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rather than in their personal interests. 13 Copyright 169。 2023 Prentice Hall, Inc. All rights reserved. * Making Decisions (cont’d) ? Bounded Rationality ?Managers make decisions rationally, but are limited (bounded) by their ability to process information. ?Assumptions are that decision makers: ?Will not seek out or have knowledge of all alternatives ?Will satisfice—choose the first alternative encountered that satisfactorily solves the problem—rather than maximize the oute of their decision by considering all alternatives and choosing the best. 14 Copyright 169。 2023 Prentice Hall, Inc. All rights reserved. * Influences on Decision Making ? Escalation of Commitment ?Increasing or continuing a mitment to previous decision despite mounting evidence that the decision may have been wrong. ? The Role of Intuition ?Intuitive decision making ?Making decisions on the basis of experience, feelings, and accumulated judgment. 15 Copyright 169。 2023 Prentice Hall, Inc. All rights reserved. * Problems and Decisions ? Structured Problems ?Involve goals that clear, ?Are familiar (have occurred before), ?Are easily and pletely defined—information about the problem is available and plete, ? Programmed Decision ?A repetitive decision that can be handled by a routine approach. 16 Copyright 169。 2023 Prentice Hall, Inc. All rights reserved. * Types of Programmed Decisions ? A Policy ?A general guideline for making a decision about a structured problem. ? A Procedure ?A series of interrelated steps that a manager can use to respond (applying a policy) to a structured problem. ? A Rule ?An explicit statement that limits what a manager or employee can or cannot do in carrying out the steps involved in a procedure. 17 Copyright 169。 2023 Prentice Hall, Inc. All rights reserved. * Policy, Procedure, and Rule Example ? Policy ?Accept all customerreturned merchandise. ? Procedure ?Follow all steps for pleting merchandise return documentation. ? Rules ?Managers must approve all refunds over $. ?No credit purchases are refunded for cash. 18 Copyright 169。 2023 Prentice Hall, Inc. All rights reserved. * Problems and Decisions (cont’d) ? Unstructured Problems ?Problems that are new or unusual and for which information is ambiguous or inplete. ?Problems that will require custommade solutions. ? Nonprogrammed Decisions ?Decisions that are unique and nonrecurring. ?Decisions that generate unique responses. 19 Copyright 169。 2023 Prentice Hall, Inc. All rights reserved. * DecisionMaking Conditions ? Certainty ?A ideal situation in which a manager can make an accurate decision because the oute of every alternative choice is known. ? Risk ?A situation in which the manager is able to estimate the likelihood (probability) of outes that result from the choice of particular alternatives. 20 Copyright 169。 2023 Prentice Hall, Inc. All rights reserved. *