MGM102H5 Chapter Notes - Chapter Chapter 4 : Bounded Rationality, Satisficing, Decision-Making
Document Summary
Before choosing to do something managers have to ask many questions and go through a lengthy process before anything. Decision making: response to threats and opportunities in the environment. Is a routine and is virtually automatic. No need for new judgements to be made: rule 1: when shelves are 3/4"s gone, order more paper and supplies, rule 2: when ordering paper, order enough to fill the shelves. Uncertainty leads to the letting go of rules and routine. No ready-made decision rules that managers can apply to situations. Quick decisions that do not have time to analyze and take time to make a proper decision. Reveal: assumptions, complexities and pitfalls that affect decision making. Used to help improve the quality of decision making. The classical model: otherwise known: rational model, tells managers how decisions should be made to maximize the benefit the shareholders, assumes managers have access to all information they need to make the optimum decision.
