{"id":1189,"date":"2017-08-08T21:16:10","date_gmt":"2017-08-08T21:16:10","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-principlesofmanagement\/?post_type=chapter&#038;p=1189"},"modified":"2017-08-09T17:56:29","modified_gmt":"2017-08-09T17:56:29","slug":"styles-of-decision-making","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-principlesmanagement\/chapter\/styles-of-decision-making\/","title":{"raw":"Styles of Decision Making","rendered":"Styles of Decision Making"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li>Identify common styles of decision making.<\/li>\r\n<\/ul>\r\n<\/div>\r\n<h2><strong>Optimizing vs. Satisficing<\/strong><\/h2>\r\nThe \u201cfog of war\u201d refers to the uncertainty common on a battlefield.\u00a0 Business is not quite that bad, but there often isn\u2019t good information for a full analysis.\u00a0 With limitations on information, thoughtful analysis may be impossible. So what\u2019s a decision maker to do? There are two ends of a spectrum from which to approach this: satisficing and optimizing. <strong>Satisficing<\/strong>\u2014a combination of the words \u201csatisfy\u201d and \u201csuffice\u201d\u2014means settling for a less-than-perfect solution when working with limited information. <strong>Optimizing<\/strong> involves collecting as much data as possible and trying to find the optimal choice. Generally, decision makers don\u2019t pick one or the other\u2014you can think of satisficing to optimizing as a spectrum, and each decision starts with an assessment of how critical it is. A branch of management called management science offers methods for solving complex problems.\r\n<h2><strong>Intuitive vs. Rational<\/strong><\/h2>\r\nAccording to Daniel Kahneman, who you\u2019ll read more about in the next section, each of us has two separate minds that compete for influence. One way to describe this is a conscious and a subconscious perspective. The subconscious mind is automatic and <strong>intuitive<\/strong>, rapidly consolidating data and producing a decision almost immediately. The subconscious mind works best with repeated experiences. The conscious, <strong>rational<\/strong> mind requires more effort, using logic and reason to make a choice.\u00a0 For example, the subconscious mind throws a ball and hits the target, while the conscious mind slowly describes the physics and forces required to complete the action.\r\n<h2><strong>Combinatorial vs. Positional<\/strong><\/h2>\r\nAron Katsenelinboigen proposed this description based on how the game of chess is played.\u00a0 A <strong>combinatorial<\/strong> player has a final outcome in mind, making a series of moves that try to link the initial position with the final outcome in a firm, narrow, and more certain way. \u00a0The name comes from the rapid increase in the number of moves he must consider for each step he looks ahead.\u00a0 The <strong>positional<\/strong> decision-making approach is \u201clooser,\u201d setting up strong positions on the board and preparing to react to the opponent. A player using this strategy increases flexibility, creating options as opposed to forcing a single sequence.\r\n\r\n[caption id=\"attachment_1190\" align=\"aligncenter\" width=\"600\"]<img class=\"wp-image-1190\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/08\/08211344\/the-strategy-1080533_1920.jpg\" alt=\"Pieces set up on a chess board, with a man appearing out of focus in the background with a thoughtful expression on his face\" width=\"600\" height=\"409\" \/> Like chess players, businesses can use combinatorial or positional strategies to make decisions.[\/caption]\r\n\r\nIn business, a market share strategy is positional.\u00a0 A dominant market share gives a firm negotiating power even with lesser product.\u00a0 A complex situation with many players and many solutions might require a more combinatorial strategy. Apple faced a complex environment when it entered the music streaming business.\u00a0 It created an ecosystem that served artists, labels, and customers without dominating the music business.","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li>Identify common styles of decision making.<\/li>\n<\/ul>\n<\/div>\n<h2><strong>Optimizing vs. Satisficing<\/strong><\/h2>\n<p>The \u201cfog of war\u201d refers to the uncertainty common on a battlefield.\u00a0 Business is not quite that bad, but there often isn\u2019t good information for a full analysis.\u00a0 With limitations on information, thoughtful analysis may be impossible. So what\u2019s a decision maker to do? There are two ends of a spectrum from which to approach this: satisficing and optimizing. <strong>Satisficing<\/strong>\u2014a combination of the words \u201csatisfy\u201d and \u201csuffice\u201d\u2014means settling for a less-than-perfect solution when working with limited information. <strong>Optimizing<\/strong> involves collecting as much data as possible and trying to find the optimal choice. Generally, decision makers don\u2019t pick one or the other\u2014you can think of satisficing to optimizing as a spectrum, and each decision starts with an assessment of how critical it is. A branch of management called management science offers methods for solving complex problems.<\/p>\n<h2><strong>Intuitive vs. Rational<\/strong><\/h2>\n<p>According to Daniel Kahneman, who you\u2019ll read more about in the next section, each of us has two separate minds that compete for influence. One way to describe this is a conscious and a subconscious perspective. The subconscious mind is automatic and <strong>intuitive<\/strong>, rapidly consolidating data and producing a decision almost immediately. The subconscious mind works best with repeated experiences. The conscious, <strong>rational<\/strong> mind requires more effort, using logic and reason to make a choice.