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Management Decision-Making Research Paper

Accounting What decision making model would you use to make this decision?

The rational decision making model would be the best choice in this instance. This model is particularly useful as it provides a systematic method of processing information. Many of the steps involved within the overall process involve judgment and foresight. In question 4 of the self test, the primary problem is centered on working an additional shift. The decision to work the additional shift lends itself well to the rational decision making model. First the model allows the development of alternatives, which can better aid management in its overall decision. Alternatives to working an additional shift would be to outsource labor, improve productivity through technology and so forth. Through the rational decision making model, these alternatives can be properly addressed while also outlining a means to arrive at the best possible decision. Management however, must guard itself on making unrealistic assumptions through the use of the 8 steps in the process. Management must also be cognizant to not skip steps of the process. Each step builds on the other. Although this process can become time consuming, the added benefit of arriving at a rational decisions makes the additional time worth it (Erdogan, 2006).

Are any of the decision-making traps discussed in our text in danger...

In particular, the overconfidence bias can be particularly harmful within question 4 of the self test. Management may believe that they are impervious to error and through experience, have perfect judgment. This overconfidence has been the foundation for many of the more dramatic errors in judgment within the business world. The inability of Kodak to innovate to digital technology, the introduction of new Coke, and the Ford Edsell, are just a few errors of overconfidence. The text indicates two very telling statistics regarding overconfidence. According to the text, 82% of drivers surveyed stated that they believe they are in the top 30% of safe drivers. Likewise, 86% of Harvard Business School student believe they are better looking than their peers. As such, management must be fully aware of this bias and guard against it. This is particular true as their decision to add an additional shift, can have implications on the overall profit and loss statement of the business (Duarte, 1994).
Anchoring could also become potentially hazardous to management. Management in their rush throughout the day may overlook very telling statistical information relevant to the decision making process. Anchoring refers to the tendency of management to…

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References

1. Erdogan, B., Liden, R.C., & Kraimer, M.L. (2006). Justice and leader-member exchange: The moderating role of organizational culture. Academy of Management Journal, 49,395 -- 406.

2. Duarte, N.T., Goodson, J.R., & Klich, N.R. (1994). Effects of dyadic quality and durationon performance appraisal. Academy of Management Journal, 37, 499 -- 521.

3. Heneman, R.L., Greenberger, D.B., & Anonyuo, C. (1989). Attributions and exchanges: The effects of interpersonal factors on the diagnosis of employee performance. Academy of Management Journal, 32, 466 -- 476.
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