{"id":16960,"date":"2014-10-14T04:51:25","date_gmt":"2014-10-14T04:51:25","guid":{"rendered":"http:\/\/vskills.in\/certification\/blog\/?p=16960"},"modified":"2024-04-03T13:14:30","modified_gmt":"2024-04-03T07:44:30","slug":"decision-making","status":"publish","type":"post","link":"https:\/\/www.vskills.in\/certification\/blog\/decision-making\/","title":{"rendered":"Decision Making"},"content":{"rendered":"

\"decision-making\"<\/a><\/span><\/b><\/p>\n

Approaches in decision making<\/b><\/p>\n

    \n
  1. Rationality Approach \u2013 Logical, rational, Consistent with objectives, value maximizing.<\/li>\n
  2. Bounded Rationality: Decision making that\u2019s rational but limited (bounded) by an individual\u2019s ability to process information. They are rational within limits.<\/li>\n<\/ol>\n

    Satisfying \u2013 making a decision, which is `good enough\u2019 not necessarily the best.<\/p>\n

    Escalation of commitment: High commitment to a previous decision despite evidence it may be a poor decision.<\/p>\n

      \n
    1. Intuitive Decision Making: A survey (Miller and Ireland) that half of the executives used intuition more often than formal analysis to run their companies. A study (Seo and Barrett) show that managers who experienced intense feelings and emotions achieved higher decision- making performance.<\/li>\n<\/ol>\n

      \u00a0<\/b><\/p>\n

      Types of Decisions<\/b><\/p>\n

        \n
      1. Structured or programmed decision (generally if the problem is easily defined and complete)\n
          \n
        1. Repetitive in nature, Developing alternative generally not possible.<\/li>\n
        2. Procedures, rules and policies to handle.<\/li>\n<\/ol>\n<\/li>\n
        3. Unstructured problems and non-programmed decisions.\n
            \n
          1. New type<\/li>\n
          2. Ambiguous information<\/li>\n
          3. Non-recurring<\/li>\n
          4. Custom made solutions<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

             <\/p>\n

            Twelve Decision Making Errors\/Biases <\/b><\/p>\n

              \n
            1. Over Confidence\u00a0 (When they hold unrealistically + positive views<\/li>\n
            2. Immediate gratification (They want immediate rewards)<\/li>\n
            3. Anchoring effect (When they fixate on initial information and are unable to adjust or change)<\/li>\n
            4. Selective Perception (When they selectively interpret data events)<\/li>\n
            5. Confirmation (Base their decision on past decision)<\/li>\n
            6. Framing (Decision by drawing attention to specific information)<\/li>\n
            7. Availability (Considering information which they remember or more recent)<\/li>\n
            8. Representation (Consider analogies and identical situations)<\/li>\n
            9. Randomness (Create meaning out of random events)<\/li>\n
            10. Sunk costs (forget that current choices cannot correct the past)<\/li>\n
            11. Self serving (To take credit for their successes)<\/li>\n
            12. Hind sight (Decision to say that they could have accurately predicted the outcomes).<\/li>\n<\/ol>\n

               <\/p>\n","protected":false},"excerpt":{"rendered":"

              Approaches in decision making Rationality Approach \u2013 Logical, rational, Consistent with objectives, value maximizing. Bounded Rationality: Decision making that\u2019s rational but limited (bounded) by an individual\u2019s ability to process information. They are rational within limits. Satisfying \u2013 making a decision, which is `good enough\u2019 not necessarily the best. Escalation of commitment: High commitment to a…<\/p>\n","protected":false},"author":20,"featured_media":17003,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[1533],"tags":[923],"class_list":["post-16960","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management-2","tag-decision-making"],"acf":[],"yoast_head":"\nDecision Making - Vskills Blog<\/title>\n<meta name=\"description\" content=\"Learna and know Details on Decision Making: Approaches in decision making- Rationality Approach and Bounded Rationality. 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