Well-Structured Problem
Existing state is clear, desired state is clear, how to get from one state to the other is clear.
- solutions + problem is simple
- familiar and repetitive problems
- non controversial solutions
Ill-Structured Problem
Existing state unclear, desired state unclear, how to get from one state to the other is unclear.
- unique + unusual problems and solutions
- complex
- high degree of uncertainty
- controversy + conflict arises
Intuition in decision making
good for generating alternative solutions… BUT not reflective enough
Non-rational decision making
Not using a model that involves multiple steps when making a decision
Rational Decision-Making Model
- Identify Problem
- Search for relevant information
- Develop Alternative Solutions to Problem
- Evaluate Alternative Solutions to Problem
- Choose Best Solution
- Implement Chosen Solution
- Monitor and Evaluate Chosen Solution
What is Framing?
The aspects of presentation of information about a problem that are assumed by decision makers
- How problems and decision alternatives are framed can have a powerful impact on resulting decisions!
Information biases of confirmation
Tendency to seek out information that CONFORMS to one’s own definition/solution to a problem.
Availability
Using whatever information is readily available, and the tendency to be overconfident which is exacerbated by confirmation bias
Not-invented-here Bias:
Tendency to ignore or have negative feelings toward ideas outside of your own organization or project team
Analysis Paralysis
When an action or solution cannot be decided in a NATURAL TIME FRAME because of overanalyzing and the decision making becomes paralyzed
Base Rates
The tendency to avoid incorporating existing data about the likelihood of events into their decision
Satisficing
When a decision maker establishes an ADEQUATE LEVEL OF ACCEPTANCE until they find a solution that exceeds this level.
Prospect Theory
- People tend to seek RISK to avoid LOSS
- People tend to avoid RISK to hold GAIN
Implementation of Solutions
- Solutions need to be implemented
- Problems occur when the one who is implementing the solutions is not the one who made the decision! (conflict, confusion, etc)
Escalation of commitment (to a losing action)
Throwing good resources after bad course of action, acting as if costs can be recouped.
Personality, mood, and emotions can affect escalation
Name three other Decision Biases
- Functional Fixedness: The limit set on a person when they only see an object to be used in its traditional way.
- Survivorship Bias: Concentrating on entities that passed a selection process while overlooking those that did not (successful business man dropping out of college)
- Ziegarnik Effect: An interruption of a task can help remember it better
What is “Test your Thinking”
A test to find out how much you rely on each mode of thinking: Intuitive System 1 or Deliberate System 2
- A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost
- If it takes 5 machines 5 minutes to make 5 widgets, how long would it take 100 machines to make 100 widgets?
- In a pond is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire pond, how long would it take for the patch to cover half the pond?
What is Group Think?
When group pressure damages MENTAL EFFICIENCY, REALITY TESTING, and MORAL JUDGEMENT of decision-making groups.
What are the four disadvantages of group decision-making?
- Time: more people in a group, more time it takes to meet up etc. PROCESS LOSSES
- Conflict: POLITICAL WRANGLING and INFIGHTING takes over quality decisions
- Domination: An individual or small group can dominate the meetings
- Group Think: When group pressure damages mental efficiency, reality testing, and moral judgement in decision-making groups
What are the 5 factors that cause Group Think?
- High group cohesiveness
- Strong identification with the group
- Concern for approval
- Isolation from other info outside of the group
- The promotion of particular decision by the group leader (most common cause)
What are the 8 Group Think Symptoms?
- Illusion of Invulnerability
- Illusion of Morality
- Rationalization
- Stereotyping outsiders
- Pressure of Conformity
- Self-censorship
- Illusion of Unanimity (consensus)
- Mind Guards: protecting the group from outside info that goes against decision
Crowd Sourcing
Outsourcing aspects of a decision process to a large collection of people (diverse group of people: either decide on single superior solution or on average will decide on the correct solution)
When is crowd sourcing best employed?
- in-house expertise is lacking
- the nature of the problem can be clearly stated
- a large + diverse crowd is knowledgeable and motivated to participate
