Decision Making & Creativity

Flashcards covering key concepts from Decision Making & Creativity, including rational and nonrational decision making, biases, and creativity techniques.

A process for identifying and choosing solutions that lead to a desired state of affairs.

What is the definition of the Decision Making Process?

What are the two main systems of thinking involved in decision-making?

Rational decision making and Nonrational decision making.

How is rational decision making characterized?

It utilizes analytical and conscious thought, is slow, logical, and requires cognitive effort.

How is nonrational decision making characterized?

It relies on intuition, involves mental shortcuts, can be quick, and requires little cognitive effort.

What assumptions are made about managers in rational decision making?

Managers are completely objective and possess complete information.

What is Stage 1 of the Rational Decision Making Model?

Identify the problem or opportunity, which is a gap between our current state and our desired outcome.

What is Stage 2 of the Rational Decision Making Model?

Generate alternative solutions, investing time to brainstorm as many possible solutions as possible.

What is Stage 3 of the Rational Decision Making Model?

Evaluate alternatives and select a solution, considering ethics, feasibility, and whether it removes the causes of the problem.

What is the difference between satisficing and optimizing?

Satisficing means choosing an acceptable, though not perfect, option by comparing it against the goal, while optimizing means producing the best possible solution and achieving the best balance among goals.

What is Stage 4 of the Rational Decision Making Model?

Implement the solution and evaluate its effectiveness, returning to Stage 1 if it fails.

What are some benefits of rational decision making?

It leads to better quality decisions and greater transparency around the process.

What are some issues with rational decision making?

Conditions needed to optimize decisions (like complete info, lack of constraints) are hard to meet, and emotions can cloud judgment.

What is the core assumption behind nonrational decision-making?

Actual decisions in complex situations are often nonrational because we are guided by bounded rationality.

What is bounded rationality?

Our ability to make decisions is restricted (bound) by a series of constraints.

What are some pros of intuitive decision making?

It is useful when a quick decision is required or when resources are limited, difficult, or costly to acquire.

What are some cons of intuitive decision making?

It is susceptible to bias, can lead to lower-quality decisions, and may be difficult to gain acceptance.

What are judgmental heuristics?

Cognitive shortcuts or biases used to simplify decision-making, which can lead to bad decisions.

What is confirmation bias?

A decision-maker subconsciously makes up their mind and then seeks information that supports their decision while ignoring or discounting contradictory information.

What is overconfidence bias?

The tendency for people to be overly confident in their own abilities or judgments.

What is availability bias?

The tendency to estimate the likelihood or importance of something based on how easily we can think of an example (e.g., recent, emotional, vivid information).

What is escalation of commitment bias or sunk costs?

The tendency to stick with a decision or investment of time, money, or energy, even if current costs outweigh the benefits.

What is creativity?

The process of producing new and useful ideas, which can involve creating new things, combining existing things, or improving/changing things.

What are some rules for brainstorming as a practical problem-solving technique?

Go for quantity over quality, encourage wild ideas, defer judgment, and be visual.

What are some suggestions to boost creativity?

Change your routine (commute, lunch, workspace), listen to noise or music, or try a creativity exercise.