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Managerial Decision-Making Tools and Ethical Theories

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Evaluate managerial decision-making tools using different ethical theories .

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Evaluate managerial decision-making
tools using different ethical theories

Since the order does not specify which tools or ethical theories, I will go with the standard array of most texts. Please let me know if I can add anything.

Three are relevant for managerial accounting:
Strategic position analysis: this is a quantitative method that deals with how the firm competes with others and advances market share.

Cost driver analysis: this is another quantitative method dealing with cost control.

Value chain analysis: this is more complicated, since it deals with the entire mode of production, from raw materials in the ground to the item on the shelf.

For managerial operations:
Operations research (a broad category): This deals with how the functional units of the firm interact and where interaction shows weakness or lack of coordination.

Life-cycle systems engineering: This deals with certain products that have limited life cycles, that is, that eventually wear out or become obsolete.

Systems dynamics: This is almost identical to operations research, except it has to do with the product rather than the firm. It's about how the technology, labor and management all come together to produce an object of value.

Optimization: This is less quantitative, since it deals with the best "fit" (concerning any decision) for a given product, a given amount of capital, etc. It must take context into account.

Now, these may be more technical than what you are studying. Most of these can be reduced to general decision making concepts:
The three main categories are:

Psychological approaches: managers base derisions on their own self-image, or what they think they need to succeed. This is very subjective and has everything to do with personal style and experience.

Cognitive approaches: This is a more logical method that takes all relevant variables into account and comes up with the most logical solution. Think of Mr. Spock here.

Normative approaches: This just means that ethical goals are one of the variables that you place in your decision model. It deals both with intentions and results. It deals with categories such as good and bad, just as much as more quantitative variables such as cost or efficiency.

What of ethics?
The quantitative methods all believe that they are ethic-less, but of course, they are wrong. What are the ethical ...

Solution Summary

The managerial decision-making tools and ethical theories are examined.

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Managerial Decision Making: Example Problems

Sources need to be referenced at the end of the written response.

1. Discuss your most recent decision to purchase a major item i.e. entertainment center, automobile, home, etc. In what way did the acquisition utility or the transactional utility come into play for you?

2. Explain the availability, representativeness, and affect heuristics. In your answer, compare the three and discuss the positive and negative aspects of each.

3. Lately, the stock market has experienced unprecedented volatility - wild ups and downs. Discuss how stock trading has created a lot of this volatility and the decisions for stock traders to buy and sell wildly in terms of hyperbolic discounting.

4. Bernard Madoff, a once highly regarded member of the Wall Street community, recently pleaded guilty of running a $50 billion ponzi scheme. Research the driving forces behind his seemingly unethical behavior and discuss your findings. How did favoritism and bounded ethicality come into play in this case?

5. Read the case Fairness in Punishment from the link: http://www.solutionlibrary.com/business/management/managerial-decision-making-fairness-in-punishment_7nel. Discuss the Decatur School Board's decision to adopt a "no tolerance on school violence" in terms of fairness. How did implicit attitudes, perhaps, influence the school board's decision to punish such a disproportionate number of African-American students?

6. Recently, the American International Group (AIG), a global insurance and financial services organization, accepted billions of dollars from the United States Government in order to remain solvent and in operation. After receiving this money, the organization decided to pay over $160 million in bonuses. Discuss the ethical problems associated with this decision. Could in-group favoritism play a role in this decision? If you were the CEO, what decision would you have made?

7. Research the subject of the Enron and Arthur Andersen relationship. Discuss your findings in terms of the application of ethics in the various decisions made by the Enron and Arthur Andersen teams. How did bounded ethicality play a role in these decisions?

8. Eventually, the United States and Iran will have to sit down and negotiate the use of nuclear power. Discuss the issues that could be involved in such a negotiation. What cognitive mistakes might be made by the negotiators in this case? How could these mistakes be overcome in order to reach an acceptable agreement?

9. Assume that you are part of a mediation team that has been brought in to help overcome an impasse between negotiators who are deliberating the use of embryonic stem cells for a research project. The decision makers are polarized along ethical and religious lines. Since this is a potentially emotional issue, what would you do in order to break this impasse? How could the fixed pie concept come into play in this situation?

10. Recently, General Motors and the United Auto Workers had to sit down and negotiate a change in the labor agreement, in order to keep the company from going bankrupt. Consider what might have gone on during these negotiations and discuss how framing might have been used, and what issues might have been discussed, in order to reach an acceptable agreement.

11. Research Kurt Lewin's model for change. Then, discuss the three-staged de-biasing process (unfreezing, change, and refreezing) and explain the mechanisms that make each of them hard to implement. In your discussion, include how you believe such a process can help you, personally, to improve your decision-making.

12. Describe the concept of analogical reasoning. Then, considering your last purchase decision, discuss how analogical reasoning could have helped you to improve your decision and increase your satisfaction with the product or service that you purchased.

13. Bazerman and Moore suggest that we should understand the biases of others. Discuss this concept in terms of why it is important for us to understand other peoples' biases. In your discussion, focus on how you might be able to improve your decision-making in a group setting.

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