IM - Decision making

Notes

Decision making  Our perceptions and previous experiences shape our judgement, which influences our decision making. Manager functions: - Planning, organizing, directing and controlling; - Decision making is a big part of manager functions; - Balance between complexity of a decision and their potential impact; - Decisions influenced by the managers personality What is the managerial decision-making process like from a classical perspective? 1. Define the problem 2. Generate alternatives 3. Identify relevant criteria 4. Giving “weight” to the criteria 5. Evaluate each alternative based on each criteria 6. Making the optimal decision Why doesn't this process happen in practice?  This process usually doesn’t happen in practice because humans, even if unconsciously, let their emotions and experiences affect their decisions, so it isn’t purely rational.  Bounded rationality: humans lack time, information and cognitive capacity to evaluate all options  Biases: Confirmation bias, anchoring, and affinity bias distort judgments.  Emotions/context: cultural pressures, power dynamics, and urgency override logic  Satisficing: managers settle for good enough solutions rather than optimal...