Management and Organizational Studies 2181A/B Study Guide - Final Guide: Nominal Group Technique, Bounded Rationality, Sunk Costs

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2181A/B
• Professor: Maria Ferraro

Document Summary

Decision making: define decision making and differentiate well-structured and ill-structured problems. Process of developing a commitment to some course of action. Involves making choice among several action alternatives problem solving. Perfect rationality: complete informed, perfectly logical & oriented toward economic gain: economic person: gather info without cost & completely informed, logical, economic gain. Tendencies to get and process info in particular way prone to error. Bounded rat can lead to: perceptual defence, problem defined in terms of functional specialty/terms of solution, problem diagnosed in terms of symptoms: e. g. 10000 expense seen as cost or investment: explain the process of escalation of commitment to an apparently failing course of action. Tendency to incest addition resources in an apparently failing course of action: acting as if recoup sunk cost. Can happen when current decision maker not responsible for precious sunk costs & in competitive & non competitive situs.