...Public interest theory seeks to establish a method of understanding the interests of public groups based on a number of assumptions. Typically actions that are deemed in the public interest generally occur when governments seek to intervene in situations where market failure occurs. Market failure may arise due to monopolies, barriers to entry for new businesses, and information gaps. Public interest theory makes three assumptions. First, interest of consumers is translated into legislative action through operation of the internal marketplace. Secondly, agents will seek regulation on behalf of public interest. The third assumption being that government has no independent role to play in the development of regulation. In 2002 the Sarbanes-Oxley Act was created in America to enforce greater regulation and compliance for financial reporting and corporate governance. This Act was created in response to corporate scandals involving larger companies like Enron and Tyco International, and thus public interest theory suggests the government’s response was as a result of market failure due to inaccurate auditing and accounting procedures. The premise of private interest theory is that governmental bodies and political leaders use their power to coerce businesses through taxation, regulation, and subsidies. The Basic assertion of privation interest theory is the law of diminishing returns which exists between group size, and costs of using political process. A second assumption is government...
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...Normative Decision Theory As a manager for a smaller video game development company we are currently deciding if we should go to a telecommuting policy, and increasing employee input in the decision policy. The main reason that we are thinking about drafting a telecommuting policy is to combat the increased prices of gasoline and longer commute times. We realize that if we did implement a telecommuting policy it would also be more efficient to give our workers more say and input in development so that way everyone is one the same page. Management believes that using the normative decision theory especially implementing the tree theory of it would be best in helping us come to a decision. The use of the tree theory asks eight questions, some of which may be skipped depending on how you answer, to figure out the level of participation in decision making. After putting our company thru the tree theory we have determined we have: high quality requirements, high commitment requirements, no need for real leadership, well stated problem, low commitment probability, moderate goal congruence, and possible subordinate conflict. The main problem management has faced so far is that our company has a very unique circumstance in that we offer a unique product and are a smaller company which allows our employees more freedom. We have decided that going to telecommuting policy would be best for the company, anyway that we can help our employees to save money will hopefully get them to work...
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...Laroche being prescriptive and descriptive Laroche follows a prescriptive method in arguing for decision making theory. He argues it is a social representation which will improve decision making. In his abstract he writes “The paper argues that […] the concept of organizational action should not be opposed to decision and decision-making. Decision and decisionmaking are best understood as social representations […]. As organization members think and act in terms of decision-making, a theory of organizational action cannot simply do without a theory of decision-making. “ showing clearly that he is prescribing a certain way of looking upon decision-making. This is further strengthened in the conclusion where he for example writes “This paper argued that decision-making is best understood as a process of reality creation through organization members’ representations of their own role and activity.” The extent to which Laroche is prescriptive is debatable however. He acknowledges descriptive factors such as when he claims in conclusion that “no theory of action can develop without integrating the fact that, to a significant extent, organizational members think and act in terms of decision-making... a relevant phenomenon for a theory of action, not a marginal one”. He lists examples from empirical studies in describing the decision-making process: “bureaucratic processes (e.g., Cyert and March 1963, Carter 1971), political processes (e.g.. Bower 1970), psychological...
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...Game Theory in Business Decision | | | Content 1. Introduction -------------------------------------------------------------------- P.2 2. Main Models of Game Theory ---------------------------------------------- p.3-4 3. Nash Equilibrium ------------------------------------------------------------- p.5 4. Dominant Strategy ----------------------------------------------------------- p.5 5. Prisoners’ Dilemma ---------------------------------------------------------- p.5-6 6. Daily Example of Competition of Supermarkets ------------------------ p.7-8 7. Daily Example of Competition of Mobile Market ---------------------- p.9-10 8. Daily Example of Penalty Kick in Football Match --------------------- p.11-12 9. Conclusion ------------------------------------------------------------------- p.13 10. Reference -------------------------------------------------------------------- p.14-15 Introduction Game theory is the study of how people behave in strategic situations. Game theory concerns situations in which multiple players make strategically interdependent decisions. The term interdependent means that one person’s behavior affects another person’s well-being. We can make use of game theory on different aspects such as economics, political science and even our daily life. For example, whether TV stations leads to enlarge the market shares on program production usually depends on the subsequent moves...
