BBA102 Lecture Notes - Lecture 3: Bounded Rationality, Satisficing, Groupthink

• School: Macquarie University
• Department: Business Administration
• Course: BBA102
• Professor: Dr Alison Barnes

Document Summary

Foundations of management: individual and team/group decision making. Four steps in rational decision making: identify the problem or opportunity, think up alternative solutions, evaluate alternatives and select a solution, implement and evaluate the solution chosen. Complete information, no uncertainty: you should obtain complete, error-free information about all alternative courses of action and the consequences that would follow from each choice. Logical, unemotional analysis: having no prejudices or emotional blind spots, you are able to logically evaluate the alternatives, ranking them from the best ot worst according to your personal preferences. Best decisions for the organisation: confident of the best future course of action, you coolly choose the alternative that your believe will most benefit the organisation. Bounded rationality: suggests that the ability of decision makers to be rational is limited by numerous constraints. Include: complexity; time and money, imperfect information, information overload, different priorities, conflicting goals, cognitive capacity.