GMS 200 Lecture Notes - Lecture 2: Satisficing, Frameshift Mutation, Heuristics In Judgment And Decision-Making

• School: Ryerson University
• Department: Global Management Studies
• Course: GMS 200
• Professor: Emad Samwel

Document Summary

Some management issues share by rattner: many spending decisions were not justified by sound analyses, financial operation was in shambles, top (cid:373)a(cid:374)agers showed (cid:862)frie(cid:374)dly arroga(cid:374)ce(cid:863) It is a highly competitive and uncertain global business environment; but: managers still have to get their companies ahead by making the best use of information, money and people. We need to know: how managers make decisions, or ought to make decisions; and, what pitfalls managers should avoid in making decisions. How people make decisions: people make decisions based on quick-and-dirty rules (mental heuristics: availability, representatives, anchoring and adjustment), mental heuristics maybe useful but tend to yield biased conclusions, other pitfalls: framing error, confirmation error and escalating commitment. What you should know after lecture: what are the characteristics of the classical and behavioral theory/model? (the classical model talks about an optimizing decision while the behavioral model talks about a satisficing decision.