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...December 2010 Impact of Resource Based View and Resource Dependence Theory on Strategic Decision Making Ali Raza Nemati Riphah International University, Islamabad, Pakistan Tel: 92-345-590-5581 E-mail: aliraza.nemati@riphah.edu.pk Afkar Majeed Bhatti Riphah International University, Islamabad, Pakistan Tel: 92-333-535-9743 E-mail: Afkar_tg@yahoo.com Muhammad Maqsal Riphah International University, Islamabad, Pakistan Tel: 92-345-956-5435 E-mail: mmaqsal@gmail.com Immad Mansoor Riphah International University, Islamabad, Pakistan Tel: 92-345-580-0451 E-mail: immadmansoor@gmail.com Fariha Naveed Riphah International University, Islamabad, Pakistan E-mail: farihanaveed@riphah.edu.pk Abstract This paper aims to investigate different factors determining strategic Decision making. This study attempts to identify the role of RBV and RDT and its impact on strategic Decision making. It has been seen that different strategies has to be made to get competitive advantage keeping in mind external resources and while strategies differ when to get competitive advantage through internal resources such as Human resource and capital Resource. In this research heuristics and bounded rationality acted as moderator to strategic decision making as when decision makers (managers take decisions personal biases and heuristics also get involved. Keywords: Decision making, Resource based view, Resource dependence theory, Heuristics and biases 1. Introduction The purpose of this research paper...
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...Technology and Decision-Making Paper Allie Timbo Health Care Informatics HCS482 November 8, 2010 Richard Ong, MBA, FACHE Technology and Decision-Making Paper More than ever before, information technology is helping clinicians and health care systems improve the collection and management of data along with the ability to aid in decision–making for clinical and business issues. Information technology has led to significant improvements in quality of care, patient safety, and communication between clinicians. The key to information technology and decision-making is to develop relationships between information technology and the users to make effective decisions. Systems that support decision-making assist the user’s ability to make short and long-term decisions by providing information to make decisions concerning particular situations. Health care informatics “incorporates theories from information, science, computer science, and cognitive sciences” (Englebardt & Nelson, 2002, p. 5). Health care informatics specialists use theories, and the Data, Information, and Knowledge (DIK) Model to guide their practice, which in turn supports clinical practice and optimizes health care delivery. Systems and Informatics Theories Theories are useful in several ways. Theories form a reference point for information technology and users. Without theories users would spend time condensing information and data from empirical sources. According to John Holmes, chairperson of the American...
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...A Critical Analysis of: Investor Irrationality and Self-Defeating Behavior FIN645 Introduction For many years, finance traditionalists have held on to the theory that markets are efficient and that prices correctly reflect the information available to the market as a whole. This has come to be known as the efficient market hypothesis which was originally postulated by Eugene Fama in 1965. After a thorough statistical study of the movements of investment prices Fama concluded that “such movements were essentially random and unpredictable” (Shefrin p.75). Fama pointed out that “in an efficient market, prices correspond to intrinsic (or fundamental) value” (Shefrin p.75). In short, what the theory concludes is that it is impossible to beat the market; that no investor can ever purchase undervalued stocks or sell stocks at inflated prices. The market will always correct itself by incorporating all relevant information into the price of a security thus eliminating an individual investor’s ability to outperform. EMH has grown to become a cornerstone of financial theory and is still applied by many traditionalists when attempting to explain the behavior of financial markets. While there is much evidence in support of this theory there is an equal amount dissention. There are many who argue that there is ample evidence available that counters the central ideas of EMH and demonstrate its shortcomings such as: individuals who have shown that they can consistently...
