Analysis of the Behavioral Decision Making Theory
| Analysis of the Behavioral Decision Making Theory |
Introduction:
For many of us, when we take a look at a multinational corporation, we become fascinated by its image, such as its revenue, massive head quarters, the span of chains it has in different countries etc. We tend to judge by its magazine features and attributes. We measure the company’s success based on those attributes. However, success for every company, no matter the size, always starts from the interior. In order to become reputable, the company needs to have skilled workers, solid internal resources, plenty of capital, and most important managers and executive leaders. In general it’s the company’s strength of management that determines how the company will operate. The theory of management can be traced back to the times of the pyramids in Egypt. As time went by, different ideals and perspectives about management emerged. One of the most notable was during the 1950’s, when a man named Herbert Simon laid the foundation for a management theory based on a psychological perspective: The Behavioral Decision making theory. In short, the theory emphasized that, managers don’t have all the information on all possible consequences and alternatives, created from their decisions. From this perspective, this theory can be applied to any professional setting. The fact is every manager, in every company has to go through this cognitive limitation process, when it comes to decision making, which makes this theory applicable and true in its terms.
Biography/History:
Herbert Simon as a child was educated in the Milwaukee’s public system schools where he started to develop interests in science. His parents seemed to have the most influence on his extra ordinary thinking. They installed in him, to be curious, and to question the unthinkable. Upon graduating high school, Simon attended The University of Chicago and pursued a degree in political science. During his tenure at The University of
Introduction:
For many of us, when we take a look at a multinational corporation, we become fascinated by its image, such as its revenue, massive head quarters, the span of chains it has in different countries etc. We tend to judge by its magazine features and attributes. We measure the company’s success based on those attributes. However, success for every company, no matter the size, always starts from the interior. In order to become reputable, the company needs to have skilled workers, solid internal resources, plenty of capital, and most important managers and executive leaders. In general it’s the company’s strength of management that determines how the company will operate. The theory of management can be traced back to the times of the pyramids in Egypt. As time went by, different ideals and perspectives about management emerged. One of the most notable was during the 1950’s, when a man named Herbert Simon laid the foundation for a management theory based on a psychological perspective: The Behavioral Decision making theory. In short, the theory emphasized that, managers don’t have all the information on all possible consequences and alternatives, created from their decisions. From this perspective, this theory can be applied to any professional setting. The fact is every manager, in every company has to go through this cognitive limitation process, when it comes to decision making, which makes this theory applicable and true in its terms.
Biography/History:
Herbert Simon as a child was educated in the Milwaukee’s public system schools where he started to develop interests in science. His parents seemed to have the most influence on his extra ordinary thinking. They installed in him, to be curious, and to question the unthinkable. Upon graduating high school, Simon attended The University of Chicago and pursued a degree in political science. During his tenure at The University of
Cited: Gale Group. (2008, July 1). "Herbert A. Simon. " Notable Scientists: From 1900 to the Present". Hitt, M Morecroft, J. D. (1985). Rationality in the Analysis of Behavioral Simulation Models. Management Science , pg.901. Morecroft, J. D. (1985). Rationality in the Analysis of Behavioral Simulation Models. Management Science , pg.902. Simon, H. A. (1973). Technology and Environment. Management Science , pg.1100.