ECON 1 Lecture Notes - Lecture 21: Organizational Learning, Bounded Rationality, Decision-Making
Document Summary
Chapter 7 decision making, learning, creativity, and entrepreneurship: the nature of managerial decision making. Every time managers plan, organize, direct, or control organizational activities, they make a stream of decisions. Decision making is the process by which managers respond to opportunities and threats by analysing options and making determinations about specific organizational goals and courses of action. Good decisions result in the selection of appropriate goals and courses of action that increase organizational performance; bad decisions lower performance. Managers are always searching for ways to make better decisions to improve organizational performance. At the same time, they do their best to avoid costly mistakes that will hurt organizational performance. Regardless of the specific decisions a manager makes, the decision-making process is either programmed or nonprogrammed. Programmed decision making is a routine, virtually automatic decision making that follows established rules or guidelines. Nonprogrammed decision making is a nonroutine decision making that occurs in response to unusual, unpredictable opportunities and threats.
