MANAGERIAL DECISION

MAKIING UNDER RISK AND

UNCERTAINTY
Summary

MARCH 17, 2014

SAIM ABDULLAH
Sebtion b
12f-8037
 Summary of the Case Study
In this case study writer voices about mangers, manager’s decisions and risks.
The writer says that the managers did not act in accordance with recommended
standard rules, plainly expressed their failure to handle many risky situations due to
lack of information and expressed their fear of doing something wrong e.g. making
poor decisions if you discuss the managers about risks so you will receive different
answers from it like that different types of risks like financial risks, fire risk etc. He
also tells about the methods for manager to overcome the risks. The analysis of the
managers’ behavior tells us that it would be beneficial to do a official study of several
of the decision problems they deal with. When doing such a formal analysis of
decision conditions, computer-based decision tools would be useful, e.g. in order to
do sensitive analysis, risk estimations and to estimate the outcomes of different
scenarios. Today only a few of the managers use computers when making decisions
and none of them actually use any type of decision analysis tool.
Furthermore managers have different concepts about risks like If they will
take risks there will return.
Many managers says that risk is controllable and they give the different logics
and different methods to control that like If you have correct information and have
sufficient knowledge about problem then you can easily overcome risk.
Furthermore writer says in this case study that many of the managers said
that they did not have the necessary skills to estimate different types of risks and
they therefore make their decisions based on intuition and gut feeling. Most of the
managers also pointed out the lack of information as a source of risk and
uncertainty. Moreover, all of them thought that risk could be managed if one has the
correct information and good knowledge about the problem. According to the
managers it is relatively easy to identify whether a person is risk-prone or risk-averse.
Some of them said that risk-prone persons are those who want to make progress and
go forward, but some says that risk-prone persons work more independently than
others “they do not have to ask about everything.”
Concluding the whole summary of case study is that managers should take
decisions very carefully and take risks bravely for gain more outcomes because
managers should be brave .A strict computer-based approach that attempts to help
the managers make better decisions by recognizing the differences between real and
perfect decision-making, would certainly be of great value for the managers in their
decision making procedures.