Management and Organizational Studies 1023A/B Midterm: Chapter 4 Textbook and Lecture

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

Document Summary

Step 3 measure benefits (advantages) and costs (disadvantages) to determine the value (benefits reaped less costs incurred) of each option. Step 4 make the decision, choosing the option with the highest value. A decision is the choosing of one option from a set of options to achieve a goal. The decision framework applies equally to all decisions, whether personal or business related. Understand the factors that influence goals and their relative importance. Critical for management to identify best options for analysis. Managers frequently distinguish themselves by their ability to identify the most promising options. Usually decisions are made to achieve the highest value. Bc value is the contribution of an option to the decision maker"s goals, we measure value realtive to the status quo, which is not doing anything at all. 3. the status quo, which is not doing anything at all. Opportunity cost = value of next best option. A decision gives up something to get something.