Managerial Decision Making Question 1

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ManagerialDecision Making


Themanagement of any organization should ensure that it make decisionsnecessary in attaining its objectives. Some errors are encountered inthe process, and in most cases, the blame falls on staff. Emotionsand motivations have an influence on the decision making procedureespecially, when conflicts arise among policy makers (Bazerman &ampMoore, 2013). For instance, in the company I was working, the head ofour department was pressured to retrench some of the employees tomeet the number given. This was not an easy task hence, I advisedhim to come up a performance evaluation policy to help determine theunderperforming members. It increased the morale of hard-workingindividuals and reduced the complaints that were received from theretrenched members. The assessment list presented enough evidencethat showed how some individuals were not executing their dutiesproperly.


Investorsfund the stock markets for different reasons. Stock trading is veryunstable because the prices in these markets keep on fluctuating fromtime to time. Before they invest, they take the time to study thevolatility of the merchandise to determine if their wealth can bemaximized. Some may prefer cheap volatility while others are for thehigh one (Bazerman et al., 2013). There is a privilege to those whoprefer high volatility goods since they have a high likelihood ofgetting high returns when they decide to sell them. However,hyperbolic discounting is a point to consider at this point. Thefuture prices of the stocks are unknown, and some may prefer buyingthem at the current cost so that if their value reduces later on,then they will not encounter massive losses. Therefore, if thepresent prices can earn a profit, particular investors will decidebuy at that rate compared to a future one.


Thoughmost banks readily accepted the conditions laid out by the federalbailout, some of them were uncomfortable as they felt limited to mostof their operations (Labaton, 2009). Parts of these rules were seenas barriers to most of the programs that the money lendinginstitutions had initially laid out (Solomon, 2009). They wereordered to slash the dividends as well as cancel the training offeredto the employees. Similarly, they were prohibited from offering jobopportunities to foreign citizens. Unlike before, the set regulationsdictated the way the institutions carried out their activities. Thedecisions affected the banks and their management adversely as theywere subject to change anytime. Additionally, the congress and theadministration were given the power to alter the contents of thepolicy anytime. In self-serving reasoning, the financial institutionswere at liberty to suggest what they felt was fair for them andbetter for their businesses than any other body would advise(Bazerman et al., 2013).


Mostinvestors have been unknowingly robbed by the fraudsters, who havecome up with complicated Ponzi schemes. People decide to invest intosuch plans because they are promised attractive returns. They getmotivated to make unsound investment conclusions that consume part orall of their incomes. For instance, McCabe and his wife ventured intosuch a program for a long time, but they got nothing at the end sincethe company collapsed (Woodruff, 2012). They later discovered thattheir funds were used to pay older investors. Another joint decisionis the earning of higher returns that are not subject to risksnonetheless, there are hidden uncertainties that most people fail torecognize (Touryalai, 2012).

Exponentialdiscounting is used to analyze the choices that people make overtime. These resolutions were made because people enjoyed the returnsonly to realize the truth after they had been defrauded. This method,therefore, played a key role in the choices that the businesses andindividuals made concerning investing in the programs. The fact thatthey enjoyed the profits each year was a sure way for them to believethe same would continue for an indefinite time nevertheless, thisdid not happen.


Bazerman,M.H &amp Moore, D.A. (2013). Judgmentin Managerial Decision Making.Hoboken, NJ: Wiley

Labaton,S. (2009). Some Banks, Feeling Chained, Want to Return Bailout Money.TheNew Yolk Times,Retrieved from August 29, 2016.

Solomon,D. (2009). More Banks to TARP: Thanks, but No Thanks. TheWall Street Journal,Retrieved from August 29, 2016.

Touryalai,H. (2012). Zeek Rewards and why Ponzi Schemes will Never Go Away.Forbes,Retrieved from August 29, 2016.

Woodruff,M. (2012). HowOne Bad Investment Decision Cost this Man His Retirement,Retrieved from August 29, 2016.

Managerial Decision-Making Question 1

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Thedecision-making process forms the larger part of any organization. Incases where the decisions are made by individuals the process iseasier than when it involves many groups (Anisimova, 2014).Nevertheless, the administration may choose to take the groupperspective of the issues to be passed, and have to consider theneeds of the employees.

Thebonding similarity between the two is vital in both a solution hasto be reached. It is also evident that in both circumstances theprocedure takes a professional line (Bennet, 2016). The ideas thatare put in place must follow the five steps to eliminate cases ofdissatisfaction from other employees.

Thereare notable differences between the two in the individualizedapproach, a solution is reached at a personal level withoutconsidering the opinion of the group whereas in group tacticconsultation is the order of the day giving room for people`sopinions.

