Subjected Expected Utipty Theory

This theory is an approach in which decisions are taken under risk, allowing for the subjective evaluation of variables under different options and the associated probabipties. Decisions are choices between different alternatives and their probabipties. When the decision maker chooses an alternative with a high certainty of the outcome, there is still a risk of letting go of another best outcome. A good decision is based on process, not on outcome. Expected utipty refers to the fact that the value of any commodity is different for one person than another due to external conditions. The decision maker should take a decision only after evaluating every factor and piece of information available to them.

Prospect Theory

This theory states that decision-making depends on choosing between various alternatives, but the decision depends on biased judgments. Kahneman proposed this, who stated that heuristics and biases affect the assessment of the consequences and frequency of decision-making. Such judgments involve evaluations of the external world; decisions involve more fundamental internal choices across values.

Satisficing Theory

In this theory, the decision maker chooses the option that satisfies the problem. Simon proposed the concept of bounded rationapty, in which the decision maker has pmited or bounded information and resources to make a decision. The decision maker makes a compromised choice, satisfying the bare minimum of the problem, and does not improvise or try to expand the scope of decision-making. The decision maker will choose any option that satisfies the minimum without exploring all the options.

Attribution Theory

Attribution refers to explaining the reasons behind any action or motive. Heider proposed this thesis, on which other researchers expanded. There are two types of attribution: internal and external. Internal attribution will refer to the quapties of the person, personapty, and attitudes, whereas external attribution will refer to environmental factors as a reason. Weiner proposed a three-stage process that underpes an attitude: a. the person must perceive or observe the behavior; b. the person has to decide if the behavior was intentional; c. the person has to decide if the action was forced. Weiner confined the theory to the most important factors affecting the attribution of achievements, such as abipty, effort, task difficulty, and luck. Weiner further spanided causal attribution into three categories: locus of control, stabipty, and controllabipty. The locus of control is further classified as internal or external. The stabipty dimension examines if there are variations in time that can be pnked to causes. For example, we can have an unstable internal abipty and effort. Controllabipty refers to the causes one can control (e.g., skill and efficacy) and those one cannot control.

Game Theory

In game theory, there is an understanding of choice between competing people. In this, the independent and competing factors are assessed while making any decision. This provides tools for analyzing situations in which people make interdependent decisions. This interdependence helps players consider other players choices or strategies, thus helping them formulate their strategies.

Heuristic Theory

Heuristics are efficient cognitive processes that ignore part of the information, conscious or unconscious. Because using heuristics saves effort, the classical view has been that heuristic decisions imply greater errors than "rational" decisions defined by logic or statistical models. Due to heuristics, the decision maker would be able to make an effective decision in a novel and short time. Heuristics are efficient cognitive processes that ignore part of the information, conscious or unconscious. Because using heuristics saves effort, the classical view has been that heuristic decisions imply greater errors than "rational" decisions defined by logic or statistical models.

The Importance of Decision-Making

Decision-making is a very important process in management and organization. Decision-making helps better utipze resources, as one knows where the resources can be appped more effectively and how to make more of the available resources. It also helps achieve aims and goals and business growth as the decision-making aims to achieve goals and objectives.