MAN 3025 Chapter Notes - Chapter 7: Bounded Rationality, Satisficing, Groupthink

• School: University of Florida
• Department: Management
• Course: MAN 3025
• Professor: Professor Archambeau

Document Summary

Decision: choice made from among available alternatives. Decision making: process of identifying and choosing alternative courses of action. Rational model of decision making (classical model): explains how managers should make decisions. Assumes managers will make logical decisions that will be the optimum in furthering the organization"s best interests. Problems: difficulties that inhibit the achievement of goals. Opportunities: situations that present possibilities for exceeding existing goals. Stage 3: evaluate alternatives and select a solution. Stage 4: implement and evaluate the solution chosen. Non-rational models of decision making: explain how managers do make decisions. Assume that decision-making is nearly always uncertain and risky, making it difficult for managers to make optimal decisions. Bounded rationality: concept suggests that the ability of decision makers to be rational is limited by numerous constraints (complexity, time and money, and their competitive capacity, values, skills, habits, and unconscious reflexes) Satisficing model: managers seek alternatives until they find one that is satisfactory, not optimal.