MGT 212

Making Decisions
 Decision

A choice among two or more alternatives

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Rational Decision Making Model

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Bounded Rationality

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Intuition

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 Crowdsourcing
Relying on a network of people outside the organization’s traditional
set of decision makers to solicit ideas via the internet

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Organizational Factors affecting
Decision Making

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Organizational Factors affecting
Decision Making

Organizational Power and Politics

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Organizational Factors affecting
Decision Making

Escalation of Commitment
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Organizational Factors affecting
Decision Making

Space Shuttle ‘Challenger’

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Organizational Factors affecting
Decision Making

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 Types of Decisions
Structured Programmed
Problems Decisions

Procedures Rules Policy

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 Types of Decisions
Unstructured Non-
Problems programmed
Decisions

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Decision Making Styles

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Decision Making Biases and Errors
(Heuristics)

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 Heuristics
Rule of Thumb

Daniel Kahneman Amos Tversky

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Overconfidence Bias

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Immediate Gratification Bias

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 Anchoring Effect

8x7x6x5x4x3x2x1

2250
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 Anchoring Effect

1x2x3x4x5x6x7x8

512
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Anchoring Effect
The Correct Answer

40,320
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Anchoring Effect

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Selective Perception

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Selective Perception

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Confirmation Bias

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Framing Bias

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Framing Bias

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Availability Bias

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Availability Bias

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 Representation Bias
Business: 25%

Computer Science: 7%

Engineering: 9%

Humanities and Education: 20%

Law: 5%

Library Science: 1%

Medicine: 9%

Physical and Life Sciences: 10%

Social Science and Social Work: 14%

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 Representation Bias
Sohan is of high intelligence, although lacking in true
creativity. He has a need for order and clarity, and for neat
and tidy systems in which every detail finds its appropriate
place. His writing is rather dull and mechanical, occasionally
enlivened by somewhat old fashioned jokes and flashes of
imagination of the sci-fi type. He has a strong drive for
competence. He seems to have little feel and sympathy for
other people and does not enjoy interacting with others. Self-
centered, he nonetheless has a deep moral sense.

The preceding personality sketch of Sohan was written when

he was in Class 8 by a psychologist using an internet based
personality test. Sohan is currently a graduate student.

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 Representation Bias

Which subject do you think Sohan

studies in?

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Randomness Bias

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Sunk Cost Error

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Self-Serving Bias

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Hindsight Bias

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Cutting Edge Approaches for Improved
Decision Making
Design Thinking

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Cutting Edge Approaches for Improved
Decision Making
Design Thinking

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Cutting Edge Approaches for Improved
Decision Making
Big Data

Artificial Intelligence

Machine Learning

Deep Learning

Business Analytics

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