Psycology-Decision Making

Running head : PSYCHOLOGY-DECISION MAKING

Psychology-Decision Making

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Abstract

How does it happen that managers take decisions which lead them to failures ? What decision-making mechanisms do they inactivate when they take such decisions ? This is aimed at analyzing these psychological implications

Psychology Decision Making

Introduction

It is not rare that managers take decisions which lead them to failure These failures often become the headlines and the top stories of newss and magazines . However , has anyone analyzed the psychological implications of

such decisions ? What psychological theories could explain such managers ' behavior , and what useful recommendations could be drawn from such cases

Problem identification

The case of Sears , when owned by Edward S . Lampert , is the most recent example of a large managerial mistake , having led to significant financial and economic losses . On January 29 , 2008 Lampert pushed out his chief executive , but what is more important , he took decision to distance himself from the day-to-day management of his enterprise Until now , the heads of several major departments , like marketing and merchandising , reported directly to Mr . Lampert , even though he has no background in retailing or advertising (Barbaro , 2008 . It is crucial to understand , how Lampert came to the idea of day-to-day management of his enterprise , although he did not have enough professional skills for that Theoretical background

It is stated , that we are likely , social constructed individuals . Our experiences , our cultures , our social , shape our motivations , our desires , and our beliefs about the world we encounter (Plous , 1993 Our management decisions are shaped are also shaped under the impact of business environment and the objectives we expect to meet in our management activity . We tend to take decisions , which are primary based on our perception of the world around us (Connolly , 2000 . One of the major problems in management decision making is in that a person can hardly be objective in taking decisions . The lack of objectivity leads to the situation , when we do not take into account multiple environmental factors , impacting our decisions

Evidently , there cannot be any better explanation to Lampert 's decision , that the self-perception theory . This theory deals with the human perceptions and the ways they incorporate their perceptions into their daily behavior (Plous , 1993 . To be clear , Lampert 's expectations and beliefs into his managerial skills and the ability to cope with a large retail enterprise were not justified from the start . In this case the major question to be answered was what am I to do to make this enterprise profitable ' Trying to answer this question , and taking decisions in the discussed framework , Lampert has concluded that the best solution for the situation would be tying himself to the daily company 's activity . Moreover , it was not enough for him to stay ahead he had to manage , but this decision lacked theoretical and practical foundations . This is how Lampert 's pseudo opinions impacted the overall performance of the company (Plous , 1993 . Respondents are influenced by pseudo opinions when...