Managerial Decision Making - Assignment
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Added on 2021-06-14
Managerial Decision Making - Assignment
Added on 2021-06-14
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Running head: MANAGERIAL DECISION MAKINGManagerial Decision MakingStudent’s NameUniversity nameAuthoer’s Name
MANAGERIAL DECISION MAKING2Table of ContentsPart 1..........................................................................................................................................3Essay..........................................................................................................................................3Principle of Bounded and Procedural Rationality..................................................................3Behavioural Concept of Rational Choice (Biased Rationality)..............................................4Part 2..........................................................................................................................................8Case Study Analysis...................................................................................................................8Case Study 1: Case study of the South-western Airlines (Bounded rationality)....................8Case study 2: Theory of biased rationality.............................................................................9Case Study 3: Game Theory: The case study of laboratory diagnosis of the employee salestraining program in Saudi Arabia.........................................................................................11Reference list............................................................................................................................13
MANAGERIAL DECISION MAKING3Part 1EssayPrinciple of Bounded and Procedural RationalityIt has been observed that in the Models of Man by Simon (1957), the conception of“Bounded Rationality” was first dealt with, for the 1st time. Several year later the author alsointroduced a concept known as “Procedural rationality”. Although the conception of“Procedural rationality” was not described in detail in the first book “Models of Man”, theconcept was implicitly present. The significance of this theory is not in the importantconcepts expressed through this theory, rather, by means of this theory, Simon puts forwardsome elements he conceptualises in high criticism of various aspects of “mainstreameconomics” something that never happened completely before later part of the 1950s prior tothe materialisation of the verses like satisfice or bounded rationality or administrative man.Pertaining to psychology, Simon was leaned more on the electoral process more than theconsequence itself and referred to this disposition as procedural rationality. In 1957, Simon’schief motive was to shift the limelight towards the shortcomings of the conventionaleconomic theory rather than stressing upon conceptualising a new model. Hence the basicfocus of the analysis would be on the discussion of the negative expositions of the pre-existing theory that were done by Simon. The stepping stones of the evolution of hisproposed theory were laid in his critical attitude towards the linguistic as well as conceptualtools (Simon, 1997). On one side there is the classical approach of Herbert Simon, wherebyhe utilised the instrumentality of rationalism and clinged on to a biased rationalistic approach.Simon also showed support towards the conception that in any organisation the primaryobjective is to maximise along the lines of efficiency, patronised by the neoclassical theory interms of maximisation of profit or maximum cost of cost. However, on other side, Simon
MANAGERIAL DECISION MAKING4showed acceptance towards the fact that human action haven not always been rational andthat rationality is itself delved into several limitations (Cristofaro, 2017). According to JosephMahoney, the most distinct and relevant ideas presented by Simon under this proposition isthe difference between fact and value based decisions. Only decisions that are factual, mightbe falsified (Tong, 2017). Value based decisions can be evaluated on qualitative terms butnever determined as right or wrong. In fact Simon’s definition of being “rational” is totallyanalogous to being “efficient” in another sense. Hence, it can easily be stated that accordingto Simon’s conception of Bounded rationality, organisational rationality and economicefficiency are stringently similar (Delannoi & Dowlen, 2016). Simon’s empirical means required a direction to rationality on the basis of falsifiable as wellas countable conception of efficiency patronised by the means end schema. As an outcome,the instrumental perception of rationality is found rejecting any different value propositionsowing to the dearth in scientific status. As an initial approach the concerned conception,Simon defines that rationality is being an attribute of behaviours. Then he spotted somelimitations of this kind of classical rationalism, which became evident as an outcome of hisempirical requirements. The form of substantive rationality that Simon uses in 1957, isactually an implied and subtle form of procedural rationality because of its scientific statusbeing lofty. In his attempt to describe substantive rationalism as akin to global rationality, hesomehow connects the term with the traits of classical as well as neo classical economics(Jones, 2017). Once after considering the limitations in rationality and after successfulcoinage of the conceptualisation of bounded rationality, in his later article in 1976, he broughtout a new conception of procedural rationality in order to address the various concepts arisingto the mingling of psychology during the performance of rational activity calling the allianceof the two as the results of appropriate deliberation. Behavioural Concept of Rational Choice (Biased Rationality)
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