Theindividual approach, in most cases, is efficient since only oneperson is involved in the course. Low costs are incurred in theprocess and time wasted is minimal. Hence, this technique suitsurgent and crucial decisions (Paprika, 2011). Nonetheless, it doesnot exploit the abilities and the opinions of others making itdictatorial and traditional. It has also been attributed to conflictswithin the organization, especially, when the resolutions do notconform to the group’s opinion.

Groupmethodology, on the other hand, seems resourceful as the ideas ofemployees are considered. It also enhances cohesion and teamwork.Conversely, the procedure is not always efficient if not wellimplemented since much time and resources are wasted. There is also apossibility of several members dominating the debates.

Boundedawareness is a major characteristic of the two methods in theindividual approach, managers may be unable to see or find out thecrucial information that is necessary for a certain decision. Theymay also miss the mark in using what they see since they are notaware of the significance it holds. It is likely that when applyingthis technique to group members may fail to share the informationlimiting the firm’s awareness.


Theadministrators of any organization should realize that boundedawareness is a typical feature of the processes taken when coming upwith decisions. Though in most cases information can be easilyaccessed and perceived, intellectual blinders thwart individuals fromperceiving, pursuing, making use, and sharing of the information.

Itsaspect of focusing on an issue is unquestionably useful.Nevertheless, it restricts mindfulness at times making it difficultfor parties involved in the process to see certain information(Bazerman, 2009). It is, therefore, evident that when employeesstrictly focus on the topic under discussion, the likelihood of themoverlooking critical information is high.

Inabilityto look for information is bound to arise, especially, when the groupmembers have a formed opinion on a particular outcome or they are notaware of the topic under discussion. These factors may limit anindividual’s ability to seek information.

Thereis also a tendency of some parties to ignore, directly, the availableinformation that is at times valuable (Bazerman et al, 2009).Executives sometimes disregard certain aspects about theircompetitors. This happens when the organization is making optimumprofits. However, in most cases, there is variation in the accessedinformation, particularly, in an attempt to reach a consensus.

Thoughit is believed that working in a group is resourceful, studies haveshown that groups have intellectual boundaries that restrain sharingof crucial information. Naturally, individuals will discuss theinformation that every person is aware of and fail to disclose theexceptional information they are holding. It is necessary for anyadministrator to be aware of these aspects and establish mechanismsto break through such bounds.


Themajor objective of group think is accommodating others in a team andlimit chances of conflicts and dissatisfaction (Tezanos, 2010). Inthe organization I was serving, the aspect was a result of thedeep-rooted characteristic of the organizational thoughts. I believethat this feature had an aversive effect on the entities decisions.For instance, innovative ideas were suppressed, and the individualopinions were not taken into consideration. This made the companyunable to match the ever changing trends in the field of technology.The homogeneous employees and the standardized work structure made itdifficult for any employee to come up with a divergent view.

Theapproach restricted deep analysis of situations since individuals’chief goal was to conform to the opinions of the majority (Musselin,2012). Consequently, several dimensions that led to catastrophicoutcomes were unquestioned. For instance, the organization alwaysfound itself in calamities and deep depression after ignoringinformation from secluded groups that held divergent ideas in makingcritical decisions.

From the firm`s setup, I realized that the decision to take the groupthink perspective was due to the massive losses that the company onesmade by adopting an idea that was divergent from the set structuresthat the management thought it was healthy. Nonetheless, from theconsequences, I noticed drastic measures have to be put in place tobreak the culture.


Whilegroupthink calls for loyalty and conformation to group ideas,focalism relies on the first information in solving issues. Bothapproaches suppress innovation, disregard different alternatives, arecharacterized by irrational practices, shy away from the reality attimes, and tend to generalize ideas and the experiences of theinvolved parties.

However,groupthink is complacent while focalism emphasizes and isolatespractices from others (Tezanos, 2010). In addition, peer pressureplays a pivotal role in groupthink as opposed to the importance ofone aspect in focalism.


Anisimova,T. (2014). Aligning Company and Dealer Perspectives in CorporateBranding: Implications for Dealer Satisfaction and Commitment.Journalof Business-To-Business Marketing,21(1),35-56.

Bazerman,M. H., &amp Moore, D. A. (2009).Judgmentin managerial decision making(7th ed.). Hoboken, NJ: Wiley.

Bennett,D. (2016). Intrinsic Valuation of Information in Decision Makingunder Uncertainty. PLoSComputational Biology,12(7),1-21.

Carey,L. A. (2016). Group Work Education: A Call for Renewed Commitment.SocialWork With Groups,39(1),48-61.

Musselin,C. (2012). Editorial.European Journal Of Education,37(1),1.

Paprika,Z. (2011). Managerial decision making and competitiveness: the caseof Hungary. CompetitivenessReview,18(1/2),154-167.

Tezanos,P. (2010). What will the others think? In-group norms as a mediatorof the effects of intergroup contact.British Journal of Social Psychology,49(3),507-523.

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