9 Examples of Managerial Decisions

Running head: MANAGERIAL DECISION
MANAGERIAL DECISION
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MANAGERIAL DECISION1
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Understanding Herbert Simon’s Idea of Rationality in Decision making.............................2
Concept of Heuristics and Bias..............................................................................................3
Implication of Overconfidence in Decision making..............................................................5
Concept of Sacrificing in Managerial Decision Making........................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8

MANAGERIAL DECISION2
Introduction
Integration of psychological understandings into management study has a long history
and has recently attained momentum over the past decade. Herbert Simon consistently strived
to construct a theory of human behavioural pattern. As per Simon (1957), the distance
between rationality and behaviour has been connected by the idea of decision. A choice is a
selection of one amongst the several behavioural alternatives to be executed. Every
behavioural pattern involves a choice of selection of such kind whether be conscious or
unaware. A decision is understood as a method through which such a selection is primarily
executed. According to Huppatz (2015), rationality is understood as a criterion used in
decision which is theoretically based on the presupposition claiming that the agents are
envisioned to be rational. In other words, the agents value rationality as a standard of choice.
In such an understanding, rationality is considered as an explaining principle. As managers
serve decisive role in influencing major organizational results, it is highly essential to
comprehend the way managers’ heuristics and biases, along with over confidence and
coordination influence their judgements and outcomes in organizations. The essay will
discuss Simon’s quote in reference to a critical evaluation of three discrete concepts related to
Biases and Heuristics, Overconfidence and coordination in a managerial decision making.
Critical Analysis
Understanding Herbert Simon’s Idea of Rationality in Decision making
Simon’s legacy in ways of exploring decision making is threefold. Firstly, human
judgements must not be expected as a priori to pursue rational, statistical and additional
authorized models (Huppatz, 2015). On the other hand, human decisions must be understood