Exam 12: Decision Making Processes

Nonprogrammed decisions are repetitive and well defined, and procedures exist for resolving the problem.

Management science sometimes produces decision failures, in part because quantitative data are not rich.

Bounded rationality:

The Gillette Company was given as an example of using a certain decision making approach in the design of razors such as the Sensor. Give an illustration, explaining the decision making approach that was used.

Management knowledge refers to understanding and agreement about how to solve problems and reach organizational goals.

If problem consensus were not achieved relative to a decision that was being made, how would you recommend that managers deal with their decision making process first? After problem consensus had been achieved, would you recommend a different approach?

Organized anarchy is characterized by rapid change and a collegial, nonbureaucratic environment.

A small university department was comprised of six male faculty members. During faculty meetings when the department was faced with a difficult decision, a faculty member would suggest they take a break. During the break, four faculty would adjourn to the coffee room and agree on the decision that would be made. This is an example of:

What is a decision interrupt? Give at least two examples from your own experience.

Apply the principles of escalating commitment to the following situation to carry it forward in time, imagining what would happen next: You are a marketing manager at PrintCards where you have for ten years had the most successful software for creation of all types of cards in the home or office environment. However, PrintCards is finally faced with competition from a more powerful software package, new to the marketplace, that came in at a price of half that of PrintCards. PrintCards quickly began to lose market share, but initially made no adaptation. New product could not be delivered for months into the future because of the timing of the product development cycle. You made a decision not to change the pricing structure of PrintCards because of your department's analysis that the old higher pricing structure was fitting for a product with such high name recognition. Market share continued to decline.

Since programmed decisions are novel and poorly defined, and no procedures exist for solving them, a program must be devised using the garbage can method.

Which of the following is not one of the four streams relevant to organizational decision making?

Discuss the consequences of the garbage can decision process for organizational decision making.

Intuition should not be used in organizational decision making.

Only by making mistakes can managers and organizations go through the process of ____ and acquire sufficient experience and knowledge to perform more effectively in the future.

Due to the rapidly changing business environment, managers and organizations are dealing with a higher percentage of nonprogrammed decisions.

Assume you are involved in important decision making in a medium-size organization. There are three decisions that currently face your organization. One is a problem of integrating the inventory management system with your production system. A second involves the selection of another organization for an acquisition. The third is whether to continue a product line that has been losing market share. Your finance vice president believes the product line should be dropped, while the marketing manager believes that more advertising aimed at a different market will revive sales of the product. Discuss which decision-making approach is likely to be most helpful in analyzing each of these situations.

In the example given at KTM Fahrrad GmbH, a manufacturer in off-road motorcycles, what style decision making did Stefan Pierer use when moving KTM into the street bike market?

Explain what is meant by the bounded rationality perspective of decision making. Provide an example of decision making in your own life in which you can observe the effects of bounded rationality.

Given the principles of escalating commitment, in which situation described below would you give the greatest funding to the same program in 1995?