect decision making. 6. Summarize the pros and cons of using groups to make decisions, with attention to the groupthink phenomenon and risk assessment. 7. Discuss techniques for improving anizational decision making. Copyright 169。 2023 Pearson Canada Inc. Chapter 11 / Slide 2 Learning Objectives 1. Define decision making and differentiate wellstructured and illstructured problems. 2. Compare and contrast perfectly rational decision making with decision making under bounded rationality. 3. Discuss the impact of framing and cognitive biases on the decision process. Copyright 169。 2023 Pearson Canada Inc. Chapter 11 / Slide 6 WellStructured Problems ? A problem for which the existing state is clear, the desired state is clear, and how to get from one state to another is fairly obvious. ? These problems are simple, and their solutions arouse little controversy. ? They are repetitive and familiar and they can be programmed. ? A program is a standardized way of solving a problem. Copyright 169。 2023 Pearson Canada Inc. Chapter 11 / Slide 10 The Compleat Decision Maker – A Rational DecisionMaking Model ? A rational decision maker might use a model that involves a sequence of steps that are followed when making a decision. Copyright 169。 – is perfectly logical。 2023 Pearson Canada Inc. Chapter 11 / Slide 16 Cognitive Biases ? Cognitive biases are tendencies to acquire and process information in a particular