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    HKUST 3130 Unit 0 Introduction

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    Ken G
    The document provides an overview of a course on judgment and decision making in organizations. It discusses three parts: decision analysis, human irrationality, and contemporary organizational issues. It then outlines what judgment and decision making entail, and the components of complex decision problems including objectives, alternatives, tradeoffs, and uncertainties. Finally, it introduces decision analysis as a methodical approach to address complex decisions.

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    HKUST 3130 Unit 0 Introduction

    Uploaded by

    Ken G
    31 views6 pages
    The document provides an overview of a course on judgment and decision making in organizations. It discusses three parts: decision analysis, human irrationality, and contemporary organizational issues. It then outlines what judgment and decision making entail, and the components of complex decision problems including objectives, alternatives, tradeoffs, and uncertainties. Finally, it introduces decision analysis as a methodical approach to address complex decisions.

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    HKUST 3130 Unit 0 Introduction

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    The document provides an overview of a course on judgment and decision making in organizations. It discusses three parts: decision analysis, human irrationality, and contemporary organizational issues. It then outlines what judgment and decision making entail, and the components of complex decision problems including objectives, alternatives, tradeoffs, and uncertainties. Finally, it introduces decision analysis as a methodical approach to address complex decisions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    31 views6 pages

    HKUST 3130 Unit 0 Introduction

    Uploaded by

    Ken G
    The document provides an overview of a course on judgment and decision making in organizations. It discusses three parts: decision analysis, human irrationality, and contemporary organizational issues. It then outlines what judgment and decision making entail, and the components of complex decision problems including objectives, alternatives, tradeoffs, and uncertainties. Finally, it introduces decision analysis as a methodical approach to address complex decisions.

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    Overview of Course Units

    Part 1: Part 2: Common Traps of Part 3: JDM Issues in


    Decision Analysis Human Irrationality Contemporary
    Organizations
    Two systems of
    Bounded
    thinking
    awareness

    Availability
    heuristic Performance
    Planning fallacy
    appraisal

    Defining your Representativeness


    Escalation of Diversity and
    decision problems heuristic
    commitment inclusion

    Decisions involving Prospect theory Temporal


    multiple objectives Unethical behavior
    decision making

    Decision making Biases in group


    under uncertainty Going green
    decision making
    5
    ABOUT THIS COURSE:
    MGMT 3130 Judgment and Decision Making in Organizations

    When do we need to make decision?


    • We have a goal to achieve.
    • We have choices (multiple options).
    • We have finite resources which prevent us from pursuing all the options
    simultaneously.
    When all three above conditions are met, we need to choose the alternative
    that best enables us to achieve our goal within the constraints of our
    resources.

    3
    What is judgment and decision-making?

    Judgment & Decision Making

    Judgment of
    Value and Choice
    Probability

    To estimate the value of alternatives To select from alternatives, e.g.,


    and the likelihood of events, e.g., • Choose Candidate A or
    • How good is this job candidate? Candidate B?
    • How likely will this investment be • To invest or not to invest?
    profitable?

    4
    Components of Complex Decision Problems

    Objectives
    • Your goals. What do you want? What do you need?
    Alternatives
    • Different courses of action from which you can choose.
    Tradeoffs
    • In comparing different alternatives, you need to consider the tradeoffs between
    the benefits offered by them.
    Uncertainties
    • The consequences of alternatives may not be certain.
    • Associated with this is your risk attitude – would you prefer the least risky
    alternative or to tolerate a higher level of risk?
    Linked decisions
    • Some of the decisions are sequential in nature.
    7
    By now Samuel finds it difficult to think clearly about the decision. What he needs
    is a method that will enable him to address the complexity of the problem –
    Decision Analysis.
    Income Enjoyment Enjoyment
    at work from family
    ? ? ?

    Stay with ABC


    Consulting Success (?%)
    ? ? ?
    Home office
    Set up own Fail (?%)
    ? ? ?
    business
    Success (?%)
    ? ? ?

    Rent a Fail (?%)


    ? ? ?
    luxury office
    Change job
    to XYZ company
    ? ? ?
    8
    Decision Analysis (DA) involves
    (1) the decomposition of a complex decision problem into a set of smaller
    elements (objectives, alternatives, tradeoffs, uncertainties),
    (2) the systematical thinking about each element, and
    (3) the integration of the results so that a provisional best alternative can be
    selected.
    Benefits of performing DA
    • Provide structure to a complex problem – You need to spell out clearly the
    objectives, alternatives, tradeoffs, and uncertainties.
    • DA shows you what you should do given the judgments that have been elicited
    from you during the analysis.
    • Provide a defensible rationale for choosing a particular option by tracing back
    through the analysis.
    • If the solution suggested by DA is inconsistent with your intuitive feelings, the
    conflict can then be explored.
    9

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