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MAKING
PROCESS
10 Oktober 2012
Decision Making
Decision
Problem
Characteristics of Problems
Criterion
Memory and Storage
Weight
10
Battery life
Carrying Weight
Warranty
Display Quality
Making Decisions
Rationality
Managers make logical and consistent, valuemaximizing choices with specified constraints.
Have
Have
Will
Assumptions of Rationality
Bounded Rationality
Will
Structured Problems
Programmed Decision
Unstructured Problems
Nonprogrammed Decisions
Decision-Making Conditions
Certainty
Risk
Event
Expected
Expected Probability= Value of Each
Revenues
Alternative
0.3
Normal snowfall
0.5
Light snowfall
725,000
350,000
0.2
$255,000
70,000
$687,500
362,500
Decision-Making Conditions
Uncertainty
Maximin:
Minimax:
Payoff Matrix
Regret Matrix
Decision-Making Styles
Ways of thinking
Linear
Non
High
Directive
Use
Analytic
Make
Conceptual
Maintain
Behavioral
Avoid
627
Decision-Making Matrix
Heuristics
Overconfidence Bias
Anchoring Effect
Confirmation Bias
Framing Bias
Availability Bias
Representation Bias
Randomness Bias
Self-Serving Bias
Hindsight Bias
Characteristics of an Effective
Decision-Making Process