Managerial Decision Making

Running head: MANGERIAL DECISION MAKING
MANAGERIAL DECISION MAKING
Name of the Student:
Name of the University:
Author Note:

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Part Two:-
Executive Summary
The report is going to be discussed on the desired concepts that have been attached
and examined in part one, such as the theory of bounded awareness, framing, and emotions.
There will be three different scenarios for each concept in order to figure out the biasness
along with appropriate methods. The primary purpose will be channelized on how biasness
can be overcome by utilizing these methods which will be linked with part one. In the
introduction part, a short description of Simon’s quote is going to be discussed along with the
three theories. In the discussion part, the three methods, such as bounded awareness, framing,
and emotions, will be discussed based on the biasness and its desired outcome and various
other advantages along with disadvantages are going to be examined appropriately. In the
conclusion part, the desired outcome, suggestions and the main ideas will be summarized. It
will be linked with the previous part, which will help to recognize the main ideas adequately.

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Table of Contents
Introduction................................................................................................................................3
Discussion..............................................................................................................................4
1. The concept of bounded awareness:............................................................................4
2. The theory of Framing:................................................................................................5
3. The approach of Emotions:.........................................................................................6
Conclusion..............................................................................................................................8
References..............................................................................................................................9

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Introduction
The report is going to be discussed on the three theories bounded awareness, framing,
and emotions, which is linked with part one where Simon’s quote is examined appropriately.
It will help to summarize the methods along with real-life scenarios attached to every theory.
It is essential to determine all the approaches so that the readers can figure out the actual
reasons, which are affecting the decision-making processes. The theory of bounded
awareness, as defined in the previous part, is stated as the phenomenon through which many
individuals fail to notice or recognize the accessible information during the processes of
decision-making (Murata, Nakamura & Karwowski, 2015). The concept of framing is linked
with rational choice theory, which is focused on the individuals who thrive for making
rational choices in the best possible ways. The last theory of emotions is the most essential
theory, which directly means that individuals should control their individual feelings in order
to manage and deal with their business transactions by utilizing their emotion management
skills. Therefore, Simon’s theory is going to be the prime factor in appropriately channelizing
these theories. The primary objective is to analyze the three approaches in order to achieve
the recognition of biasness, its consequences and methods to overcome the biasness so that
the readers can stimulate their individual ideas and thoughts appropriately. The desired brief
description of the theories along with Simon’s perspective through his quote, will be provided
in the upcoming section. (240 words)

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Discussion
In the previous part, the main objective of this report is linked with Simon’s famous
quote that justifies his different theories such as bounded rationality: “The capacity of the
human mind for formulating and solving complex problems is very small compared with the
size of the problems whose solution is required for objectively rational behavior in the real
world- or even for a reasonable approximation to such objective rationality.” The quote, as
mentioned above has stated the significant layers of boundaries to highlight that there are
particular restrictions of an individual’s thought process as well as their detailed information
with the desired time (Simon, 1990). Therefore, the three theories will be based on this
definition as well as it will be related to a different set of scenarios in order to find out the
biasness, its consequences, and the scope of improvements in the upcoming future.
1. The concept of bounded awareness:
The theory of bounded awareness is defined as the approach that most individuals fail
to notice the relevant information in the process of decision-making (Bazerman, & Sezer,
2016). They tend to attempt these mistakes because they cannot see the accessible and useful
information, and it does not come into their focus during the process of decision-making by
the decision-maker (Grant & Quiggin, 2013).
In any organization, higher authority, subordinates along other executives tend to
make a lot of decisions for the betterment of the organization but sometimes, for one wrong
decision, things may turn out to be fruitless (Gao, 2013). Therefore, such a wrong decision
has mocked a real-life incident especially in the well-developed country, China. The
company named Home Depot is overall a five hundred company that is serving do-it-
yourselfers and has blossomed in the marketing areas in the whole world (Zheng, 2017). The
executives of this company were achieving profits in every corner of the world so they
wanted to invest and begin a company in China. In the year 2006, the company organized for
about twelve stores as well as funded many types of equipment along with the desired raw
materials (Banjo, 2014). They utilized a lot of information, materials along with equipment to
wait for the structure of the profit area to increase and it did not occur even once in the
consecutive row of six years. All those six years of hard work, efforts, and capital
investments along with services to the employees and customer satisfaction, the company
shuts down their seven stores, which were the remaining ones. They also fired for about eight
hundred fifty Chinese employees from each and every store. It was reported that the company

