Management and Organizational Studies 1023A/B Lecture Notes - Lecture 4: Gross Margin, Natural Capital, Fiduciary

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

Document Summary

Decision making steps: 1) specify decision problem, 2) identify options, 3) measure benefits and costs, 4) make decision. Differences if goals often lead individuals to make different choices given the same options. Identifying the set of options can be the most important task of management. Naturally you will choose the option that maximizes value (benefits less costs), we measure value relative to status quo i. e. doing nothing. Ensure the value of the chosen option exceeds the opportunity cost. A for-profit business usually specifies goals according to ownership, family- owned vs. publicly held firm. Companies hire managers to act in the best interest of the shareholders, but they wish to maximize their own compensation. Firms use the following to make individual goals match organizational goals: policies and procedures to define acceptable behavior, monitoring to enforce policies, incentive schemes and performance evaluations.