Examples of perfect information in the following topics:
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- An individual has full and perfect information on which to base a choice.
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- People rarely have full (or perfect) information.
- For example, the information might not be available, the person might not be able to access it, or it might take too much time or too many resources to acquire.
- The theory of bounded rationality holds that an individual's rationality is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make a decision.
- Bounded rationality shares the view that decision-making is a fully rational process; however, it adds the condition that people act on the basis of limited information.
- Because decision-makers lack the ability and resources to arrive at the optimal solution, they instead apply their rationality to a set of choices that have already been narrowed down by the absence of complete information and resources.
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- The ability to make effective decisions which are rational, informed and collaborative can greatly reduce opportunity costs while building a strong organizational focus.
- Decision-making is limited to the finite about of information an individual has access to.
- With limitations on information, true objectivity is impossible.
- A satisficer will recognize this necessary imperfection, and prefer faster but less perfect decisions while a maximizer will take a longer time trying to find the optimal choice.
- This can be viewed as a spectrum, and each decision (depending on the risk of a mistake) can be viewed with varying levels of perfection.
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- Monitoring and controlling: This can be thought of as the perfecting stage, in which analyzing the efficiency and quality of the project cycle from a strategic perspective allows for the optimization of operational processes.
- This allows for informed and knowledgeable decisions to be made at each relevant point in the operation.
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- Informal communication occurs outside an organization's established channels for conveying messages and transmitting information.
- Formal communication usually involves documentation, while informal communication usually leaves no recorded trace for others to find or share.
- While informal communication is important to an organization, it also may have disadvantages.
- Casual conversations are often spontaneous, and participants may make incorrect statements or promulgate inaccurate information.
- Less accountability is expected from informal communications, which can cause people to be careless in their choice of words, indiscreet, or disclosing sensitive information.
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- Mintzberg defined ten management roles within three categories: interpersonal, informational, and decisional.
- Liaison: maintains a self-developed network of outside contacts and informers who provide favors and information.
- Mentor: seeks and receives a wide variety of special information (much of it current) to develop a thorough understanding of the organization and environment; emerges as the nerve center of internal and external information for the organization.
- Disseminator: transmits information received from outsiders or from other subordinates to members of the organization.
- Disseminating what is of value, and how, is a critical informational role.
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- The interactive style of leadership makes it a priority to inform followers about important matters related to their goals and tasks and to clarify understanding.
- Interactive leaders are proactive in seeking information and opinions from followers.
- While interactive leaders may make use of technology to share information, they also seek the richer exchanges that face-to-face communication allows.
- When making group decisions they may solicit information, perceptions, and even recommendations from team members.
- An interactive leader shares information and answers questions to clarify goals and tasks.
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- Information disclosure includes choices about what types of information is shared and with whom, the content of what is communicated, and the timing of the release of information.
- Some information is private, such as personnel matters, or commercially sensitive, like strategic business plans.
- Clarity refers to how easily comprehended the information or communication is.
- Accuracy means that available information has integrity, is truthful, and faithfully represents organizational decisions, policies, and practices.
- Following these guidelines would increase transparency: the public would have access to compensation information now kept from public view.
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- Effective communication takes place when information is shared accurately between two or more people or groups of people and provokes the desired response.
- The goal of communication is usually to generate action, inform, create understanding, or communicate a certain idea or point of view.
- Physical barriers like distance, inferior technology, or staff shortages that reduce information processing capacity.
- One person may want information compressed to bullet points, another may demand granular detail.
- The format and delivery of information is important.
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- Upward communication is the transmission of information from lower levels of an organization to higher ones; the most common form is employees communicating with managers.
- The content of such communication can include judgments, estimations, propositions, complaints, grievances, appeals, reports, and any other information directed from subordinates to superiors.
- The communication channel, or mode of sharing information, strongly influences the upward communication process.
- For instance, sending a written report to someone who prefers to receive information in the form of a concise email is less likely to bring about the desired effect.
- For management, upward communication is an important source of information that can inform business decisions.