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runs into losses for nearly one hundred and sixty million dollars. The company drastically
failed to approve any recognition or any profit in its bank account.
The company runs into losses for only one good cause and that is where the theory of
bounded awareness is absolutely relatable and applicable. Before setting up any branch of the
organization in any country, they need to figure out various aspects of advantages along with
disadvantages (Zheng, 2017). Instead, just because China is a well-developed country, the
company may not have desired to research any basic facts such as China is not a DIY market.
Therefore, the company should have researched a lot more in order to set up their branch.
China can provide cheap labor, which leads to the most-middle class customers of China to
contract out its individual repairs (Gao, 2013). The question arises here, how they have
missed this valid point and thought of progressing their company in China.
Thus, the company was totally biased towards the country, and without proper shreds
of evidence and researches, they gathered their investment and funded to receive a large
amount of profit. They have acquired a limited number of inquiries and based on such
restricted options, the company straight away jumped to this conclusion that the project will
be successful enough to overcome any barriers. There are a few methods that can dissolve
problems such senior executives or heads of the project need to be well-informed on the
existence along with the desired impact of bounded awareness on the process of decision-
making (Grant & Quiggin, 2013). They need to ensure the essential decisions that are focused
on the shreds of evidence and researches. The strategic decisions should be focused on
reliable and current information and it should be executed with a critical examination and not
based on untested assumptions (Bazerman, & Sezer, 2016). In this way, the strategies can be
dissolved and it can be rectified in various ways.
2. The theory of Framing:
The concept of framing is focused on the desired attention of several individuals
within a range of meanings (Cornelissen & Werner, 2014). The primary approach or concept
is linked with the rational choice theory which is defined as the individuals’ desire to
generate a maximum number of rational choices in every possible way. The theory of
framing always suggests that how something is presented through the medium of a frame and
influences the rational choices of the individuals (Braithwaite & Schrodt, 2014).
The effect of framing has been one of the most substantial biases aspects in the
process of decision-making. There are almost unlimited ways to justify the impact of

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framing, starting from appeals of emotion, pressures of social issues to priming. It consists of
a positive frame that is presented to all individuals in order to avoid risks in any goods and
services. It may turn out to be a negative aspect if the frames do not actually intend to do
what it has been claimed. A typical case is always highlighted in most with most of the
companies’ especially rival companies. It is often recognized with aged people especially
with subjects like health as well as financial policies (Bimbo et al., 2017). All the dairy
industry has to face a common problem and that is providing fat-free and nutritious products
to all the population especially aged people. The aged people are always conscious about
their health and never want to fell ill, so whichever company offers low-fat or fat-free
products attracts more customers. Suppose, a product is providing eighty percent fat-free
product versus twenty percent fat-free product, people will definitely get attracted towards
the eighty-percent fat-free product. Thus, they intend to avoid risks regarding their health,
and staying fit is the ultimate goal.
Hence, it is proved that people are biased about such goods and services, and in order
to improve the situation, they should first indulge themselves in little research so that they
can actually purchase the product. The customers should inquire about the product’s healthy
elements and should see the review section so that they can understand the product
appropriately (Cornelissen & Werner, 2014). The customers need to ensure and at least
should go for branded products because brands are always conscious about their name and
fame, and they will provide better outcomes.
3. The approach of Emotions:
The theory of emotions is interlinked with organizational theory, which is the central
theme between two essential factors such as physiological arousal as well as cognition.
According to the theory of Schacter-Singer, emotion is the ultimate outcome of the
communication between the arising factors of emotions and cognition (Sponarski, Vaske &
Bath, 2015). The theory has claimed that the physiological arousal has collectively associated
with the framework of each and every situation, and it wholly generates an emotional
experience (Lawrence, Ruppel & Tworoger, 2014).
Organizational theory is linked with the theory of emotions that helps to shape the
beliefs and thoughts of an individual for having value for the job, organization or group.
Suppose, in maximum companies, there is no space for emotions in the field of business or
management. Thus, to deal with several strategies, employees need to think in a different way

