6: Perception and Decision Making

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a3256abc590c77cfb6efa57ec236f742ef4db5ee — Exhibit **6.1** (i_yudai/ flickr/ Attribution 2.0 Generic (CC BY 2.0))

Learning Outcomes

After reading this chapter, you should be able to answer these questions:

What are the basic characteristics of managerial decision-making?
What are the two systems of decision-making in the brain?
What is the difference between programmed and nonprogrammed decisions?
What barriers exist that make effective decision-making difficult?
How can a manager improve the quality of her individual decision-making?
What are the advantages and disadvantages of group decision-making, and how can a manager improve the quality of group decision-making?

6.1: Overview of Managerial Decision-Making
This page covers the entrepreneurial journey of Jen Rubio and Stephanie Korey, co-founders of Away, focusing on their market strategy, decision-making processes, and the importance of adapting to new insights. It underscores the complexity of managerial decisions, ethical implications, and the need for long-term thinking beyond profit maximization.
6.2: How the Brain Processes Information to Make Decisions- Reflective and Reactive Systems
This page discusses two systems of decision-making in the brain: the reflective system, which is logical and engages the prefrontal cortex, and the reactive system, which is quick and intuitive, involving the basal ganglia and amygdala. Quick decisions may work well in familiar contexts, but complex situations often benefit from reflective thought.
6.3: Emotional Intelligence
In this module, we review the construct of emotional intelligence by examining its underlying theoretical model, measurement tools, validity, and applications in real-world settings. We use empirical research from the past few decades to support and discuss competing definitions of emotional intelligence and possible future directions for the field.
6.4: Programmed and Nonprogrammed Decisions
This page explains the difference between programmed and nonprogrammed decisions in management. Programmed decisions are routine and based on established rules, enabling faster choices, while nonprogrammed decisions are unique and require thorough judgment due to ambiguity. The nonprogrammed decision-making process involves six structured steps for systematic evaluation, contrasting with the quicker, heuristic-based approach of programmed decisions.
6.5: Barriers to Effective Decision-Making
This page outlines barriers to effective decision-making such as bounded rationality, escalation of commitment, time constraints, uncertainty, personal biases, and conflict. It emphasizes the limitations of decision-makers and the impact of biases on judgment.
6.6: Improving the Quality of Decision-Making
This page emphasizes enhancing managerial decision-making through structured techniques for both programmed and nonprogrammed decisions, highlighting the importance of experience and critical thinking. It outlines logical fallacies that can obstruct effective choices and stresses ethical considerations, including a model for evaluating moral components.
6.7: Group Decision-Making
This page discusses group decision-making, highlighting its benefits like reduced bias and increased options, while also noting challenges such as conflict and groupthink. Effective management strategies include promoting diversity, encouraging participation, using a devil's advocate, and facilitating common ground to mitigate issues.
6.8: Glossary
This page covers decision-making concepts in organizations, highlighting stakeholder roles, emotional intelligence, and decision systems (reactive vs. reflective). It differentiates between programmed and nonprogrammed decisions and discusses cognitive biases such as confirmation bias and escalation of commitment. The page also emphasizes the significance of conflict types in groups, as well as creativity, critical thinking, and evidence-based methods.
6.9: Summary of Learning Outcomes
This page covers managerial decision-making, emphasizing its complexity and the presence of incomplete information. It differentiates between programmed decisions, which follow clear guidelines, and nonprogrammed decisions that require creativity and data gathering. The page discusses barriers to effective decision-making, including cognitive biases, and offers methods to enhance decision quality.
6.10: Chapter Review Questions
This page explores decision-making factors in the success of Jen Rubio and Stephanie Korey's luggage company, Away. It explains the intuitive and analytical brain systems and their relation to programmed and nonprogrammed decisions. Key concepts include heuristics, confirmation bias, logical fallacies, and types of conflict.
6.11: Management Skills Application Exercises
This page emphasizes the significance of research and emotional influences in decision-making, both personally and in management. It advocates for reflection on past choices and the advisory role during ethical challenges. The distinction between programmed and nonprogrammed decisions is highlighted, showcasing the value of group input in complex scenarios.
6.12: Managerial Decision Exercises
This page covers management scenarios focusing on decision-making and team dynamics, addressing conflict resolution, the significance of market research for European expansion, and strategies to overcome resistance to change. It also emphasizes team selection criteria for creative projects and critiques logical flaws in associating height with leadership ability.
6.13: Critical Thinking Case
This page discusses the resurgence of vinyl records, which are gaining popularity due to nostalgia and superior sound quality. Sales have significantly increased, projected to exceed $5 billion in 2017. Although production faces challenges from outdated equipment, new manufacturers are emerging. Established companies like GZ Media continue to invest in new technology, fostering optimism.

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