Question

Select 5 key terms from the photo provided and define them in detail.

aoiding think and ts potential consequences KEY TERMS Balance sheet Bounded rationality Cost-benefit analysis (CBA) Decision-making alternatives Elite theory Garbage can model Groupthink Incrementalism Participatory model Political model Rational model Satisficing REFERENCES

Answer 1

Balance sheet is a document that lists and itemizes assets and liabilities of an organization. It also contains the capital details, income and expenditure details. All these information on balance sheet are usually time bound (for a given period) and represents overall valuation of the organization.

Bounded rationality is an idea that decision makers are limited by their experience. This means, the limit of rationality and the prowess of decision making is restricted by the amount of knowledge a decision maker has. Other factors in this also includes their intellectual ability and the amount of time to make a decision. Overall bounded rationality says that a decision maker is completely dictated by his/her experience, knowledge, ability and the time to make a decision.

Cost-benefit analysis is a process (or model) of decision making where each alternatives are weighed against their cost and benefits. The main idea behind the cost-benefit analysis is to choose the alternative with the best value, given the restrictions. A value of an alternative is determined by benefits divided by the cost. The higher the value, the better is the alternative.

Elite theory is an idea in the field of political science but it can also be used in business environment. The elite theory postulates that a small portion of the community (usually the elite) and the entities within their network hold the most power. This is regardless of the type of government (democratic, autocratic, social, etc). In analogy, this can be seen in the organizations as well. A small portion of employees (usually higher management) and their network (close associates) hold most of the power in an organization. And this is irrespective of the type of organization.

Garbage can model is process of decision making in an organization is in the midst of anarchy. The model is quite an irrational way of decision making and believes that problems, solutions and the stakeholders are all disconnected. Any solution to a problem comes through mere chance in an organization. This is based on organization anarchy and chaos.