Management and Organizational Studies 1023A/B Lecture Notes - Lecture 4: Kaizen, Cost Driver, Job Satisfaction

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Barry Hawn

Document Summary

A decision - simply the choosing of one option from a set of options to achieve a goal. The decision making framework i. ii. iii. iv. Specify the decision problem, including the decision maker"s goal. Measure benefits and costs to determine the value of each option. Make the decision, choosing the option with the highest value. When determining their goals, individuals frequently differ in the factors they consider and the importance they attach to these factors. Critical for management to identify best options for analysis. Because value is the contribution of an option to the decision maker"s goals, we measure value relative to the status quo, which is not doing anything at all. Opportunity cost - is the value of what you give up by making your decision, and the value to the decision maker of the next best option. Business typically measure value and opportunity cost in terms of money, or profit.