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so that they do not attach themselves and the work finishes adequately. All the companies are
biased for those companies with whom they have worked with and wishes to work in the
upcoming future. The essential connection with attitudes, emotions and behaviors has
separate backgrounds that need to be directed appropriately. There are six types of emotions
such as anger, fear, sadness, joy, love and surprise and it effectively influences an individual
in various ways at their workplaces. For example, many employees are present at their
respective workplaces, who unexpectedly does an unfinished work of another employee so he
or she, may feel surprised if he or she does not usually make such efforts and if their boss has
helped him or her, then they may feel happy and proud.
Therefore, before being biased about someone or any organization, employees should
take decisions on that particular situation. They can inquire about such movements or actions
and consequently, they can rectify their mistakes before submitting their feelings for such a
person. The best way to dissolve such situations is to focus on their individual hard work,
appreciate true feelings for co-worker’s help and assistance along with generating an
immense effort towards the company for the betterment in the upcoming future.

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Conclusion
Therefore, the three theories can be utilized effectively, and it can be implemented as
per Simon’s quote is concerned. All three approaches are interlinked with each other and it
may benefit any organization under any circumstances. The main objective was to figure out
the layers of biasness and to improve the situations, and several methods can be utilized, and
basically utilizing strategies efficiently will provide success in any business venture. The
rational choices are evolved from such decisions where bounded awareness has been
neglected but emotions have been a significant factor in any aspect. Therefore, it is essential
to recognize the right decisions and should avoid wrong decisions by going through several
pieces of research.

9MANGERIAL DECISION MAKING
References
Banjo, S. H. E. L. L. Y. (2014). Home Depot Investigating Possible Payment Card Data
Breach. The Wall Street Journal.
Bazerman, M. H., & Sezer, O. (2016). Bounded awareness: Implications for ethical decision
making. Organizational Behavior and Human Decision Processes, 136, 95-105.
Bimbo, F., Bonanno, A., Nocella, G., Viscecchia, R., Nardone, G., De Devitiis, B., &
Carlucci, D. (2017). Consumers’ acceptance and preferences for nutrition-modified
and functional dairy products: A systematic review. Appetite, 113, 141-154.
Braithwaite, D. O., & Schrodt, P. (Eds.). (2014). Engaging theories in interpersonal
communication: Multiple perspectives. Sage Publications.
Cornelissen, J. P., & Werner, M. D. (2014). Putting framing in perspective: A review of
framing and frame analysis across the management and organizational literature.
Academy of Management Annals, 8(1), 181-235.
Gao, M. H. (2013). Culture determines business models: Analyzing Home Depot's failure
case in China for international retailers from a communication perspective.
Thunderbird International Business Review, 55(2), 173-191.
Grant, S., & Quiggin, J. (2013). Bounded awareness, heuristics and the Precautionary
Principle. Journal of Economic Behavior & Organization, 93, 17-31.
Lawrence, E., Ruppel, C. P., & Tworoger, L. C. (2014). The emotions and cognitions during
organizational change: The importance of the emotional work for leaders. Journal of
Organizational Culture, Communications and Conflict, 18(1), 257.
Murata, A., Nakamura, T., & Karwowski, W. (2015). Influence of cognitive biases in
distorting decision making and leading to critical unfavorable incidents. Safety, 1(1),
44-58.
Simon, H. A. (1990). Bounded rationality. In Utility and probability (pp. 15-18). Palgrave
Macmillan, London.
Sponarski, C. C., Vaske, J. J., & Bath, A. J. (2015). The role of cognitions and emotions in
human–coyote interactions. Human Dimensions of Wildlife, 20(3), 238-254.
Zheng, S. (2017). The Failure of Home Depot in China-A Case Study. Business and
Management Studies, 3(4), 54-58.

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