Principles of Marketing Ch 9

Programmed Decisions (2)
reoccurring problems
apply rule
Nonprogrammed Decisions (4)
unique situations
poorly defined
unstructured
important consequences
Certainty
situation in which all information is fully available
Uncertainty
depends on the amount and value of information available
Ambiguity
making decisions in difficult decisions
Rational Decision Making Model (4)
problem defined
alternatives evaluated
select alternative with maximum benefit
decision maker is rationale and uses logic
Administrative/Descriptive Apporach (2)
how managers really make decisions
Recognize human and environmental limitations
Bounded Rationality
people have limits or boundaries on how rational they can be
Satisficing
choosing the first solution that satisfies minimal decision criteria
Steps in the Administrative Model (4)
goals vague
rational procedure not used
managers’ search for alternatives are limited
most managers settle for satisfaction
Intuition
quick apprehension of situation based on practice and experience
Political Decision Making Model (3)
decisions involve managers with diverse interests
Managers must engage in coalition building (alliance to support)
Political Model resembles the real environment
Steps in the Political Model (4)
diverse & conflicting goals
information is ambiguous or incomplete
lack of time / resources to process all info for a problem
decisions are bargaining and discussion among coalition membrz
Steps in the Managerial Decision Making Process(6)
recognize a decision needed
analyze underlying factors
define alternatives
select alternative w/ most desirable outcome
implement chosen outcome
evaluate and gather information on effectiveness of decision
Personal Decision Framework has what 3 categories?
Situation + Personal Decision Style = Decision choice
Directive stlye
managers who like a simple, clear-cut solutions to problems
Analytic style
managers who prefer a complex solutions based on a lot of data
Conceptual style
managers who like a broad amount of information
Behavioral style
managers with a deep concern for others
why do managers make bad decisions? (6)
influenced by initial impressions
justifying past decisions
seeing what you want to see
perpetuating the status quo
being influenced by problem framing
overconfidence
Innovation Decision Making (6)
brainstorming
use hard evidence
engage in rigorous debate
avoid groupthink
know when to bail
do a post decision evaluation