Management Decision-Making Concepts and Practices

Flashcards covering key concepts in management decision-making, including types of decisions, biases, goal-setting principles, and social responsibility.

Decision-making

The action or process of identifying a strategy to resolve problems.

Programmed decisions

Routine tasks based on preestablished rules and guidelines.

Nonprogrammed decisions

Decisions based on reason and/or intuition in response to a unique situation that requires tailored actions.

Classical model of decision-making

A five-step model including defining the problem, identifying decision criteria, generating alternatives, rating alternatives, and choosing the best alternative.

Value Orientation

The extent to which a person focuses on either task and technical concerns or people and social concerns when making decisions.

Tolerance for ambiguity

The extent to which a person has a high need for structure or control in his or her life.

Directive decision-making style

A style characterized by low tolerance for ambiguity and a rational way of thinking.

Analytical decision-making style

A style characterized by high tolerance for ambiguity and a rational way of thinking.

Conceptual decision-making style

A style characterized by high tolerance for ambiguity and an intuitive way of thinking.

Behavioral decision-making style

A style characterized by low tolerance for ambiguity and an intuitive way of thinking.

Bounded rationality

The idea that decision-making is constrained by a person’s cognitive limitations.

Satisficing

Choosing the first acceptable alternative.

Intuition

Making decisions based on feelings, beliefs, and hunches.

Heuristics

Mental shortcuts that allow people to solve problems and make judgments quickly and efficiently.

Common-information bias

The tendency to give disproportionate weight to information held by the majority of group members.

Confirmation bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Sunk cost bias

The tendency to continue investing in a failing project to justify previous investments.

Hindsight bias

The tendency to believe, after learning an outcome, that one would have foreseen it.

Escalation of commitment

Continuing to invest resources in a losing proposition when there is evidence indicating it is failing.

Framing bias

The tendency to make decisions based on how the situation is presented.

Groupthink

The practice of thinking or making decisions as a group in a way that discourages creativity or individual responsibility.

Performance dashboards

Visual representation of strategies and goals.

Key performance indicators (KPIs)

Measurements vital to company performance.

Balanced scorecard

A strategic management tool used to track organizational performance against strategic goals.

SMART goals

Goals that are Specific, Measurable, Achievable, Relevant, and Time-bound.

Corporate social responsibility (CSR)

Efforts made by corporations to drive positive environmental and societal change.

Social entrepreneurship

The process of sourcing innovative solutions to social and environmental problems.

Social purpose ventures

Businesses created primarily to address a social problem, with profit being a secondary goal.

Enterprising nonprofits

Nonprofit organizations that generate revenue through entrepreneurial activities to support their social missions.

What are legal decisions in ethical terms?

Decisions that comply with all applicable laws and regulations.

What does individual decision-making involve?

Making choices that align with one's personal values and beliefs.

What characterizes virtuous decision-making?

Decisions that reflect the highest ethical standards and strong moral character.

What is long-term self-interest in decision-making?

Decisions that maximize benefits for the individual or organization over an extended period.

What does community consideration in decisions mean?

Decision-making that takes into account the well-being of the broader community.

What is utilitarian decision-making?

Aims to maximize overall happiness and minimize overall pain.

What is distributed justice in ethical decision-making?

Ensures fairness and equitable distribution of benefits and burdens.

What are codes of conduct?

Ethical guidelines that direct behavior in various situations.

What are social purpose ventures?

Businesses created primarily to address a social problem, with profit being a secondary goal.

What defines social consequence ventures?

Businesses that aim to make a profit while also creating positive social or environmental impact as a byproduct.

What are enterprising nonprofits?

Nonprofit organizations that generate revenue through entrepreneurial activities to support their social missions.

What is the availability heuristic?

A mental shortcut where decisions are made based on the information that is readily available in memory.

What is the anchoring and adjustment heuristic?

Making decisions based on an initial figure or starting point and then adjusting away from that anchor.

What is the representative heuristic?

A mental strategy used to make decisions by comparing a situation to the closest mental prototype or stereotype.

What is brainstorming?

A technique for generating many ideas quickly, encouraging free thinking and creativity.

What is the Delphi technique?

A method of gathering expert opinions through surveys and feedback, often involving multiple rounds of questioning.

What is the nominal group technique (NGT)?

A structured method for generating and prioritizing ideas, typically involving individuals working independently before coming together to discuss their input.

What are results-centered approaches to goal-setting?

Focuses on achieving specific outcomes and often include methods like SMART goals and Management by Objectives (MBO).

What are SMART goals?

Specific, Measurable, Achievable, Relevant, and Time-bound objectives that provide clear direction and accountability.

What is Management by Objectives (MBO)?

A goal-setting process where management and employees agree on specific goals to enhance performance and motivation.

What characterizes the process-centered approach to goal-setting?

Emphasizes continuous improvement in processes, exemplified by Total Quality Management (TQM).

What is Total Quality Management (TQM)?

An approach focused on continual improvement in all aspects of an organization's operations to enhance quality and performance.

What is the contingency model in goal-setting?

Adapting the goal-setting process based on the characteristics of the task at hand, recognizing that different tasks may require different approaches.

What is sequential decision-making?

A process where decisions are made one after another, often building on the outcomes of previous decisions.

What are standing plans?

Ongoing plans that include policies, procedures, and rules to guide the organization's operations and decision-making.

What are single-use plans?

Specific plans designed for a one-time project or program, and are not intended to be used again once the objective is achieved.

What is the Ben Franklin balance sheet?

A decision-making tool that involves weighing the pros and cons of a decision to help clarify the best option.

What is the report card method?

A technique for evaluating a decision against a predetermined rubric or set of criteria to assess its effectiveness.

What is the partner-in-absentia method?

Seeking feedback from someone who is not directly involved in the decision-making process to gain an outside perspective.

What is satisficing?

A decision-making strategy where an individual or group chooses the first acceptable alternative rather than the optimal one, often to save time or effort.