Business management2

Business management2 - Lecture 1 Decision Making 1986 Rocket ship Challenger 1 Large number of engineers sent letters to NASA saying that there

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Lecture 1 Decision Making 1986 Rocket ship Challenger 1. Large number of engineers sent letters to NASA, saying that there will be a catastrophe on the Challenger, because there are a lot of errors and shouldn't be launched in the next seven days. 1. Director of Nasa didn't listen and still launched it. 2. Challenger crashed. 3. Director launched it because of Decision influence. Decision Influence 1. Good publicity was going, must stay on time. 2. Money - 705,000,000 to fix and increased cost over-runs. 3. Political pressure from senate/congress. 1. You've had many delays. Do something on time! Decision Making - The process by which managers identify and resolve problems and capitalize on opportunity. 1. Good decision makers solve problems! Seven Steps of Decision Making 1. We identify opportunities 1. Who will marry me? 2. Identify Objectives 1. Where do I want my life or our life to go. 3. Generate Alternatives 1. Red Sox traded Manny and Nomar and got Jason Bay by re-engineering. 4. Evaluate your alternatives 1. Always look for alternatives when making decisions. 5. Reach your decisions 1. Decide who you're going to marry. 6. Implement Decision 1. Marry sam not joe. Where? When? Big? Small? 7. Evaluate and monitor 1. How is your marriage going? Decision Making Models - Four types. 1. Rational Economic Model 1. Managers have perfect information. 1. Looks for great information and digests the information and goes from there. 2. Managers always operate to agree upon objectives. 1. Managers always agree to. 1 Consistent (Lots of Info.). 4. Managers will always work on the best interest of the company. 1. Ellis Huckley "Only consistent people are dead people. In
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the long run we are dead people." 2. Animal Farm "Gee, I thought we are all equal. Yeah just some are more equal" 3. "Never go into a battle with wits unarmed" 1. Don't go into a debate if you don't have a lot of information. Know what you're talking about. 2. Behavioral Decision Making Model - Acknowledges human limitation which ultimately makes rational decision extremely difficult. 1. We cant make rational decisions if we are bias. 1. Concepts of Behavioral Model 1. Intuition - Unconscious analysis based on previous experiences. 1. Going into a room where you feel uncomfortable, why? 2. Satisficing - The search for an acceptance of something which is satisfactory but not perfect. 1. You don't have perfect information all the time. 3. Bounded Rationality - Recognition of our limitations of time, resources, and mental capacity. Why don't you want to make good decisions? 1. Takes to much time Two ingredients to Decision Making 1. Analysis - Collecting as much info as possible.
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This note was uploaded on 02/23/2012 for the course MGT 101 taught by Professor Staff during the Fall '10 term at Texas State.

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Business management2 - Lecture 1 Decision Making 1986 Rocket ship Challenger 1 Large number of engineers sent letters to NASA saying that there

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