managerial_decision_making - Managerial decision making 1...

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Managerial decision making 1 Managerial decision making Professor Name Date
Managerial decision making 2 Table of Contents Part 1 ........................................................................................................................................... 3 Introduction ............................................................................................................................. 3 Psychological properties of the actor ...................................................................................... 4 Administrative behaviour ........................................................................................................ 5 Rational components in role behaviour ................................................................................... 6 Contemporary theories of human choice ................................................................................ 7 Conclusion ............................................................................................................................... 8 Part 2 ........................................................................................................................................... 9 Introduction ............................................................................................................................. 9 Psychological properties of the actor .................................................................................... 10 Administrative behaviour ...................................................................................................... 12 Rational components in role behaviour ................................................................................. 14 Contemporary theories of human choice .............................................................................. 16 References ................................................................................................................................. 18
Managerial decision making 3 Part 1 Introduction "The capacity of human mind for formulating and solving complex problems is very small compared with the size of the problems whose solution is required for objectively rational behaviour in the real world or even for a reasonable approximation to such objective rationality" We will analyse this quote from Simon on the basis of a number of concepts defining the bias in decisions taken in the workplace of the organisation. This principle is also known as the principle of bounded rationality. This principles can be used to explain rationality and bias in the decision making process by basing the explanation on some of the concepts mentioned in the provided in the course (Clemen, 2013). These concepts are the psychological properties of the actor, administrative behaviour, rational components in role behaviour and the contemporary theories of human choice, which are responsible for the presence of the bias in the decision making process in any of the situations in the workplace of an organisation. These concepts mentioned in the course materials define the impacts on the various aspects of the thought process of the individuals in the decision making process (Dash, 2013).
Managerial decision making 4 Psychological properties of the actor The psychological properties of the actor in the decision making process allow the actor to create a model of the real world. This simplified model allows the actor to have a feeling of the real world for his or her rational behaviour and reference. The actor in the decision making process constructs this simplified model to ensure that his or her behaviour to the real world scenario is rational. We can determine the behaviour of the actor of the decision making process by having deeper insight into the factors in the process of construction of this simple model along with its structure. The construction of this simplified model is affected heavily by the psychological properties of the individual such as the cultural background, family background, nature and behaviour. So the actor behaving rationally to this simplified model of reality may not be behaving rationally in the real world scenario of the same model. So the decision making process based on the behaviour of the actor in this simplified model may include various biases based on a number of factors in the nature of the individual (Cankurtaran, 2014).

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