1. Decision making is easy, given that everybody makes decisions everyday.
2. Decision-making must not be done amid ever-changing factors, unclear information, and conflicting points of view.
3. A choice made from available alternatives is called a decision.
4. Programmed decisions are decisions that are made for situations that have occurred often in the past and allow decision rules to be developed to guide future decisions.
5. Two employees in Jessies department quit. She is faced with the decision to fill these positions. This would be considered a nonprogrammed decision.
6. Garys Groceries and Mikes Market decided to merge their operations. This would be considered a nonprogrammed decision.
7. In 1999, WorldCom, a telecommunications company, decided to buy Skytel. This would be considered a programmed decision.
8. Programmed and structured are the two classifications of management decisions.
9. Uncertainty means that a decision has clear-cut goals, and that good information is available, but the future outcomes associated with each alternative are subject to chance.
10. The main difference between risk and uncertainty is that with risk you know the probabilities of the outcomes.
11. Uncertainty is by far the most difficult decision situation.
12. Ambiguity refers to a situation where the goals to be achieved or the problem to be solved is unclear, alternatives are difficult to define, and information about outcome is unavailable.
13. The classical decision making model assumes that the decision-maker is rational, and makes the optimal decision each time.
14. Normative means it defines how a decision maker should make decisions.
15. The political model represents an “ideal” model of decision making that is often unattainable by real people in real organizations.
16. Normative decision theory recognizes that managers have only limited time and cognitive ability and therefore their decisions are characterized by bounded rationality.
17. Satisficing behavior occurs when we choose the first solution alternative that satisfies minimal decision criteria regardless of whether better solutions are expected to exist.