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NON RATIONAL DECISION MAKING:Group Decision making

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Principles of Management ­ MGT503
VU
Lesson 6.18
NON RATIONAL DECISION MAKING
Non Rational Model:
The non-rational models of managerial decision making suggest that information-gathering and
processing limitations make it difficult for managers to make optimal decisions.
1.
The satisficing model, developed in the 1950s by Novel Prize winning economist
Herbert Simon, holds that managers seek alternatives only until they find one that looks
satisfactory, rather than seeking the optimal decision.
a.
Bounded rationality means that the ability of managers to be perfectly rational in
making decisions is limited by such factors as cognitive capacity and time
constraints.
b.
Actual decision making is not perfectly rational because of
1)
Inadequate information
2)
Time an cost factors
3)
The decision maker's own misperceptions or prejudices
4)
Limited human memory
Limited human data-processing abilities.
Satisficing can be appropriate when the cost of delaying a decision or searching for a better alternative
outweighs the likely payoff from such a course.
The incremental model holds that managers make the smallest response possible that will reduce the
problem to at least a tolerable level.
a.
Managers can make decisions without processing a great deal of information.
b.
Incremental strategies are usually more effective in the short run than in the long
run.
The garbage-can model of decision making holds that managers behave in virtually a random pattern in
making non-programmed decisions.
a.
Factors that determine decisions include the particular individuals involved in the
decisions, their interests and favorite solutions to problems, as well as any
opportunities they stumble upon.
b.
The garbage-can approach is often used in the absence of solid strategic
management and can lead to severe problems.
Group Decision making:
A.
Decisions on all levels of organization are frequently made by groups.
Group decision making has several advantages and disadvantages over individual decision making.
1.
Some advantages of group decision making include:
a)
Groups bring more diverse information and knowledge to bear on the
question under consideration.
b)
An increased number of alternatives can be developed.
c)
Greater understanding and acceptance of the final decision are likely.
d)
Members develop knowledge and skill for future use.
2.
Group decision making has several disadvantages when compared to individual
decision making.
a)
Group decision making is more time consuming.
Disagreements may delay decisions and cause hard feelings.
b)
c)
The discussion may be dominated by one or a few group members.
d)
Groupthink is the tendency in cohesive groups to seek agreement about
an issue at the expense of realistically appraising the situation.
B.
Managers can enhance group decision-making processes by taking steps to avoid
the pitfalls of group decision making.
1.
Individuals should be involved only if they have information and knowledge
relevant to the decision.
47
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Principles of Management ­ MGT503
VU
2.
The composition of the group should reflect the diversity of the broader
workgroup. Heterogeneous groups have been found to be more effective over
time than groups with the same nationality and ethnic backgrounds.
3.
Two tactics are available to avoid group-think
a.
Devil's advocates are individuals who are assigned the role of making
sure than the negative aspects of any attractive decision alternatives are
considered.
b.
Dialectical inequity is a procedure in which a decision situation is
approached from two opposite points of view.
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Table of Contents:
  1. HISTORICAL OVERVIEW OF MANAGEMENT:The Egyptian Pyramid, Great China Wall
  2. MANAGEMENT AND MANAGERS:Why Study Management?
  3. MANAGERIAL ROLES IN ORGANIZATIONS:Informational roles, Decisional roles
  4. MANAGERIAL FUNCTIONS I.E. POLCA:Management Process, Mistakes Managers Make
  5. MANAGERIAL LEVELS AND SKILLS:Middle-level managers, Top managers
  6. MANAGEMENT IDEAS: YESTERDAY AND TODAY, Anthropology, Economics
  7. CLASSICAL VIEW OF MANAGEMENT:Scientific management
  8. ADMINISTRATIVE VIEW OF MANAGEMENT:Division of work, Authority
  9. BEHAVIORAL THEORIES OF MANAGEMENT:The Hawthorne Studies
  10. QUANTITATIVE, CONTEMPORARY AND EMERGING VIEWS OF MANAGEMENT
  11. SYSTEM’S VIEW OF MANAGEMENT AND ORGANIZATION:Managing Systems
  12. ANALYZING ORGANIZATIONAL ENVIRONMENT AND UNDERSTANDING ORGANIZATIONAL CULTURE
  13. 21ST CENTURY MANAGEMENT TRENDS:Organizational social Responsibility
  14. UNDERSTANDING GLOBAL ENVIRONMENT WTO AND SAARC
  15. DECISION MAKING AND DECISION TAKING
  16. RATIONAL DECISION MAKING:Models of Decision Making
  17. NATURE AND TYPES OF MANAGERIAL DECISIONS:Decision-Making Styles
  18. NON RATIONAL DECISION MAKING:Group Decision making
  19. GROUP DECISION MAKING AND CREATIVITY:Delphi Method, Scenario Analysis
  20. PLANNING AND DECISION AIDS-I:Methods of Forecasting, Benchmarking
  21. PLANNING AND DECISION AIDS-II:Budgeting, Scheduling, Project Management
  22. PLANNING: FUNCTIONS & BENEFITS:HOW DO MANAGERS PLAN?
  23. PLANNING PROCESS AND GOAL LEVELS:Types of Plans
  24. MANAGEMENT BY OBJECTIVE (MBO):Developing Plans
  25. STRATEGIC MANAGEMENT -1:THE IMPORTANCE OF STRATEGIC MANAGEMENT
  26. STRATEGIC MANAGEMENT - 2:THE STRATEGIC MANAGEMENT PROCESS
  27. LEVELS OF STRATEGIES, PORTER’S MODEL AND STRATEGY DEVELOPMENT (BCG) AND IMPLEMENTATION
  28. ENTREPRENEURSHIP MANAGEMENT:Why Is Entrepreneurship Important?
  29. ORGANIZING
  30. JOB DESIGN/SPECIALIZATION AND DEPARTMENTALIZATION
  31. SPAN OF COMMAND, CENTRALIZATION VS DE-CENTRALIZATION AND LINE VS STAFF AUTHORITY
  32. ORGANIZATIONAL DESIGN AND ORGANIC VS MECHANISTIC VS VIRTUAL STRUCTURES
  33. LEADING AND LEADERSHIP MOTIVATING SELF AND OTHERS
  34. MASLOW’S NEEDS THEORY AND ITS ANALYSIS
  35. OTHER NEED AND COGNITIVE THEORIES OF MOTIVATION
  36. EXPECTANCY, GOAL SETTING AND RE-ENFORCEMENT THEORIES
  37. MOTIVATING KNOWLEDGE PROFESSIONALS LEADERSHIP TRAIT THEORIES
  38. BEHAVIORAL AND SITUATIONAL MODELS OF LEADERSHIP
  39. STRATEGIC LEADERSHIP MODELS
  40. UNDERSTANDING GROUP DYNAMICS IN ORGANIZATIONS
  41. GROUP CONCEPTS, STAGES OF GROUP DEVELOPMENT AND TEAM EFFECTIVENESS
  42. UNDERSTANDING MANAGERIAL COMMUNICATION
  43. COMMUNICATION NETWORKS AND CHANNELS EFFECT OF ICT ON MANAGERIAL COMMUNICATION
  44. CONTROLLING AS A MANAGEMENT FUNCTION:The control process
  45. CONTROLLING ORGANIZATIONAL PERFORMANCE THROUGH PRODUCTIVITY AND QUALITY