1. Identifying the problem: using historical clues, using projection or scenarios, or relying on the perceptions of others.

2. Generating alternative solutions: decision rules if routine - creative way for unstructured decisions.

3. Selecting a decision: with the greatest value - maximizing the expected utility of an outcome.

4. Implementing and evaluating the decision: if efficiect, the solution should reduce the difference between the actual state and the desired state that created the problem.

5. Summarizing the rational model: optimizing - solving problems by producing the best possible solution.

1. Defining the problem: people often don't agree as to the definition of the problem, symptoms are often confused with the real problem.

2. Generating alternatives: usually evaluated one at a time, people offer the same old solutions - they worked in the past.

3. Evaluate and select alternatives: limited information about the alternatives, emotions often come into play, and gathering information is costly and time-consuming.

4. Implement and follow up: politics play a role, people hate change, and it takes a long time to follow up.

What do the following terms mean?:

1. Optimizing

2. Bounded rationality

3. Satisficing

1. Choosing the best possible solution

2. Constraints that restrict rational decision making: limited capacity of the human mind, problem complexity and uncertainty, amount and timliness of information at hand, criticality of the decision, and time demands

3. Choosing a solution that meets a minimum standard of acceptance, one that is "good enough"

1. Availability heuristic: decision maker's tendency to base decisions on information that is readily available causes people to overestimate the occurrence of likely events.

2. Representative heuristic: when people estimate the probability of an event occurring.

3. Confirmation bias: 1)subconsciously decide something before investigating why it is the right decision 2)seek information that supports our point of view and discount that which does not

4. Anchoring bias: decision makers are influenced by the first information received about the decision, even if it is irrelevant.

5. Overconfidence bias: overconfident about estimate of forecast - particularly strong when asked to moderate extremely difficult questions rather than easy ones

6. Hindsight bias: when knowledge of an outcome influences our belief about the probability that we could have predicted the outcome earlier

7. Framing bias: relates to the manner in which the question is posed - tendency to consider risks about gains differently than risks pertaining to losses

8. Escalation of committment bias: tendency to stick to an ineffective course of action when it is unlikely that the bad action can be reversed.

The tendency to repeat an apparently bad decision or allocate more resources to a failing course of action.

Caused by: self justification (don't want to look bad), gambler's fallacy (underestimate risk and overestimate probability of success), perceptual blinders (screen out negative information), and closing costs (financial and political).

1. Vertical thinking: defining a problem one way without considering alternative views

2. Compression: distinguishing figure from ground - not filtering out irrelevant info or finding necessary info

3. Artificial constraints:

4. Stereotyping: Based upon past experience - present problems are seen only as varitations of past problems

5. Complacency: lack of questioning, bias against thinking

1. The tendency of highly cohesive groups to value consensus at the price of decision quality.

2. Symptoms include: invulnerability (illusion that breeds excessive risk taking), inherent morality (belief that encourages the group to ignore ethical implications), rationalizing (protects pet assumptions), stereotyped views of opposition (causes group to underestimate opponents), self-censorship (stifles critical debate), illusion of uninamity (silence interpreted to mean consent), peer pressure (loyalty of dissenters is questioned), and mindgaurds (self-appointed protectors against adverse information)

1. Defer judgment

2. Build on the ideas of others

3. Encourage wild ideas

4. Go for quantity over quality

5. Stay focused on the topic

6. Be visual

7. One conversation at a time; no interrupting

NGT: is face-to-face group discussion where participants generate ideas and evaluate and select the solutions. Each individual writes down their solution and then a stage of clarification takes place (30 second rule) and finally, members secretly vote for their top choices.