\u00a0 For example, the subconscious mind throws a ball and hits the target, while the conscious mind slowly describes the physics and forces required to complete the action.<\/p>\n<h2><strong>Combinatorial vs. Positional<\/strong><\/h2>\n<p>Aron Katsenelinboigen proposed this description based on how the game of chess is played.\u00a0 A <strong>combinatorial<\/strong> player has a final outcome in mind, making a series of moves that try to link the initial position with the final outcome in a firm, narrow, and more certain way. \u00a0The name comes from the rapid increase in the number of moves he must consider for each step he looks ahead.\u00a0 The <strong>positional<\/strong> decision-making approach is \u201clooser,\u201d setting up strong positions on the board and preparing to react to the opponent. A player using this strategy increases flexibility, creating options as opposed to forcing a single sequence.<\/p>\n<div id=\"attachment_1190\" style=\"width: 610px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1190\" class=\"wp-image-1190\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/1972\/2017\/08\/08211344\/the-strategy-1080533_1920.jpg\" alt=\"Pieces set up on a chess board, with a man appearing out of focus in the background with a thoughtful expression on his face\" width=\"600\" height=\"409\" \/><\/p>\n<p id=\"caption-attachment-1190\" class=\"wp-caption-text\">Like chess players, businesses can use combinatorial or positional strategies to make decisions.<\/p>\n<\/div>\n<p>In business, a market share strategy is positional.\u00a0 A dominant market share gives a firm negotiating power even with lesser product.\u00a0 A complex situation with many players and many solutions might require a more combinatorial strategy. Apple faced a complex environment when it entered the music streaming business.\u00a0 It created an ecosystem that served artists, labels, and customers without dominating the music business.<\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-1189\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Revision and adaptation. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Boundless Management: Decision-Making Styles. <strong>Authored by<\/strong>: Boundless. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.boundless.com\/management\/textbooks\/boundless-management-textbook\/decision-making-10\/decision-making-in-management-75\/decision-making-styles-367-1521\/\">https:\/\/www.boundless.com\/management\/textbooks\/boundless-management-textbook\/decision-making-10\/decision-making-in-management-75\/decision-making-styles-367-1521\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><li>Chess. <strong>Authored by<\/strong>: jarmoluk. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/pixabay.com\/en\/the-strategy-win-champion-1080533\/\">https:\/\/pixabay.com\/en\/the-strategy-win-champion-1080533\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/cc0\">CC0: No Rights Reserved<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":21046,"menu_order":4,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Revision and adaptation\",\"author\":\"\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Boundless Management: Decision-Making Styles\",\"author\":\"Boundless\",\"organization\":\"\",\"url\":\"https:\/\/www.boundless.com\/management\/textbooks\/boundless-management-textbook\/decision-making-10\/decision-making-in-management-75\/decision-making-styles-367-1521\/\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Chess\",\"author\":\"jarmoluk\",\"organization\":\"\",\"url\":\"https:\/\/pixabay.com\/en\/the-strategy-win-champion-1080533\/\",\"project\":\"\",\"license\":\"cc0\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"b48384e7-2851-40b5-9e79-e45733dcae0a, 0a91b0b3-fa0a-4c51-b631-3db35f1b37fb","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-1189","chapter","type-chapter","status-publish","hentry"],"part":47,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/suny-principlesmanagement\/wp-json\/pressbooks\/v2\/chapters\/1189","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/suny-principlesmanagement\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/suny-principlesmanagement\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-principlesmanagement\/wp-json\/wp\/v2\/users\/21046"}],"version-history":[{"count":2,"href":"https:\/\/courses.lumenlearning.com\/suny-principlesmanagement\/wp-json\/pressbooks\/v2\/chapters\/1189\/revisions"}],"predecessor-version":[{"id":1192,"href":"https:\/\/courses.lumenlearning.com\/suny-principlesmanagement\/wp-json\/pressbooks\/v2\/chapters\/1189\/revisions\/1192"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/suny-principlesmanagement\/wp-json\/pressbooks\/v2\/parts\/47"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/suny-principlesmanagement\/wp-json\/pressbooks\/v2\/chapters\/1189\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/suny-principlesmanagement\/wp-json\/wp\/v2\/media?parent=1189"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-principlesmanagement\/wp-json\/pressbooks\/v2\/chapter-type?post=1189"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-principlesmanagement\/wp-json\/wp\/v2\/contributor?post=1189"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-principlesmanagement\/wp-json\/wp\/v2\/license?post=1189"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}