BUS_AD 1500 Lecture Notes - Lecture 6: Decision-Making, Bounded Rationality, Satisficing
9 Nov 2016
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The ability to use one"s gut and/or appropriate information to make sound decisions. Decisions we"ve encountered and made in the past. Going to your favorite restaurant -- you"ll always know what you"ll order. Unique to the situation at hand, haven"t encountered this decision in the past. No one is perfectly rational, so this is how decisions are actually made. Decision making is uncertain (there is always some risk involved) Bounded rationality -- constraints that restrict rational decision making. Satisficing - choosing a solution that meets a minimum standard of acceptance. Command -- leaders make decisions without consulting their teams. Collaborative -- leaders gather team to make decision together; leaders make final call, but they want insight. You can never have perfect information, so gather as much as you can; don"t over analyze. If the solution isn"t working, you might have to rip apart something you"ve created (no matter how much time or money you"ve spent on something)