Delphi technique: is done impersonally; ideas are generated by physically dispersed experts through Internet questionaires or emails. This technique is useful when face-to-face discussions are impractical, when disagreements and conflict are likely to impair communication, when certain individuals might severly dominate group discussion, and when groupthink is likely to occur

1. Reverse the definition

2. Ask employees to combine related and unrelated attributes to the problem

3. Expand current alternatives or divide them into subcategories

4. Do the "tell-me-stranger" technique

5. Pull people apart and put them in another group

6. Electronic brainstorming

7. Delphi technique or nominal group technique

8. Ringi technique: idea from subordinate gets passed upward

9. Encourage wild ideas and then take the idea and isolate the underlying concept. Adopt another point of view.

Conflicts are not always bad. They can determine team cohesion, information sharing, decision-making, and employee well being. This prevents the organization from stagnating and becoming nonresponsive to the external environment.

1. Constructive conflict is when people focus their discussion on the issue while maintaining respect for other perspectives

2. Relationship conflict is when people focus on characteristics of individuals rather than on the issue and the source of the conflict.

1. Forcing (win/lose): can only be used a few times; its better to risk a few hard feelings than abandon an issue.

2. Yielding/Accomodating (lose/win): let the other person have their way, people often get stepped on. Use it when you are wrong.

3. Compromising: balance between domination and appeasement, both parties give up something but gain something in return.

4. Avoidance (lose/lose): reflects a withdrawl from or neglect of any party's interest. Might be used if the issue is trivial.

5. Problem solving/Collaborative (win/win): reflects an effort to satisfy both parties; requires integration of both parties' concerns. Based on integrity, maturity, abundance mentality, and trust.

1. Target point represents a negotiator's most preferred or ideal agreement.

2. Reservation point: point at which a negotiator is indifferent to reaching a settlement or walking away from the deal; you have to figure out what is your Best Alternative to a Negotiated Agreement (BATNA)

1. Integrative bargaining: occurs when it is possible to produce a greater outcome together than either could reach on his own. It is used when parties have a relationship or want to build one and when cooperation benefits both parties. Often used with between families and business partners.

2. Distributive bargaining: appropriate in "divide the pie" situations where there is a fixed amount of resources and whatever one party gains, the other loses. Often used when parties do not know each other and don't believe that they will need to develop a relationship. This is what we usually encounter when we make a purchase.

**Establish super-ordinate goals, focus on what you share in common, separate the people from the problem, focus on interests, not positions, invent options for mutual gains, use descriptive bargaining, define success in terms of gain not loss

1. Know your target price

2. Know your reservation point

3. Determine your BATNA

4. Read the other party's needs

5. Think about the best way to position and present your opening (counter) offer

6. Talk to others who have negotiated with other party to get a feel for their team

7. Be aware that the opposition might have a hidden agenda

1. Try to establish a personal bond

2. Stress the need for agreement from the outset

3. Listen first. Speak later.

4. Don't get emotional

5. Begin with non-controversial, general points

6. Take notes on what has been agreed upon

7. Watch for body language an the other person's tone of voice

Negotiating:

1. The ideal first offer should just exceed the other party's reservation point.

2. Whenever the party has more information than you, let them make the first offer

3. The counteroffer should be reasonable and timely

4. Negotiations should provide justifications and rationales for their proposals

5. It is important to make concessions

6. It is important to bargain in good faith

1. Reciprocation; people feel obligated to return favors.

2. The Liking Principle: flattery can get you anywhere

3. Authority: use of actors and athletes to advertise products

4. Scarcity principle: we prefer things that are rare and in high demand

5. Reverse psychology technique:

6. Consistency: people feel the need to be consistent and follow thru

7. Leverage of legitimacy: the goal here is to make the other party feel that an issue is non-negotiable

8. Leverage of Timing: Be willing to say that you need time to think about it

Biases- stereotypes and generalizations. One's own communication skills. How we process information. Variation in personal trust. Big egos. Poor listening skills. Tendency to evaluate other's messages. Inability to listen with understanding. Nonverbal communication.

Discussed in class: language, filtering, information overload, cultural barriers

1. Sound, space, time, general noise. The structure of office, time zone, etc.

2. The study of words. What is said can be interpreted differntly due to vagueness.