decision making
TRANSCRIPT
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Decision making
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Types
• Programmed
• Non-programmed
• Top-down
• Empowered
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Processes - Individual
Identify problem
Establish decision criteria
Weigh decision criteria
Generate alternatives
Evaluate alternatives
Make a choice
Implement choice
Evaluate
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Processes - Individual
• Rational economic model
• Bounded rationality• Satisficing
• Intuitive decision-making
• Creative decision-making
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Processes – Group/Org
• Brainstorming
• Nominal group
• Stepladder
• Delphi
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Factors affecting DM - individual
• Styles • DIRECTIVE,
• ANALYTICAL,
• CONCEPTUAL,
• BEHAVIOURAL
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Factors affecting DM - individual
• Individual differences• Styles
• Risk taking
• Values
• Intuition
• Creativity
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Factors affecting DM – Group/Org
• Groupthink• Asch’s experiment
• Group polarization
• Political pressures
• Time pressures
• Cultural context
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• Video time!
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Factors affecting DM
• Traps, biases• Overconfidence
• Framing
• Anchoring
• Status-quo
• Sunk cost
• escalation of commitment
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Points to note
• Awareness of traps in our thinking
• Keep questioning assumptions
• Seek various perspectives/frames
• Understand decision styles of self, others
• Encourage dissent
• Cultivate culture of openness, failure acceptance
• Awareness of yes-(wo)men, groupthink
• Use nominal techniques to allow private votes
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QUIZ – 3 [take home]
Individually work and
• Map which traps and biases from the reading would significantly affect which stages of the decision making process. Substantiate with examples [10 marks]
• Submit a print copy in tomorrow’s class
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Mental accounting
• Imagine that you have decided to see a movie and have paid the admission price of $10 per ticket. As you enter the theater, you discover that you have lost the ticket. The seat was not marked, and the ticket cannot be recovered. Would you pay $10 for another ticket?
• 46% ready to buy
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• Imagine that you have decided to see a movie where admissionis $10, but you have not yet bought the ticket. As you walk to the theater, you discover that you have lost a $10 bill. Would you still pay $10 for a ticket to the movie?
• 88% ready to buy