Managerial Decision Making: Real-World Scenarios and Analysis

This report examines managerial decision-making processes, focusing on the application of rational behavior and heuristics in real-world scenarios. The report begins by outlining the decision-making process, including problem definition, criteria identification, weighting, solution selection, implementation, and outcome evaluation. It then delves into three key concepts: heuristics, rational behavior, and bounded awareness. The discussion of heuristics includes availability, representativeness, and their impact on managerial decisions. The report presents real-life scenarios to illustrate the application of these concepts, such as how the availability heuristic influences perceptions of event frequency and profitability, and how managers use representative heuristics to evaluate performance. The report also highlights the importance of understanding how the human mind works in order to make effective decisions. The report concludes by emphasizing the significance of rational decision-making in various organizational contexts.

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

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Table of Contents
Part 1:...................................................................................................................................2
Part 2:...................................................................................................................................8
Introduction......................................................................................................................8
Three-real life Scenario...................................................................................................8
Conclusion.....................................................................................................................12
References..........................................................................................................................13

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Part 1:
Decision-making process can be stated as the method which works for solving different
kind of problems. It can be either small or even complex like the given value. Using some of the
right tools for “SWOT Analysis,” “Market Research,” and “Decision matrix” stand out to be
useful and important (Schilirò, 2018). These tools help the individual in making choice by proper
sorting of required data and characterizing the options. By making use of many option, it
becomes very much beneficial and suitable approach which expand through multiple choice.
This particular seen comes into picture in the process of decision-making. With wide range of
available option, the right people can pick up the suitable requirement based on the scenario.
The given essay will highlight the application of decision-making with regarding the
rational behavior of human mind in the scenario of real world. The given step will help in
solving some of the complex problem considering both the solution and its formulation (Luan,
Reb & Gigerenzer, 2019). Rational decision-making can be stated as a process which is carried
in step by step form. It is done by either organization or an individual considering the analysis
and provided data.
The six steps which are used for problem-solving are discussed below like:
Definition of Problem: Proper identification and discussion of some real issues and
providing category to some of the issues. There is need for complete outline of issues which will
ultimately reducing any miss-concepts (Abatecola, Caputo & Cristofaro, 2018). The very first in
case of rational decision is all about defining different problems followed by describing the
current state. It merely defines the different alternatives.

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Identification of Decision-Criteria: It is very first stage in decision-making is all about
outline the condition in advance, that can be used later used like a guide in decision-making. This
merely comes into without any kind of judgment for accessing the thoughts in mind. There is
need for keeping the whole problem in mind at the instance of setting up the criteria (Butler et
al., 2016). It also help in dealing with variables that will help in analyzing the decision outcome.
Allocating the weight of Criteria: The step is very much helpful in ranking the issue that
will help in understanding the vital process in decision-making. By providing weights to the
listed criteria, it becomes very much helpful in varying the given issue (West, Christodoulides &
Bonhomme, 2018). In some other words, it becomes unlikely to analyze each of the criteria
highlighting the same given level of importance. This is merely achieved by providing a
complete comparison and complete comparison method which stand out to be part of mind-tools.
Selecting the right solution: The fourth step is all about evaluation of some potential
solution and narrowing it down to a single one. Being accepted by people who will use this can
easily implement certain solution that stand out key to success. To understand this, previous step
completely come into play (Bratianu, Vãtãmãnescu & Anagnoste, 2018). A solution can be
considered to be too much radical and complex in nature. The earlier choices help in justification
of choice done by PS group and providing viable solution and followed by implementer to
discuss and select from it.
Implementing the right Solution: The group makes use of different tools like Gantt
chart, log frame, and timeline (Hassan & Zaazou, 2019). In between step five and step six, both
the operational and technical implementation of solution is taken into account.

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Evaluation of Outcome: Project implementation at present requires to completely
monitor by different groups (Udebuana & Charles, 2019). It can ensure all required
recommendation are completely followed. Monitoring is inclusive of Milestone, Cost, and
Necessary work. Most of the working groups follow step six which address that project will
cover the result. Effective groups focus on detecting the project (Abugre, 2020). They merely
ensure that the project does not include any new problem. The step completely depends on data
collection, reporting mechanism, update on regular basis and challenging the overall progress.
Three discrete Concepts
Heuristics can be stated as mental decision that is taken by individual so that solution for
some of complex problem can be achieved. All the given decision stand out to be fast and is not
completely based on any provided rules. There are some chances of judgmental errors in the
decision made by individual (Yildiz & Böhme, 2017). Rational behavior can be stated as a
method of decision-making which completely depends on option of choices that can result in
huge number of benefits for human beings. It does not provide receipt in terms of monetary
benefits at all the given time. Benefits or utility are merely of either kind of emotion which strive
in building a theory of human behavior (Aithal & Kumar, 2017). It is completely described like
the different categories of Heuristics.
Availability Heuristics
It completely based on the most convenient way of providing judgment for any given
problem. This can be based on either basis of percentage or profit that might not be accurate.
Individual often aim to guess much higher percentage in case of crime which requires the
involvement of violence (Forrest et al., 2019). It is even necessary to make judgment which is

