BUS 272 Lecture Notes - Scenario Planning, Representativeness Heuristic, Mental Model

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 272
• Professor: Graeme Coetzer

Document Summary

Reports blame bad decision making by bp and its contractors for the disaster on the. Deepwater horizon drilling platform in the gulf of mexico. A conscious process of making choices among one or more alternatives with the intention of moving toward some desired state of affairs. Effective decision makers identify, select, and apply the best possible alternatives. Use logic and all available information to choose the alternative with the highest value. Two key elements of rational choice: subjective expected utility probability (expectation) of satisfaction (utility) for each specific alternative in a decision. Determines choice with highest value (maximization), such as, highest returns for stockholders and highest satisfaction or customers, employees, government, and other stakeholders: decision making process systematic application of stages of decision making. All decisions rely to some degree on: the expected value of the outcomes (utility, the probability of those good or bad outcomes occurring (expectancy) It seems logical, but it is impossible to apply in reality.