Preview

Organisational Behaviour Ch7

Good Essays
Open Document
Open Document
1508 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Organisational Behaviour Ch7
CHAPTER 7
DECISION MAKING AND CREATIVITY
Describe the six stages in the rational choice decision process

Decision making: the conscious process of making choices among alternatives with the intention of moving toward some desired state of affairs.

Rational choice paradigm of decision making: the view in decision making that people should and typically do, use logic and all available information to choose the alternative with the highest value.
Decision making involves identifying, selecting and applying the best possible alternative. The best decision use pure logic and all available information to choose the alternative with the highest value
Such as highest expected profit, customer satisfaction, employee wellbeing or some combination of these outcomes.

Subjective expected utility: the probability (expectation) of satisfaction (utility) resulting from choosing a specific alternative in a decision.
Decision making process: systematic application of stages of decision making. 1. Identify problem or opportunity 2. Choose the best decision process 3. Develop alternative solutions 4. Choose the best alternative 5. Implement the selected option 6. Evaluate decision outcomes

Problem with Rational choice paradigm: 1. Impossible to apply in reality 2. Difficulty recognising problems 3. Process the huge volume of information 4. Difficulty recognising when choices have failed 5. Focusing on logical thinking, ignores emotion influence making decision

IDENTIFYING PROBLEMS AND OPPORTUNITIES
Explain why people have difficulty with it
Problem identification is not just the first step in decision making: it is the most important
There are five most widely recognised concerns.

Stakeholder framing: attention-based theory of the firm: states that, organisational decisions and actions are influenced mainly by what attracts management’s attention, rather than by objective reality.
Mental mode: if an idea does not fit the existing mental mode of

You May Also Find These Documents Helpful

  • Better Essays

    Decision making is defined as "the cognitive process leading to the selection of a course of action among alternatives" (Decision Making, 2006, para. 1). Decisions are made continually throughout our day.…

    • 1604 Words
    • 7 Pages
    Better Essays
  • Better Essays

    The decision making process is figuring out what values and or obligations are important to you, and base your decision on what is right not what is best (Trevino & Nelson, 2011).…

    • 449 Words
    • 2 Pages
    Better Essays
  • Good Essays

    Decision making is when the financial manger makes choices among available alternatives. Decision making actually occurs parallel to planning, organizing, and controlling. All types of decision making rely on information, and the primary tasks are analysis and evaluation. The purpose is to make informed choices (Baker and Baker, 2001).…

    • 978 Words
    • 4 Pages
    Good Essays
  • Better Essays

    Decision-making is defined as making choices that improve the current situation by moving towards a goal, and the rational choice paradigm is a view of decision-making that people should use ethical reasoning and all the available information to make the best choices for the greater good. (McShane, Steen, & Tasa, 2015).…

    • 1004 Words
    • 5 Pages
    Better Essays
  • Good Essays

    Decision making refers to “making choices among alternative courses of action—which may also include inaction”. In order to make a wide range of decisions, individuals throughout organizations use the information they gather. These decisions will then change the course of an organization, as well affect their lives. Making successful decisions is certainly the most important task of a manager and it is often a very difficult one. Success may be defined as “the achievement of something desired, planned, or attempted”. In order a decision to be successful, a company should make sure that they make the best choice by going through the formal steps of the rational decision-making model. The rational decision-making model describes “a series of steps that decision makers should consider if their goal is to maximize the quality of their outcomes”. This is the main difference between a successful and an unsuccessful decision; by not considering these decision-making models, a company’s goal can fail just because they do not go through the necessary steps which are: Identifying the problem, establishing decision criteria, weigh decision criteria, generate alternatives, evaluate the alternatives, choose the best alternative, implement the decision, and evaluate the decision (Steps in the Rational Decision-Making Model).…

    • 594 Words
    • 3 Pages
    Good Essays
  • Better Essays

    The first major Theory was The Expected Utility Theory, which indicates that individuals are likely to choose the decision that is the most valuable, but although this is true, this theory can account for unnecessary risk taking, which in turn can cause an unwanted outcome. The Prospect theory on the other hand accounts for certain biases within decision making however this does not take into account other aspects of decision making, such as the probability and other potential influences. The Social Functionalist Approach also shows that individuals are likely to feel pressured to make certain decisions, this may indicate that they are not making a decision based on what they believe, but rather what other people perceive as the correct decision. The Expected Utility Theory and Prospect Theory do show that although humans do appear to be rational decision makers in some sense, although this is not always the case, as there can be many things that can influence an individual’s decision, and due to this it is not possible to determine whether or not humans are indeed rational decision makers based entirely on…

    • 1302 Words
    • 6 Pages
    Better Essays
  • Good Essays

    The decision making process has many phases. Start out with a current situation (unexpected or expected behavior), which is impacted, by the situation at hand and the changing world around us and then we through in the external noise and the internal noise. Now we have a multitude of information, social, cultural, economical and…

    • 545 Words
    • 3 Pages
    Good Essays
  • Good Essays

    The first step in the decision making process is to identify the problem. Although in this process the first step is labeled as identifying the problem, there is also a potential that it could be identifying an opportunity as well. When considering this process, step one is the most important step, as correctly identifying the opportunity or problem can have significant rewards to the organizations. Likewise inaccurately identifying the problem can provide dire consequences. This step is the foundation in creating courses of actions or plan development, good communication in identifying the problem or opportunity step will provide a…

    • 932 Words
    • 4 Pages
    Good Essays
  • Better Essays

    The definition of decision making according to Wikipedia is "the cognitive process of selecting a course of action from among multiple alternatives" (2006, ¶ 1). Every decision made creates a final choice. Decision making begins when one needs to accomplish something but is unsure how. Decision making can be a rational or irrational reasoning process (Wikipedia, 2006).…

    • 1431 Words
    • 5 Pages
    Better Essays
  • Satisfactory Essays

    Decisions Decisions

    • 433 Words
    • 2 Pages

    Decision making is the process of choosing a course of action to deal with a problem or opportunity. (206). The process is usually done in steps this is called the rational decision model. . Defining the problem, analyze alternatives’, make choices, take action and evaluate results.…

    • 433 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Decision making is a mental or behavioral commitment to a course of action. In a broader sense, the term “decision making” denotes an information-processing activity of a single decision maker, or of multiple decision makers, that begins with the recognition of a choice situation and ends with the implementation of the choice and the monitoring of its effects (Decision Making, 2004)…

    • 417 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    I also understand that for some people decision making can be a problem! But that does not mean that they are the same thing. So my descriptions and ideas below keep these things separate.…

    • 617 Words
    • 3 Pages
    Satisfactory Essays
  • Better Essays

    Organisational Behaviour

    • 1472 Words
    • 6 Pages

    “Political Activity is alive and well in organisations. Critically discuss this statement. What factors result in Organisational Politics and what is the role of such behaviour on other people at work?”…

    • 1472 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    The decision process begins by precisely defining the problem or opportunity, along with the objectives and constraints.[4] Next, the possible decision factors that make up the alternative courses of action (controllable factors) and uncertainties (uncontrollable factors) are enumerated. Then, relevant information on the alternatives and possible outcomes is collected. The next step is to select the best alternative based on chosen criteria or measures of success. Then a detailed plan to implement the alternative selected is developed and put into effect. Last, the outcome of the decision and the decision process itself are…

    • 4276 Words
    • 18 Pages
    Powerful Essays
  • Good Essays

    Individuals make decisions based on the concept of utility. In other words, the decision made by the individual is supposed to increase that individual's happiness or satisfaction. This concept is called rational behavior or rational decision-making.…

    • 746 Words
    • 3 Pages
    Good Essays