Evidence Based Decision Making

Question 1

What are the decision making models?

Answer 1

• Economic Choice (Rational Choice)

* Bounded Rationality

Question 2

What is the rational choice decision making model?

Answer 2

• Decision maker is economic person whose preferences are aligned with organisational objectives
• Decision maker will make the optimal choice that will maximise their utility
• Perfect information about all alternative and corresponding outcomes
• Decision maker has the capacity to estimate the expected value of each alternative

Question 3

What is the bounded rationality decision making model?

Answer 3

• It is not possible for a decision maker to exploit all alternative in achieving organisational objectives given cognitive limitations
• It is necessary to make the act of choice a rational one based on the object and an alternative that promises to meet the objective, a satisfying decision

Question 4

What is Hambrick and Mason’s model of strategic choice under conditions of bounded rationality

Answer 4

Managerial perceptions that determine strategic choices are outcomes of selective perception, interpretation and a limited field of vision which become combined with the cognitive base and values of the decision maker

Question 5

What are the perceptual/judgement errors?

Answer 5

• Recency/availabilty heuristic
• Hindsight
• Over-generalisation
• Attribution
• Correlation vs Causation
• Halo
• Stereotyping
• Sunk cost
• Illusion of manageability

Question 6

What is the recency/availability heuristic perceptual/judgement error?

Answer 6

• Not looking back far enough
• Easier to get the latest info
• Opposite - latency

Question 7

What is the hindsight perceptual/judgement error?

Answer 7

Seeing past events as having been predictable when they were not

Question 8

What is the attribution perceptual/judgement error?

Answer 8

Only certain factors considered - others ignored

Question 9

What is the halo perceptual/judgement error?

Answer 9

Positive feelings in one area cause ambiguous or neutral traits to be viewed positively

Question 10

How are perceptual/judgement errors best avoided?

Answer 10

• Awareness of cognitive limitations and bias

- Ongoing education in the scientific method - on reliability and validity

Question 11

In general what is reliability?

Answer 11

• The consistency of measurement from one test/instrument to another
• Reliability is a function of methods
• More applied to quantitative research
• Qualitative research instead attempts to establish the rigour of the research; focus on soundness and dependability

Question 12

In general what is validity and what are the different types?

Answer 12

• The appropriateness of our definition and measure
• Face validity
• Content validity
• Criterion validity
  
  • Concurent validity
  • Predictive validity
• Convergent validity
• Discriminant validity
• Construct validity

Question 13

What is face validity?

Answer 13

Face validity - A scale’s content logically appears to reflect what was intended to be measured

Question 14

What is content validity?

Answer 14

Content validity - The degree to which a measure covers the bredth of the domain of interest

Question 15

What is criterion validity?

Answer 15

• Criterion validity - The ability of a measure to correlate with other standard measures of similar constructs or established criteria i.e. the practicality of the measure, does it work in practice
  • Concurent validity - if the new measure is taken at the same time as the criterion measure and is shown to be valid
  • Predictive validity - if the new measure predicts a future event

Question 16

What is convergent validity?

Answer 16

Convergent validity - Concepts that should be related to one another are in fact related; highly reliable scales contain convergent validity

Question 17

What is discriminant validity?

Answer 17

Discriminant validity - Represents the uniqueness or distinctiveness of a measure; a scale should not correlate too highly with a measure of a different construct

Question 18

What is construct validity?

Answer 18

Construct validity - Exists when a measure reliably measures and trigly represents a unique concept; consists of all other validity

Question 19

How do reliability and validity affect our understanding of a phenomenon?

Answer 19

• Without ascertaining the validity and reliability, hypothesis cannot be tested
• Without hypothesis testing, the theory cannot be verified or validated
• Without a theory we cannot understand or explain a phenomenon

Question 20

What is triangulation?

Answer 20

• Studying phenomenon under investigation from more than one perspective
• Theoretical or methodical

Question 21

What is EBM?

Answer 21

The conscientious, explicit and judicious use of valid and reliable evidence or knowledge in making managerial decisions

Question 22

How is EBM practiced?

Answer 22

• Demand validate and verifiable empirical evidence
• Interrogate logic and assumptions
• Interrogate sampling
• Continous learning
• Experimentation & pilot studies
• Decisions have to be carefully implemented

Question 23

What are Rousseau’s types of evidence?

Answer 23

• Big E evidence
  
  • Generalisable and nomothetic and derived from the scientific method
  • Derived predominantly from quantitative research methods such as experiments and surveys
• Little e evidence
  
  • Organisation specific
  • Idiographic
  • Derived from small samples of data including qualitative data from interviews

Question 24

What are the main challenges of EBM?

Answer 24

• Social networks and organisational culture are critical to the practice of EBM
• Only as good as its implementation and calibration (feedback process and allowance for redesign)
• Managers need access to information-sharing community of experts