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found to be erroneous or even accurate. All the decision made by individual is completely based
on factors like random selection and past records. As per the Simon, it can be stated that most of
the individual require to completely think the whole thing rationally. It merely helps in decision-
making so that greater level of satisfaction is achieved. In this theory, Simon has clearly
highlighted overall capacity of individual the process of making both formula and solution in
comparison to problem size. The problem stand out to be relative small in the real-world
(Thirathon, Wieder & Ossimitz, 2018). Considering Robinson Crusoe theory like decision-
making process, which highlights the rational process after the given stage. Another kind of
heuristics is stated as the representative heuristics which stand out to be the mental shortcut in
the decision-making process. It is all about comparison of information with the human mental
prototype. Let us consider the example; both love and care of older lady stand out to be love and
care of grandmother (Stritch & Pedersen, 2019). Considering the case of heuristic individuals
who form different categories for judgment and decision-making. As per the Simon, there are
many skill required for forming the decision which stand out limited to individual in comparison
to some of relative issues.
Bounded Awareness
It is completely explained with respect to the economic behavior where all the distance
in-between both rationality and behavior covered due to aspect of decision. Behavior is needed
for proper selection of choice that ultimately results in most suitable alternatives of the provided
behavior (Polyakova et al., 2019). Decision can be stated as the procedure where the selection of
alternatives are performed. Decision-making heuristics generally depend on the easy reasoning
for decision-making in difficult situations. Heuristics which need involvement of human
mentality in terms of decision-making process. System 1 is completely based on the human

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instincts. Both intuition or emotion reaction takes place where the system 2 stand out to be
output of system1 considering the decision.
Simon stand out to be as the rationality for relation that exist with respect to pre-
established ends and the way it ends (Belkur et al., 2017). The way it reaches to the said ends is
specific with respect to value, and hence it goes beyond the scope. The relation is completely
based on the question where the evaluation requires the involvement of three steps. The very first
step is all about point out all the required possible option and second one is all about
identification of consequence require to follow the given list (Nguyen et al., 2017). In the last,
there is need for measuring the required option followed by evaluation that needs to be done for
all consequences.
Considering the administrative behavior, Simon focused on addressing the difference
between theoretical and effective behavior. It is all about recognition of behavior option that
requires understanding of the consequence of behavior option (Sacheti, Gregory-Smith & Paton,
2016). Proper valuation and measurement for outcome of consequence for each of the provided
option.
Representative Heuristics
At the time of making judgment about an individual, people need to address an individual
who can easily correspond to formation of stereotypes. Manager also make use of representative
heuristics where they can easily analyze the performance of the person. It is all about
establishing category for the people where the individual represent for them (Sari & Priantinah,
2019). Now, if the managers considers the best people for sales then they are likely to be
extrovert in nature. Manager will favor all sort of people who provide the people with all kind of

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sales job. Similarly, banker can easily analyze or predict the success of new kind of business. It
is done from the venture that is from past successful to unsuccessful venture.
In some of the cases, it is seen that heuristics provide the very cut of approximation focus
on the best available option. The heuristics can easily lead to serious kind of error. The whole
germ theory of diseases have a long time for catch as the people have hard time accepting notion.
Some of the aspects like virus and bacteria can easily result in powerful consequences like
plague and tuberculosis (Costa et al., 2018). For many years, people accepted that diseases were
caused as a result of malevolent agent, something like magic spell or evil spirits. In the given
timespan, most of the people died from most of the prevented diseases.

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Part 2:
Introduction
The report is all about decision-making regarding human mind behavior. It has merely
come into picture as a result of formulation and solution of complex problem which is seen in
real-world. Simon’s concept is all about rational with respect to heuristics that are of three types
of representation, bounded, and availability (Yang & Gabrielsson, 2017). The point can be noted
that organization theory cannot subsist without any rational of theory. It is completely based on
two kind of species that is consumer and entrepreneur.
Three-real life Scenario
Availability
People who are accessing frequency and profitability are less likely to cause an event that
is considered by the degree to understand the occurrence of event. They are readily available in
the memory (Amuna, Al Shobaki & Naser, 2017). There are some cases of event where
development of emotion which is vivid and specific in nature.
Let us consider an example where a subordinate working closely to manager office
will receive much more appreciation at end of year in comparison to worker stilling in the
hall. It is as the result of manager will be much more aware of error of the nearby
subordinates. Product manager will be considered as the base of assessment for the profitability
of new products (Bals, Kirchoff & Foerstl, 2016). It merely focuses on success of product for
recollection and failure of similar product in the earlier days.

