Chapter 7 Part 1

Vocabulary flashcards covering rational decision-making stages, classical model assumptions, and nonrational decision-making concepts.

Decision

A choice made from among available alternatives.

Decision Making

The process of identifying and choosing alternative courses of action.

Rational Model of Decision Making

Also called the classical model; explains how managers should make decisions and predicts managers will make logical decisions that are the optimal means to further the organization's best interests.

Diagnosis

Identifying and analyzing the underlying causes.

Stage 1 of Rational Decision Making

Identify the problem or opportunity by determining the actual versus the desirable and analyzing underlying causes through diagnosis.

Stage 2 of Rational Decision Making

Think up alternative solutions (both obvious and creative) by generating novel ideas about solving for the most important causes and brainstorming multiple solutions.

Stage 3 of Rational Decision Making

Evaluate alternatives and select a solution based on ethics, feasibility, and ultimate effectiveness beyond cost and quality, which can be facilitated by big data and artificial intelligence.

Stage 4 of Rational Decision Making

Implement and evaluate the solution chosen through careful planning and sensitivity to those affected, with options to give it more time, change it slightly, try another alternative, or start over if it is not working.

Assumptions of the Rational Model

The assumptions that managers have complete error-free information without uncertainty, perform logical and unemotional analysis without prejudice or bias, and objectively choose the best decision for the organization.

Bounded Rationality

Suggests that decision makers' ability to be rational is limited by numerous constraints.

Hubris

Defined as an extreme and inflated sense of pride, certainty, and confidence.

Satisficing Model

A nonrational decision-making model that seeks alternatives until finding one that is satisfactory, not optimal ('Satisfactory Is Good Enough').