MGMT 3000 Lecture Notes - Lecture 15: Representativeness Heuristic, Social Influence, Status Quo Bias

• School: University of Georgia
• Department: Management
• Course: MGMT 3000
• Professor: charleswaynelyons

Document Summary

Rational decision making process: theory that individuals make decisions based on a rational thought process that optimizes self-interest, problem, objectives and goals identified, weight the objectives according to importance. Identify a few possible courses of action- increase funding for new ventures: rate each course of action. Incomplete, imperfect, or misleading information: limited ability or background to process information, conflicting objectives, limited time. How to managers make decisions: bounded rationality- tend to complicated the rational decision process, satisficing- act of choosing a solution that is good enough. Insights that are tapped through intuition and are not always fully understood by the decision maker. Referred to as gut feel or hunches. Can emerge as a form of automated expertise if it is drawn from. Decision making conditions connections to past experiences: conditions of certainty- rarely, ambiguity, conditions of risk, conditions of uncertainty- very common. How biases impact decision making: cognitive heuristics. Alternative wordings for same information that significantly alters a decision.