Herbert Simon's Judgemental Model

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1. What model of decision making is represented in this case? Decision making is a process that involves identifying and choosing alternative solutions to achieve desired results. There are two types of models for decision making, rational model and various non-rational models (Kreitner, 2013, p.330). Rational model emphasizes on how decision should be made. While the non-rational models try to explicate how decisions are really made. There are two non-rational models, Herbert Simon’s normative model and the garbage can model. Both non-rational models of descion making are evident in this case. Because non-rational models are based on the assumptions that decision making is uncertain, decision makers do not hold complete information, and it…show more content…
In this case workers and management used judgmental heuristics in reporting and overlooking the problems. Judgmental heuristics signifies rules of shortcuts that people use to reduce information-processing demands. In making decisions both firms management and rig workers made many mistakes. These mistakes were associated with variety of biases that occurred due to using the judgmental heuristics (Kreitner, 2013, p.335). The specific biases that were present in this case are representativeness heuristic, confirmation bias, overconfidence bias, and escalation of commitment bias. The representativeness heuristic is used when people estimate the probability of an event occurring (Kreitner, 2013, p.336). This bias is present in this case because management of both firms (BP and Transocean Ltd) and rig workers underestimated the probability of the explosion. There were many signs of abnormalities, such as the more fluid was leaving than workers were putting in the well (Kreitner, 2013, p.362). The confirmation bias has two components; first subconsciously decide why it is the right decision before investing in something and second seek information that supports investing in that thing while disregarding information that does not support it (Kreitner, 2013, p.336). This bias is present in this case, because BP choose the design to build the well that was cheaper than the alternative designs by overlooking the potential risks associated with it (Kreitner, 2013, p.362). The overconfidence bias narrates to our propensity of overconfidence about estimates and forecasts (Kreitner, 2013, p.336). This bias played a major role and has strongly impacted the decisions made in this case because the management and workers were very overconfident. That’s why the management of both firms and rig workers had disagreements about the problems and other potential hazardous sings that were triggering hours

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