Individual Decisions Quarter

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Individual Decisions Quarter (hereinafter, the Quarter) is a lecture introducing the learners to individuals designs primarily through key topics related to individual decision-making. The Quarter is the third of four lectures of Individuals Quadrivium, which is the fourth of seven modules of Septem Artes Administrativi (hereinafter, the Course). The Course is designed to introduce the learners to general concepts in business administration, management, and organizational behavior.


Outline

Human Motivations Quarter is the predecessor lecture. In the enterprise design series, the previous lecture is Process Engineering Quarter.

Concepts

  1. Decision. A choice made from among two or more alternatives.
  2. Policy. A guideline for making decisions.
    • Operative rule(s). The business rules an organization chooses to enforce as a matter of policy. They are intended to guide the actions of people working within the business. They may oblige people to take certain actions, prevent people from taking actions, or prescribe the conditions under which an action may be taken.
  3. Decision making. The action or process of making decisions, especially important ones.
  4. Decision criteria. Criteria that define what's important or relevant to resolving a problem.
  5. Hierarchy of competence (or competence learning model, or four stages of competence). A model that describes psychological states involved in the process of progressing from incompetence to analytical competence and, further, to intuitive competence in some knowledge, skill, and/or ability.
    • Unconscious incompetence (or wrong intuition). A situation in which the individual neither understands nor knows how to accomplish a task and does not necessarily recognize the deficit.
    • Conscious incompetence (or wrong analysis). A situation in which the individual neither understands or knows how to accomplish a task, but he or she recognizes the deficit. He or she also realizes the value of new knowledge, skill, and/or ability needed in addressing the deficit. The making of mistakes can be integral to the learning process at this level of competence.
    • Conscious competence (or right analysis). A situation in which the individual understands and/or knows how to accomplish a task. However, demonstrating the knowledge, skill, and/or ability requires concentration. It may be broken down into steps, and there is heavy conscious involvement in executing the needed knowledge, skill, and/or ability.
    • Unconscious competence (or right intuition). A situation in which the individual not only understands and knows how to accomplish a task, but has had so much practice with a skill that it has become "second nature" and can be performed easily. As a result, the skill can sometimes be performed while executing another task. The individual may be able to teach it to others, depending upon how and when it was learned.
  6. Behaviorism. A theory that argues that behavior follows stimuli in a relatively unthinking manner.
  7. Attitude. An evaluative statement or judgment, either favorable or unfavorable, concerning objects, people, or events.
  8. Controlled expectancy. A situation in which a decision maker is able to estimate the likelihood of certain outcomes.
    • Certainty. A situation in which a decision maker can make accurate decisions because all outcomes are known.
    • Uncertainty. A situation in which a decision maker has neither certainty nor reasonable probability estimates available.
  9. Ad hoc decision-making.
  10. Core self-evaluation. Bottom-line conclusions individuals have about their capacities, competence, and worth as a person. In other words, self-believing in one's inner worth and basic competence.
    • Conceptual skill. The ability to think and to conceptualize about abstract and complex situations.
    • General mental ability. An overall factor of intelligence, as suggested by the positive correlations among specific intellectual ability dimensions.
  11. Decision-making tendency.
    • Bounded rationality. Decision making that is rational, but limited (bounded) by an individual's ability to process information.
    • Bounded rationality. A process of making decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity.
    • Escalation of commitment. An increased commitment to a previous decision despite evidence it may have been wrong.
    • Risk aversion. The tendency to prefer a sure gain of a moderate amount over a riskier outcome, even if the riskier outcome might have a higher expected payoff.
  12. Decision-making dilemma. Optimizing vs. satisficing, intuitive vs rational, Agile vs rigid, conservative vs aggressive
    • Satisfice. Acceptance of solutions that are "good enough."
    • Allostasis. Working to change behavior and attitude to find stability.
    • Defensive behavior. Reactive and protective behaviors to avoid action, blame, or change.
  13. Self-regulation strategy.
    • Prevention focus. A self-regulation strategy that involves striving for goals by fulfilling duties and obligations.
    • Promotion focus. A self-regulation strategy that involves striving for goals through advancement and accomplishment.
  14. Ethical dilemma. A situation in which individuals are required to define right and wrong conduct.
  15. Cognitive dissonance. Any incompatibility or inconsistency between two or more attitudes or between behavior and attitudes.
  16. Individual decision-making. Decision making made by an individual as opposed to group decision-making.

Roles

  1. Operations research analyst. A professional who formulates and applies mathematical modeling and other optimizing methods to develop and interpret information that assists management with decision making, policy formulation, or other managerial functions. He or she may collect and analyze data and develop decision support software, service, or products, as well as develop and supply optimal time, cost, or logistics networks for program evaluation, review, or implementation.

Methods

  1. Decision table. A decision-making technique that specifies complex business rules or logic concisely in an easy-to-read tabular format, specifying all of the possible conditions and actions that need to be accounted for in business rules.
  2. Decision tree. A decision-making technique that provides a graphical alternative to decision tables by illustrating conditions and actions in sequence. In other words, the decision tree is a diagram that describes a decision under consideration and the implications of choosing one or another of the available alternatives. It incorporates probabilities or risks and the costs or rewards of each logical path of events and future decisions.

Instruments

  1. Rational decision-making model. A decision-making model that describes how individuals may rationally behave in order to maximize the outcomes from the decision.
    DADIGOFERDECIDESeven-step decision-making
    DiscoverGoals clarification.Define the problem.Outline your goal and outcome.
    Establish all the criteria (constraints).Gather data.
    Options generation.Consider all the alternatives.Develop alternatives.
    Facts-finding.
    AnalyzeConsideration of EffectsList pros and cons of each alternative.
    DesignReview and implementation.Identify the best alternative.Make the decision.
    ImplementDevelop and implement a plan of actionImmediately take action to implement it.
    Discover (in a new cycle)Evaluate and monitor the solution and examine feedback when necessaryLearn from and reflect on the decision.

Practices

Worker Productivity Quarter is the successor lecture. In the enterprise design series, the next lecture is Information Architecture Quarter.

Materials

Recorded audio

Recorded video

Live sessions

Texts and graphics

See also