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...Predicting Preferences Prediction involves making a statement concerning the likely value of an event or action uncertain or unknown at the time of the statement. Since the theory of probability, (inaugurated by the French mathematicians Blaise Pascal and Pierre Fermat in 1654), was developed to quantify uncertain events in terms of their likelihood of occurrence, formal prediction is now viewed as a mathematical topic involving probabilistic modeling. Indeed, the mathematician Karl Pearson said in 1907 that the fundamental problem in statistics is prediction. Prediction, however, is usually not an end goal itself, but rather means to put probabilistic bounds on the relative frequency or likelihood of occurrence of future uncertain events so that strategies or actions can be taken incorporating these predictions. Risk management needs predictive analysis, as does economic regulation, engineering control, and marketing effectiveness. This latter use of prediction often involves predicting an individual’s choice (or group’s choice) or preference over alterative options. Preference can be conceptualized as an individual’s (or group’s) attitude concerning a set of objects, and is usually formulated within a choice making context (i.e., X is preferred to Y if one would choose X over Y). In this way choice and preference are linked, and predicting preferences is akin to predicting choices. An auxiliary question is to formulate models that explain “why” or “how” the choices...
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...MODELS FOR POLICY ANALYSIS INSTITUTIONALISM: POLICY AS INSTITUTIONAL OUTPUT Government institutions have long been a central focus of political science. Public policy is authoritatively determined, implemented, and enforced by these institutions. Therelationship between public policy and government institutions is very close. Strictly speaking, a policy does not become a public policy until it is adopted, implemented, and enforced by some government institution. Government institutions give public policy three distinctive characteristics. •First, government lends legitimacy to policies. Government policies are generally regarded as legal obligations that command the loyalty of citizens. •Second government policies involve universality. Only government policies extend to all people in a society; the policies of other groups or organizations reach only a part of the society. •Finally, government monopolizes coercion in society, only government can legitimately imprison violators of its policies. The impact of institutional arrangements on public policy is an empirical question that deserves investigation. Federalism recognizes that both the national government and the state governments derive independent legal authority from their own citizens. PROCESS: POLICY AS POLITICAL ACTIVITY Today political processes and behaviors are a central focus of political science. Political scientists with an interest in policy have grouped various activities according to their relationship...
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...The Core of Management Thought and Practice “The Concept of Rationality in Decision Making” Rationality is a thinking process that employs logical, objective, and systematic methods in reaching a conclusion or solving a problem. It is the brain that works in order for the people to think more critically and it can consume more energy. Before you make a decision there are certain steps or methods that should be followed to come up with a right decision. A certain comprehensive process should be followed to limit faults. However, there are situations that people prefer to follow their intuitions which are too risky in making logical decisions. In order to maintain a rational way of thinking, ponder before making a decision. Try to test first the possibilities that would happen if you will choose the decision. Weigh its advantages and disadvantages in order to test what would benefit you more. Never trust your instincts. Given the definition and explanation of rationality, we can relate it to managers who are responsible in making a decision in a company. The most crucial and interesting job of a manager is decision making. When they decide managers prioritize the welfare of the company than their personal interest. Is Management a Science or Not? One of the continuing questions in the field of management is whether it is really considered a science or not. Many management gurus were explaining why they consider management as a science or how it is insufficient...
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...Topic: Ambiguity Aversion By - Group 5 Monysh Bandeally (07) Warada Bhagwat (08) Sayali Bhanage (10) Saona Bhattacharya (12) Shobhit Mishra (36) Introduction In decision theory and economics, ambiguity aversion (also known as uncertainty aversion) describes a preference for known risks over unknown risks. An ambiguity averse individual would rather choose an alternative where the probability distribution of the outcomes is known over one where the probabilities are unknown. This behavior was first introduced through the Ellsberg paradox (people prefer to bet on the outcome of an urn with 50 red and 50 blue balls to on one with 100 total balls but for which the number of blue or red balls is unknown). There are a number of choices involving uncertainty and normally they can be classified in two categories: risky and ambiguous events. Risky events have a certain probability distribution over outcome while ambiguous events have some uncertainty over said probability distribution. The reaction is behavioral and still being formalized. Ambiguity aversion can be used to explain incomplete contracts, volatility in stock...
