The Manager As Decision Maker Rational Decision Making -decisions are consistent,value-maximizing choices within specified constraints managers assumed to make rational decisions Assumptions of Rationallity-decision maker would: -be objective and logical -carefully define a problem -have a clear and specific goal select the alternative that maximizes the likelihood of achieving the goal -make decision in the firm's best ecomonie interests managerial decision making seldom meets all the tests ©Prentice Hall,2002 6-11 The Manager As Decision Maker Rational Decision Making – decisions are consistent, value-maximizing choices within specified constraints – managers assumed to make rational decisions – Assumptions of Rationality - decision maker would: – be objective and logical – carefully define a problem – have a clear and specific goal – select the alternative that maximizes the likelihood of achieving the goal –make decision in the firm’s best economic interests • managerial decision making seldom meets all the tests © Prentice Hall, 2002 6-11