Title: Managers as Decision Makers
1Managers as Decision Makers
- Why is skilled decision making so important for
managers?
2Managers as Decision Makers
- Do we make good decisions?
- Theme of Webcast there is a rational model, but
we often deviate from it. - Blink?
3Improving our Decision Making
- Under what decision conditions do we make
decisions? - Is the goal certainty?
- Move from uncertainty to risk via information
uncovered by a useful process plus an appropriate
reference to personal experience.
4Failure to See Information
- Most decision problems come not from a lack of
information, but from the failure to identify and
use the information already available to us.
5Failure to See Information
- We make perceptual mistakes and attribution
errors. - Perception how accurate are our senses?
- Attribution how accurately do we interpret the
events we perceive?
6Failure to See Information
- Can we improve our abilities to recognize and use
the information we already have? - Buy an outsiders perspective.
7Group Decision Making
- Based on advantages of group decision-making
- more information and knowledge
- generate more alternatives
- critical evaluation of ideas
- increased acceptance of decision
- increased legitimacy of decision
8Failure to Seek Information
- Do we attempt to find the most useful
information?
9Confronting the Brutal Facts
- Stockdale Paradox
- Retain absolute faith that you can and will
prevail.. and - Confront the most brutal facts in your current
reality. - The belief to seek and hear all the news.
10Group Conformity Pressures
- Groupthink Process in a group where finding the
truth is replaced by a consensus at all costs
mentality.
11Avoiding Conformity Pressure
- Facilitative Leadership
- Decision-Making Tactics to bring in conflict in
the face of conformity pressure - Debate
- Devils Advocate
- Nominal Group Technique
12Develop Psychological Hardiness
Anxiety Worry Defensive
In the Flow Active Engagement Highest
Performance
Degree Of Challenge
Competent Basic Performance
Boredom Apathy Disengagement
Degree of Skill/Competence
13Decision Making Under Uncertainty
- When we lack sufficient information, we tend to
follow our personal styles when making decisions. - To illustrate, consider a payoff matrix
14Payoff Matrix
Fast Food
Italian
Mexican
Chinese
Bar
15Decision-Making Conditions
- Certainty pick the alternative with the known
highest payoff. - Risk Sum the payoffprobability.
- Uncertainty Personal style takes over.
16Styles in Uncertainty
- Maximax Optimist - Maximize the Maximums
- Choose highest payoff possible.
- (22, 17, 31, 24, 14)
- Maximin Pessimist - Maximize the Minimums
- Choose the best of the worst options.
- (8, 13, 4, 11, 12)
17Styles in Uncertainty
- Minimax Minimize the maximum degree of regret
for your choice. - Regret table How much could you regret your
choice? - Per situation, what are the differences between
what you got and what you could have gotten? - Per alternative, which alternative has the lowest
maximum degree of regret.