Decision Making Assignment Essay
dfaert
powerpoint_for_reference.pptMAN3503: Week 2
Elements of Decision Making
Objectives
- To review & convey an understanding of:
- Activities for this week
- Another process
Decision-making abilities
The Problem
Objectives
- Conclusion
Activities This Week
Required Reading: Books
- Books:
- “Strategy” refers to Strategies for Creative Problem Solving 2nd Ed. By Fogler and LeBlanc
- “Smart” refers to Smart Choices by Hammond, Keeney and Raiffa
- “APA Manual” refers to the APA Publication Manual from the American Psychological Association.
Required Reading Preparation
- Read the following first:
“Smart” Chapter 10: Psychological Traps
“Smart” Chapter 11: The Wise Decision Maker
Then
“Smart” Chapter 2: Problem
“Smart” Chapter 3: Objectives
Enablers and Inhibitors
- Decision Making
- A “soft side” (introduced last week)
- “Smart” chapters 10 and 11 focus on the decision maker
- “Smart” chapters 2 and 3 bridge to techniques
- Later lectures will focus on specific process approaches
The Process from last week
Define Problem /
Objective
Get data, options,
Risks, prioritize
Evaluate, assess,
Select: Decide
Implement the
decision
Evaluate & improve:
current & future
The Past
AND
the Future
An Alternative Approach
- Decision-making Abilities (traps and being wise)
- Problem
- Objectives
- Alternatives
- Consequences
- Tradeoffs
- Uncertainty
- Risk Tolerance
- Linked Decisions
PrOACT
- Problem
- Objective
- Alternatives
- Consequences
- Tradeoffs
- Uncertainty
- Risk Tolerance
- Linked Decisions
Abilities: A Broader View 1
- Anchor Trap
- Include perceptions, popular views, influence from mass media, limitation based on historic input / views
- The Status Quo trap
- Reluctance to change in the decision maker (also happens in execution and team building)
Abilities: A Broader View 2
- Sunk-Cost
- A Problem – admit defeat, avoid good money after bad, consider marginal return – not only historic investment loss.
- Confirming Evidence & Framing
- Filtering input (often unaware of this fact), group-think, encourage dissent, list positive AND negative items
- Leading questions, positive or negative view (is this glass half-full or half-empty?)
- Make sure you use consistent measures
Abilities: A Broader View 3
- Over-confidence, Pessimistic, Bias
- Consider stock prices – average, high and low – big diversions imply risk and room for inaccuracy (Consider how you could report the data below) from www.nasdaq.com
Abilities: A Broader View 4
… and prudence
- Too much care or optimism – stick with the data, do not pre-interpret or slant data.
- Recallable Items
- A few big events obscure the majority that are normal – sensationalism
- Base rate
- Beware of “stacking” data and probabilities
Abilities: A Broader View 5
- Random is random! Or ?
- Computer techniques can help a lot (Monte Carlo method)
- Preparations can alter reality
- UNCTAD conference example
- Rare may not be unlikely
- Birthday and socks examples
Abilities
- Wise
- Experience
- Processes and procedures
- History
- Procrastination
- Focus
- Complexity – summary, filter, bundle
- Fast vs. thorough
- Ethics, values, governance, principles
Problem
- Problem: An issue or difficulty that needs a solution. It has occurred or a known future event that must be avoided. The assumption is a that it is definite or likely, not probable
- Often a foundation – foundations are normally most crucial portion of any exercise …
often obscured soon after the start …
Problem
- Half-full?
- Can you measure it?
- Good or bad?
- Is it apple juice? Wine?
- Does it matter? Do you care? Anyone cares?
- What does it impact?
- Can you get more?
- Will it impact something else?
- What about the future?
- Is it expensive
- Does it age
Do you care?
Conclusion
- Added PrOACT as another process approach
- Considered decision making abilities
- Elements that allow of better decision & traps
- The need to understand what your decision is about (problem or risk)
- Know where you want to go (objectives, values)
- Week 1: Aims and stakeholders are relevant too.
