Chapter 7: Individual and Group Decision Making

Vocabulary practice flashcards covering models of decision making, decision styles, cognitive heuristics and biases, big data, analytics, and group problem-solving techniques from Chapter 7.

Decision

A choice made from available alternatives.

Decision making

The process of identifying and choosing among alternative courses of action.

Rational model of decision making

Also called the classical model; a prescriptive framework that explains how managers should make logical and optimal decisions.

Problems

Difficulties that inhibit the achievement of goals, such as customer complaints, supplier breakdowns, staff turnover, sales shortfalls, competitor innovations, low employee motivation, and poor quality.

Opportunities

Situations that present possibilities for exceeding existing goals.

Diagnosis

The process of identifying and analyzing underlying causes of a problem or opportunity.

Law of unintended consequences

The phenomenon where implemented decisions produce unforeseen results, highlighting the necessity of ongoing evaluation and follow-up.

Nonrational models of decision making

Descriptive models that explain how managers actually make decisions, assuming that decision making is nearly always uncertain and risky.

Bounded rationality

The concept suggesting that the ability of decision makers to be rational is limited by numerous constraints.

Hubris

An extreme and inflated sense of pride, certainty, and confidence.

Satisficing model

A nonrational decision-making model in which managers seek alternatives until they find one that is satisfactory rather than optimal.

Intuition

The practice of making a choice without the use of conscious thought or logical reference.

Ethics officer

An individual trained about ethical matters in the workplace, particularly regarding resolving ethical dilemmas.

Decision tree

A graph of decisions and their possible consequences used to create a plan to reach a goal.

Evidence-based decision making

The process of gathering and analyzing high-quality data to develop and implement a plan of action.

Big Data

An extremely large quantity of data that is too large for a typical computer to handle and requires new technologies and statistical approaches to process.

Descriptive analytics

An analytical approach that identifies trends and relationships within big data.

Artificial Intelligence (AI)

A set of technologies that develop human-like capabilities, such as gathering and interpreting information, generating responses, and learning from decisions to attain specific objectives.

Machine learning

The process by which computers use algorithms and statistical models to detect patterns in data without being explicitly programmed.

Predictive analytics

An approach that combines historical data with statistical models and machine learning to specify the likelihood of future outcomes.

Autonomous devices

Machines that collect data to make calculations, define probabilities, and generate reason-based decisions according to programmed goals.

Value orientation

A dimension of decision style reflecting the extent to which a person focuses on either task and technical concerns or people and social concerns when making decisions.

Tolerance for ambiguity

An individual difference indicating the extent to which people have a high need for structure or control in their lives.

Decision-making styles model

A 2x2 framework classifying decision-making styles into Analytical, Conceptual, Directive, and Behavioral based on tolerance for ambiguity (high to low) and value orientation (task and technical vs. people and social concerns).

Directive style

A decision-making style characterized by a low tolerance for ambiguity and an orientation toward task and technical concerns; practitioners are action-oriented, efficient, logical, practical, and systematic.

Analytical style

A decision-making style characterized by a high tolerance for ambiguity and a focus on task and technical concerns; managers like lots of information and alternatives and may tend to overanalyze.

Conceptual style

A decision-making style characterized by a high tolerance for ambiguity and a focus on people and social aspects, relying on intuition, discussions with others, and a long-term perspective.

Behavioral style

The most people-oriented decision-making style, characterized by a low tolerance for ambiguity and a focus on social interaction, open exchange of opinions, and verbal over written information.

Heuristics

Strategies or rules of thumb that simplify the process of decision making.

Availability bias

The use of information readily available from memory to make judgments, often causing managers to give disproportionate weight to recent behaviors.

Representativeness bias

The tendency to make faulty generalizations based on a small sample or a single event.

Confirmation bias

The tendency to seek information that supports one's point of view while discounting data that contradicts it.

Sunk cost bias

Also called the sunk-cost fallacy; occurs when decision makers add up past investments of time, money, and effort and conclude a project is too costly to abandon, even when evidence supports changing course.

Anchoring and adjustment bias

The tendency to make decisions based on an initial figure or standard, even when that figure is irrelevant to market realities.

Overconfidence bias

A bias in which people's subjective confidence in their decision making is greater than their objective accuracy.

Hindsight bias

Also called the 'I-knew-it-all-along' effect; the tendency for people to view past events as more predictable than they really were.

Framing bias

The tendency of decision makers to be influenced by the way a situation or problem is presented to them.

Escalation of commitment bias

A bias whereby decision makers increase their commitment to a project despite negative information, remaining fixated on prospective future gains.

Categorical thinking bias

The tendency of decision makers to sort information and people into buckets based on observed or inferred characteristics.

Shame participation

A group disadvantage where powerless but useful individuals are selected by leaders merely to rubber-stamp decisions and work hard to implement them.

Groupthink

A group phenomenon occurring when members strive to agree for the sake of unanimity and avoid accurately assessing the decision situation.

Goal displacement

A disadvantage in group decision making where the primary goal is subsumed by a secondary goal.

Minority dissent

Dissent that occurs when a minority within a group publicly opposes the beliefs, attitudes, ideas, procedures, or policies assumed by the majority.

Consensus

A group state reached when all members are able to express their opinions and agree to support or live with the final decision.

Brainstorming

A group problem-solving technique used to help groups generate multiple ideas and creative alternatives for solving problems.

Electronic brainstorming

Also called brainwriting; a method in which group members come together over a computer network to generate ideas and alternatives.

Devil's advocacy

A group decision-making technique that assigns someone the specific role of the critic.

Dialectic method

A group technique calling for managers to foster a structured dialogue or debate of opposing viewpoints prior to making a decision.

After-action reviews

Also known as project post-mortems; structured reviews of recent decisions conducted to identify possible future improvements.