MBA, Sem-1, Managerial Competency Development, Unit-1, Decision Making and Decision Traps, 30.04.2021

INSTITUTE-University School of Business DEPARTMENT-Management M.B.A Managerial Competency Development Decision Making and Decision Traps UNIT-1: Thinking and Decision Making DISCOVER . LEARN . EMPOWER 1

Course Objective COB No. Title COB1 To give an exposure of decision making under varied scenarios and constraints. COB2 To enable students to understand emotional intelligence and self-development through self-awareness and self-regulation. COB3 To develop ethics and values for promoting ethical behavior and ethical leadership.

Course Outcome CO No. Title Level CO1 Understand the decision making process and overcome Remember decision traps. CO2 Develop emotional intelligence and self-development through Develop self-awareness and self-regulation. Appreciate the concepts of ethics and values and develop Analyse CO3 ethical corporate behavior and leadership. CO4 Take business decisions based on ethical considerations. Analyse

Points to Ponder  What is decision making?  Significance of decision making  Important decision making models  Errors related to thinking  Decision traps and avoidance 4

• Introduction to Decision Making 1. Decision making in inevitable 2. Entire managerial process is based on decision making 3. Decisions are not always based on rationality 4. Good decisions is the key to successful managerial performance.

• Decision Making Defined A decision is an act of choice wherein an executive forms a conclusion about what must be done in a given situation. D. E. McFarland

• Significance of Decision Making  You get to make better choices  It helps you with the big decisions  You learn to differentiate between what’s rational and what feels right  It saves you time and money  Your employees get more confident  Stronger professional development  You tend to accomplish more, faster  Employees develop a stronger sense of commitment

• Poll Decision making is inevitable Yes No

• Errors Related to Thinking Too Positive 1. Minimizing negatives 2. Confirmation bias 3. Wishful thinking, optimism bias 4. Error in attribution

• Errors Related to Thinking Too Negative 1. Minimizing positives, magnification of negatives 2. Personalization 3. Should thinking 4. Illusion of control or underestimating uncertainty 10

• Errors Related to Thinking Too Little, Or Not At All 1. Jumping to conclusions 2. Overgeneralization 3. All or nothing 4. Composition fallacy 5. Fallacy of misleading vividness 6. Composition and group think

• Traps and avoidance in Strategic Decision Making 1. Availability heuristics 2. Representativeness 3. Anchoring and adjustment 4. Loss Aversion 5. Mental accounting 6. Hindsight bias 7. Overconfidence

• Summary • Management is essentially a bundle of decision-making process. The managers of an enterprise are responsible for making decisions and ascertaining that the decisions made are carried out in accordance with defined objectives or goals. Decision-making plays a vital role in management and decision-making is perhaps the most important component of a manager’s activities. • Decisions are needed both for tackling the problems as well as for taking maximum advantages of the opportunities available. Correct decisions reduce complexities, uncertainties and diversities of the organizational environments. • The Interdependence of emotional and rational thinking is powerfully presented in recent neurobiological studies that establish that emotion is essential in rational decision making. However, it is important to recognize that thinking errors abound when we appeal to emotion or start to reason emotionally

REFERENCES Text Books  R. Kipp Martin (Author), Thomas A. Williams (Author), David R. Anderson (Author), 2012. An Introduction to Management Science Quantitative Approach to Decision Making, 13th Ed., Cengage, ISBN: 978-8131518342. Online Articles  https://courses.lumenlearning.com/wm-principlesofmanagement/chapter/rational-decision-making-vs-other-types-of-decision -making/  https://us.sagepub.com/sites/default/files/upm-assets/79111_book_item_79111.pdf  https://www.fastcompany.com/3006643/6-steps-more-effective-delegation  https://www.managers.org.uk/insights/news/2017/september/five-ways-to-successfully-improve-your-poor-delegation-skills 14

• Assessment Pattern Components HT-1 HT-2 Assignment Surprise Test Business GD Forum Attendance Scaled Quiz Marks Max. Marks 10 10 6 4 4 4 2 40

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