Uncertainty, financial catastrophe
Over the years, understanding the effects of managing under uncertainty has gradually made arriving at the appropriate decisions complex in practice, than previously perceived in theory. For instance, the events of unfolding financial catastrophe and unpredictable economic downtown are the latest to characterize the dynamic business environment. Nevertheless, the management stands no claim to distance itself from making decisions in such environments as uncertainty is inseparable and exist as a compelling reality in business operations. In practice, complexity of arriving at the suitable decision arises when the decision making panelists fail to adequately predict the aftermath of each action adopted. This reveals the weakness arising in
human beings as imperfect decision makers when compared with ideal rational-choice models(Murray, Poole, & Jones, 2006).
All the same, for many problems the solution found by heuristic algorithms is satisfactory, there are plenty of areas where the knowledge of the accuracy of the obtained minima is mandatory (Ermol, Makowski, & Marti, 2012). Positioning the management to deal with residual uncertainty is essential to downgrade and lower its severity by mediating across its central determinants.
[...] This would heighten the changing level of uncertainty surrounding business operations in the affected regions. MANAGING UNDER UNCERTAINITY 6 Alternatively, during the interpretation of the feasibility report a review is indispensable to the implementation of a phased approach given the changing political nature. Political stability forms a vital component drawing investors in a specific zone. This was a fading feature as the Arab spring swept from one nation to another. In the above mentioned situation, it represents definite facts of factors that would limit the investment life and thus delay the recovery of the invested resources. [...]
[...] The failed project owing to the decision of the merchant company's management pokes holes to their accountability of making sound decisions. It is essential to review the circumstance of the variables leading to their decision. Firstly, the management seems to error by pegging their decisions to the great moderation period over the last decade, where no major political turmoil was ever reported. Secondly, the absence of a disruptive factor affecting investments in the region persuaded them in putting off the civil unrests that accelerated to haunt them for their decision. [...]
[...] Here, the viability of the project requires a revaluation of factors affecting the level of uncertainty in the designated region. Secondly, embracing a broader scope is essential to ensure the decision making process considers beyond the horizon highlighted in the simple assumptions. Lastly, the hostility arising from the civil unrests has a contagious effect to other MANAGING UNDER UNCERTAINITY environmental elements, which would work in harmony to create a multiplier effect. This would call for adjustments to the initial plan. [...]
[...] Positioning the management to deal with residual uncertainty is essential to downgrade and lower its severity by mediating across its central determinants. Reviewing a Management Decision The effect of the Arab spring sweeping across countries in Northern African and Asian continents serves a continual indication of results of civil uprising. Although such protests disrupted the normal operations for its destructive nature sweeping across various sectors, the corporate sector topped the list of the worst hit. Ordinarily, investors prefer subjecting themselves to less uncertainty; a key input consideration during capital budgeting decisions. [...]
[...] From Simon's view on decision making, a realistic approach eases the cost of bearing uncertainty during decision making. Further, the theory suggests that usual administrative behavior in reaching decisions fails the efficiency test when the panelists blind to the usual business and fail to realize the invisible facts unique to the problem. Efficiency in decisions is attained when the agents experience pure rationality, a factor substantially missing in practice (Richter, 2008). From the MANAGING UNDER UNCERTAINITY onset of the uprising, the situation imposed a unique nature that would alert the management while approaching the investment dilemma. [...]
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