Assessment Task 2: Decision Theory in Practice (Online and Face to Face)

Task description:

In this assessment task, you may choose from any three decision themes of five themes provided. Discuss the application of the concepts covered in each theme and why these are important to you now as a manager and for your organisation. What is important here is your ability to discuss the concept, especially how you or your organisation can or have practically applied it for more effective decision-making. Where appropriate, calculations, diagrams and illustrations to support reflections, application and recommendations should be included.

  1. Theme 1 – Harnessing the Power of Groups A shared pool of meaning is created when groups come together in dialogue and are open to accepting new ideas. “The Pool of Shared Meaning is a measure of a group IQ. The larger the shared pool, the smarter the decisions. (Patterson et al, 2002).” Yet more often groupthink gets in the way of effective group decision making.
    Apply two or more of the group decision-making techniques discussed in class (Delphi, Affinity Diagrams, Open Space Technology, Appreciative Inquiry or other of your choice) to a group based decision making scenario in your organisation. Critically evaluate the effectiveness of the group decision making technique using the factors of effective and ineffective groups (Osmani, J., “Group Decision making: Factors that affect group effectiveness”, Academic Journal of Business, Administration, Law and Social Sciences, March 2016). What specific recommendations would you make to improve group effectiveness in decision making in your organisation?
  2. Theme 2 – Big Data “Big data offers business an unparalleled opportunity to extract insight into the behaviour of their customer that can in turn transform business results. BUT just because we can measure and access everything doesn’t mean we should. It is much too easy to get bamboozled by the proliferation of smart technology and endless possibilities that send a business down resource sapping rabbit holes without any definable or useful output. The danger therefore is that we get lost in a sea of data that delivers no value whatsoever.” (Bernard Marr, Big Data, 2015, p39-40)
    Critically evaluate the existing or potential application of Big Data in your organisation. What are the customer insights you are seeking? What is the data that you need to deliver those insights? What processes, systems and capabilities are required to collect, collate, analyse and deliver value from the data? Attempt to quantify the costs and benefits of employing big data to assist with decision making. What recommendations do you have for developing or improving your organisation’s current capabilities?
  3. Theme 3 – Avoiding Bias in Decision Making “Many executives today realize how biases can distort reasoning in business. Confirmation bias, for instance, leads people to ignore evidence that contradicts their preconceived notions. Anchoring causes them to weigh one piece of information too heavily in making decisions; loss aversion makes them too cautious. In our experience, however, awareness of the effects of biases has done little to improve the quality GSB014 Business Decision Making and Analysis: Unit Guide 20 of business decisions at either the individual or the organizational level.” (Kahneman, Lovallo & Sibony, “Before you make that Big Decision”, HBR June 2011, p51-60)
    Critically apply the twelve questions identified by the authors to test the effectiveness of a significant decision or decision process in your organisation. Ideally this should be conducted in collaboration or consultation with decision stakeholders. Where appropriate provide details of supporting information presented with the decision. Then identify opportunities and make recommendations to improve the way in which proposals or decisions are presented for consideration, together with improvements in how the decisions are made and reviewed. This may include the documentation of before and after processes for proposing and making decisions.
  4. Theme 4 – Applying Decision Trees to Business Problems “Decision trees can serve a number of purposes when complex multi-stage problems are encountered. They can help a decision maker to develop a clear view of the structure of a problem and make it easier to determine possible scenarios which can result if a particular course of action is chosen. This can lead to creative thinking and the generation of options which were not previously being considered.” (Goodwin and Wright, 2014, Decision Analysis for Management Judgement, p161). Create a decision tree for a complex multi-stage problem to be considered by your organisation to identify the full range of options available over the period of the decision. Ideally, this should be done in collaboration or consultation with problem stakeholders. Estimate and apply probabilities and expected values where appropriate to recommend a preferred option. Apply sensitivity analysis to key variables to test the robustness of the decision.
    Critically evaluate the usefulness of the decision tree in improving the decision-making process. Then make recommendations for the adoption and applicability of decision trees to other organisational problems. 5.
  5. Theme 5 – Dealing with Risk and Uncertainty “Our perceptions of risk are determined by the amount of uncertainty present, our expectations of gains and/or losses, how we frame the decision, and the amount of personal involvement we feel. These factors combine to form an assessment of how risky or safe we believe the situation to be. In addition, our interpretation of these dimensions is likely to influence the extent to which we believe we can actively control risk.” (Williams, S. W., 2002, Making Better Decisions, Ch 5 – Perceptions of Risk and Decision Making). Critically evaluate the approaches, both qualitative and quantitative, used by your organisation to determine the level of risk associated with decisions. Illustrate your response with the application of risk evaluation techniques to a significant decision and include probability, expected monetary value or utility calculations and/or decision trees as appropriate. What recommendations would you make for improving the consideration of risk and uncertainty in decision making?

Assessment Format: 

The final submission is an Executive Summary, plus three 1000-word critical evaluation reports. Text, illustrations, diagrams and calculations might all feature in this reflective piece, supported by reference to the sources of information and theoretical frameworks of understanding. Where appropriate, additional supporting information may be included in Appendices.

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