Individual Decisions Quarter

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.
   • Programmed decision. A repetitive decision that can be handled by a routine approach.
   • Non-programmed decision. A unique and nonrecurring decision that requires a custom-made solution.
   • Intention. A decision to act in a given way.
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.
   • Intuition. An instinctive feeling not necessarily supported by research.
   • Intuitive decision making. Unconscious decision making on the basis of distilled experience, feelings, and accumulated judgment.
   • Rationale. A reasoning characterized by making consistent, value-maximizing choices within specified constraints.
   • Rational decision making. Decision making that produces choices that are logical and consistent and maximize value.
4. Decision criteria. Criteria that define what's important or relevant to resolving a problem.
   • Quantitative approach in management. The use of quantitative techniques to improve decision making.
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.
   • Behavior. The actions of people.
7. Attitude. An evaluative statement or judgment, either favorable or unfavorable, concerning objects, people, or events.
   • Cognitive component. That part of an attitude that's made up of the beliefs, opinions, knowledge, or information held by a person. In other words, the cognitive component is the opinion or belief segment of an attitude.
   • Affective component. The emotional or feeling segment of an attitude.
   • Behavioral component. The segment of an attitude that refers to an intention to behave in a certain way toward someone or something.
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.
   • Design thinking. Approaching management problems as designers approach design problems.
   • Heuristic. A rule of thumb that decision makers use to simplify 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.
    • Ethics. Principles, values, and beliefs that define what is right and wrong behavior.
    • Behavioral ethics. Analyzing how people actually behave when confronted with ethical dilemmas.
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.

   DADI	GOFER	DECIDE	Seven-step decision-making
   Discover	Goals 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.
   Analyze	Consideration of Effects		List pros and cons of each alternative.
   Design	Review and implementation.	Identify the best alternative.	Make the decision.
   Implement		Develop and implement a plan of action	Immediately take action to implement it.
   Discover (in a new cycle)		Evaluate and monitor the solution and examine feedback when necessary	Learn from and reflect on the decision.

   • 

     Seven-step decision-making
     Seven-step decision-making. A rational decision-making model that consists of seven steps.

Practices

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