Management and Organizational Studies 1023A/B Chapter Notes - Chapter 2-4: Gross Margin, Management Accounting, Financial Statement

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Maria Ferraro

Document Summary

Decision- choosing of one option from a set of options to achieve a goal steps: Differ to factors and the importance they attach to these factors: specify the decision problem (including decision makers goals, identify options. Choices to make: measure benefits and cost (disadvantages) to determine the value (benefits reaped minus the cost) of each option. Every options presents a trade off between benefits and cost. Value=benefit-cost, value can be money but also other factors; it depends on what the decision maker cares about most. Opportunity cost def- value to the decision maker of the next best option. Value of what you give up when you make a decision: make decision, choose option with highest value. Decision making in organizations: organizations have focused goals, multiple people make up organizations and we need to relate their goals to organizations goals. Organization- group of individuals engaged in a collectively beneficial mission.