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Availability heuristic stand out to be a very much important tool for managerial decision-
making. This is due to the fact that human minds look for instance of events that are of much
greater frequency value in comparison to rare events. Heuristic in general leads to much accurate
kind of decision-making as a result of available factors (Jamkhaneh & Garg, 2018). Heuristics
stand out to be fallible due to judgment of information is completely affected by factors related
to object frequency for event judgment. All the given factors can easily incorporate the influence
of an event right after the perceptual salience where the vividness is revealed.
Representative Heuristics
Managers makes use of this where they can predict the performance of a person. It is
completely based on the people category where the individual represent for them. It is the duty of
manager to think that most of the best people are likely to salesperson who are extroverts
(Pantano, Rese & Baier, 2017). Representative heuristics can easily work at an unconscious level
that forces the person to be involved in discrimination of race and behavior. Most of the people
are completely based on representative information, where the information stand out to be
insufficient for accurate judgment.
Couples marrying at under age of twenty-five are likely to have much bigger
families in comparison to couple marrying at older age.
In this given scenario, the rational assessment for marrying the young are likely to have
large families in comparison to marrying the later marrying later (Abatecola, Caputo &
Cristofaro, 2018). This merely comprises of four groups like couple married at young age and
having large families, couples marrying at young age and having small families, couple who are

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married for large families and lastly, couples are married at older and even have some smaller
families.
There are four different situation for considering the assessing of association between the
given events. There is need for making assumption regarding the fact each one comes up with
possible outcomes (Butler et al., 2016). Decision on everyday merely neglects this particular
point. Selective data makes use of hypotheses where most of the interest are varied for interest.
This particular search heuristics come out to have profound consequences which host of
bias. In the absence of the evidence, people aim to belief that the given statement or hypothesis
stand out to be true. This particular tendency can ultimately lead to confirmation bias where there
is need for search for and analyzing the event supporting the conclusion (West, Christodoulides
& Bonhomme, 2018). This also highlights the power of anchoring where initials hypothesis aim
to hold the starting point. It holds completely undue over the given judgment. Also, the positive
hypothesis testing focus on inspiring the overconfidence, which leads to strong in the accuracy
for belief. In addition, the positive hypothesis can easily trigger the hindsight of bias that can be
dismissed quickly.
Bounded Heuristics
For many of the young people who have addressed him for the exposure for the
American Television show that is Monty Hall. It standout to be television game show which
ask the contestant to pick up one of the three doors. The small doors “zonks” that ultimately
leads to small prize or even gifts (Bratianu, Vãtãmãnescu & Anagnoste, 2018). As soon as the
contestant pick up the door, it is the duty of Monty to open one of the two-door for revealing
zonk. In this case, an offer is made to contestant so that they can trade the chosen door for

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staying unchosen and unopened. One of the well-known but false analysis is that only one of the
two doors remain the opening of door by host. The odds stand out to a value of 50-50. Most of
the contestants stand out to be show of stick with door actually chosen.
After many years of show, a deal went out completely for production, economists and
journalists. Most of the constant erred is all about not making switch to the rest of the unchosen
door. The logic of most of contestant is that Monty opened up most of the unchosen door, which
offer the switch and simple (Hassan & Zaazou, 2019). They mere make a choice of the door first
as contestant had only one in three chance for prize winning. In many instances when Monty
opened the door and reveal zonk, then there can be probability which did not change. In addition,
there is still one out of three chance of contestant winners for start and two-in three for winning
the big prize. It is expected that prize lies behind just one of the out of the three doors. When
Monty completely revealed zonk, he come up with some useful information (Abugre, 2020).
Contestant completely know that two doors were there for collecting two-in-three chance for
winning. Contestant completely switched in between the doors so that they can increase the
chance of odds of winning that one in three to two in three.
Let us consider that Monty created up an unchosen door, but it does not have any grand
prize that stand out to be an important element for analysis. “Let Make a Deal” Monty Hall does
not provide any of the three doors for revealing zonk (Yildiz & Böhme, 2017). “Mean Monty”
only understand the point that grand prizes was located and focused on reducing the minimum
chances of winning. As soon as the contestant chooses the particular door then “Mean Monty”
will either declare the game over or open up one door by providing the option of switch. If
“Monty” wants to reduce the chance of contestant for winning the given grand prize, then
contestant should have never accepted offer from Monty to carry out switch (Aithal & Kumar,