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... 7- Groups and teams 8- Managing change 9- Decision making 1-Organization structure topics to you use * basic elements of organization structure : span of control , centralization , formalization , departmentalization , authority * Organization decision model : Mechanistic model and organic model * Types of organization : boundary less organization and virtual organization 2-organization culture topics to use * Three layers of organizational culture model : Artifacts, values and assumptions * Hofsted’s four value dimensions : power distance , uncertainty avoidance , individualism and masculinity * Culture’s function * Organizational culture 3- Leadership: * Characteristics of effective leadership * Types of leadership : autocratic, bureaucratic , democratic , transactional and transformational leaderships * Leadership theories : Blanchard’s situation theory and path goal theory * Leadership model : fielder’s contingency model 4- motivation: * Motivation process * Theories of motivation: Maslow’s Hierarchy of needs, Herzberg’s motivator hygiene theory , Vroom’s expected theory and Adams’s equity theory 5-perception: * The perceptual process: observation , selection and translation * Causes of perception : stereotyping , halo effects, similar to me errors , situational perception , needs and perception and attribution theory 6- Communication: * Communication processes ...
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...Business Research and Leadership Direction Unit Title: Strategic Financial Analysis and Planning Table of Contents Executive Summary 3 1.Critique and evaluate research ....... 4 2.Critically apply modern financial tools 6 3.Use main types of investment appraisal tools 8 4.Critically evaluate the importance of research 10 References 11 Executive Summary The decision making of management is very crucial and involves various analysis to be performed. There are various ratios and methods that can be useful for mitigating the risks and increasing the expected returns with investments. The financial forecast is a mix of the behaviour, perception of management alongwith various techniques used for analysis of the different options available. Critique and evaluate research in financial theory and apply that research for decision making process 1.1 Describe the economic theory of choice as an illustration under certainty. The rational behind the economic theory of choice is to choose out of certain economic outcomes and representing the preferences through maximisation of the utility function of the outcomes. As per the von Neumann-Morgenstern expected utility model (1953), which is the workhorse of recent economics, the choices are made by people, so as to get the maximum utility. These preferences are based on intuition, self interest, past experiences etc. The main idea is under certainty...
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...Technology, decision-making processes, and data accessibility have changed dramatically in recent years. This paper will discuss systems and informatics theories. The paper will confer on the Data, Information, and Knowledge (DIK) Model. The role of expert system in nursing care and medicine will be provided. Decision aids and decision support systems are used everyday providing focus, leadership and direction within technology and will be examined. The use of technology for patient and client management will be explored. An analysis of the impact of technology on healthcare and health status will be investigated. Systems and Informatics Theories Systems are “a group of interacting, interrelated, or interdependent elements forming a complex whole” (Systems, n.d., Definition). Systems describe healthcare, schools, computers, and a person. The systems are either open or closed. Closed systems are inoperable to function with others third party products and open systems are designed to allow third party products to plug in or interoperate with the system. Neither system interacts with the environment. Open systems consist of three characteristics; purpose, functions, and structure (Englebardt and Nelson, 2002). Systems can have more than one purpose based on the needs of the user. Functions that the system will need to carry out need to be identified for the system to achieve its purpose. The “systems are structured in ways that allow them to perform their functions” (Englebardt...
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...life. I have always patterned myself as a seeker. The normative theory of deontology enamors me to want more of logos. Consequentialism stats that when you make a decision you truly do not know the consequences until after the action has ended. Which is only partial to the outcome of our action. A deontologist knows that all means have a consequence and in reasoning you can know what some of those consequences are before even making that action. Such an example would be that a consequentialist jumps of a cliff in hopes that he can fly only to find that his actions did not pan out and he is splat on a ground. A deontologist argues that if he would jump off a cliff he would not fly because of the pressure he feels whenever he picks something up off the ground. Neither has studied physics but, the deontologist knows that all actions have a reaction because of rationality or a drawing of logical inferences. A deontologist will base a right or wrong action on the duty to do something or not do something, one’s own intentions and a list of established rules. So a deontologist stats that all people who cheat on their taxes are criminals, which is a principle but, a consequentialist would argue that cheating on my taxes is only wrong if the outcome is negative. So in both consequentialists and in deontology we find that there are many differences and abilities to have opinions and stick with the core of the theory. But...
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