Normative and descriptive theories of decision making

  • Credits: 10
  • Ending: Examination
  • Range: 16sP
  • Semester: winter
  • Year: 2
  • Faculty of Business Management

Teachers

Included in study programs

Business Economics and Management

Business Economics and Management

Teaching results

Knowledge:
• General knowledge of normative and descriptive theories of decision making at the evaluation level, based on which he/she can clearly identify, analyze and compare approaches to decision situations depending on the conditions of the external and internal environment of enterprises.
• Knowledge of the priorities required for the development of society in the context of a clear and comprehensive understanding of decision making at the individual, enterprise and whole-of-society levels.
• Professional and methodological knowledge of normative and descriptive theories of decision-making, serving as a basis for innovation and originality in research and practice necessary for designing research and development or developing the field of managerial practice.
Competence:
• Critical, independent and analytical thinking in unpredictable, changing and specific conditions of managerial decision making at all organizational levels, with emphasis on linking normative and descriptive approaches, on strategic decision making in these conditions, and on decision making under conditions of technological change,
• Taking into account social, scientific and ethical aspects in guiding the further development of research in the field and society,
• The ability to present the results of research and development to the professional and scientific community,
• Responsibility for the advancement of the discipline,
• A responsible approach to self-development, the development of the field of managerial decision-making and society in the context of scientific progress.
Skill:
in the area of cognitive skills, the doctoral student can:
• Link normative and descriptive methods in decision making to the methodological procedure of decision making,
• generate and formulate new hypotheses, judgements and strategies for the further development of the science of managerial decision-making,
• evaluate normative and descriptive decision-making theories, concepts and innovations in this scientific field,
in the area of practical skills, the doctoral student can:
• apply own findings resulting from theoretical analysis and own scientific research of a complex and/or interdisciplinary nature,
• design, validate and implement new research procedures in the field of normative and descriptive theories of decision-making,
• interpret the acquired knowledge and transfer it to the application level in the conditions of corporate practice.

Indicative content

1. Normative and descriptive theories of decision making and their intersection.
2. Managerial decision-making in specific conditions
3. Strategic decision making in the context of normative and descriptive theories.

Support literature

1. BRIGGS, Rachael. Normative theories of rational choice: Expected utility. In E. N. Zalta (Ed.), The stanford encyclopedia of philosophy (Spring 2017 Edition). https://plato.stanford.edu/archives/spr2017/entries/rationality-normative-utility/.
2. CRISTOFARO, Matteo et al. Managerial and Entrepreneurial Decision Making: Emerging Issues. 2021. ISSN 3036508155.
3. FORREST, Jeffrey Yi-Lin, NICHOLLS, Jeananne , SCHIMMEL, Kurt, LIU, Sifeng. Managerial decision making: A holistic approach. B.m.: Springer. 2020. ISBN 3-030-28063-2.
4. HASLAM, Simon, SHENOY, Ben. Strategic Decision Making: A Discovery-Led Approach to Critical Choices in Turbulent Times. London : Kogan Page Publishers, 2018. 256 p. ISBN 978-0-7494-7261-0.
5. CHAI, Junyi, WENG, Zhiquan, LIU, Wenbin. 2021. Behavioral Decision Making in Normative and Descriptive Views: A Critical Review of Literature. Journal of Risk and Financial Management. 2021, roč. 14, č. 10, s. 490.
6. JANKELOVÁ, Nadežda. Managerial Decision-Making in the Context of Pandemic Covid-19 and Industry 4.0. 1. vydanie. Praha : Agentura Fáma, 2021. 87 s. ISBN 978-80-904926-1-5.
7. KAHNEMAN, Daniel. Myslenie rýchle a pomalé. Aktuell vydavateľstvo s r o., Bratislava, Slovak edition, 2019. ISBN 978-80-8172-056-7.
8. KAHNEMAN, Daniel – SIBONY, Olivier – SUNSTEIN, Cass. Noise: A Flaw in Human Judgment, 2021. 464 p. ISBN 978-0-3164-5138-3.
9. MALECKA, Magdalena. The normative decision theory in economics: a philosophy of science perspective. The case of the expected utility theory, Journal of Economic Methodology, 2019. DOI: 10.1080/1350178X.2019.1640891.
10. REMEŇOVÁ, Katarína, JANKELOVÁ, Nadežda. A Descriptive Approach to Decision Making and the Decision-Making Style. 1. Auflage. Hamburg : Verlag Dr. Kovač, 2019. Innovative Betriebswirtschaftliche Forschung und Praxis, Band 511, 139 p. ISBN 978-3-339-11218-7.
11. REMEŇOVÁ, Katarína - JANKELOVÁ, Nadežda. Decision-Making Style of Agribusiness Managers. In Agricultural economics, 2019, Vol. 65, No. 7, p. 322-330. ISSN 0139-570X.
12. REMEŇOVÁ, Katarína - JANKELOVÁ, Nadežda. How Successfully can Decision-Making Style Predict the Orientation toward Well- or Ill-Structured Decision-Making Problems. In Journal of Competitiveness, 2019, Vol.11, No.1, p. 99–115. ISSN 1804-1728.
13. THALER, Richard H. From cashews to nudges: The evolution of behavioral economics. American Economic Review, 2018. 08(6), 1265–1287.
14. ZAPPIA, Carlo. Rationality under uncertainty: classic and current criticisms of the Bayesian viewpoint. The European Journal of the History of Economic Thought, 2019. 1–33. doi:10.1080/09672567.2018.1523210.
Compulsory literature:
1. AL KINDI, Mahmood, AL LAWATI, Mutjaba, AL RAWAHI, Hani. The challenges of normative decision making in industries. 2015. International Conference on Industrial Engineering and Operations Management (IEOM). doi:10.1109/ieom.2015.7228114.
2. ARAVOPOULOU, Eleni et al. Strategic decision-making process [SDMP] in times of crisis: Evidence from Greek banks. In Journal of Business & Retail Management Research, 2018, vol. 12, No. 4, pp. 26-36. ISSN 1751-8202.
3. BERG, Nathan, BIELE, Guido, GIGERENZER, Gerd. Consistent Bayesians are no more accurate than non-Bayesians: Economists surveyed about PSA. Review of Behavioral Economics, 3, 2016, 189–219.
4. BLAKE, Bridget. Naturalistic Decision-Making by University Leaders During the Coronavirus Disease 2019 Pandemic Drexel University, ProQuest Dissertations Publishing, 2021. 28643110. https://www.proquest.com/docview/2561921011?pq-origsite=gscholar&fromopenview=true
5. BOUSDEKIS, Alexandros, LEPENIOTI, Katerina, APOSTOLOU, Dimitris, MENTZAS, Gregoris. A Review of Data-Driven Decision-Making Methods for Industry 4.0 Maintenance Applications. In Electronics, 2021, Vol.10, No. 7, p. 828 - 848. ISSN 2079-9292.
6. CALABRETTA, Giulia, GEMSER, Gerda, WIJNBERG, Nachoem M. 2017. The Interplay between Intuition and Rationality in Strategic Decision Making: A Paradox Perspective. In Organization Studies, 2017, Vol. 38, issue 3 – 4.
7. DOWNEN, Tom, Zhan FURNER a Bryan CATALDI, 2019. The effects on anchoring of increasing quantities of disconfirming evidence. International Journal of Management and Decision Making. 2019, roč. 18, č. 3, s. 309–331.
8. ELBANNA, Said, CHILD, John. Influences on Strategic decision Effectiveness: Development and Test of an Integrative Model. Strategic Management Journal, 2007, 28, 431 – 453.
9. ELBANNA, Said, FADOL, Yasir. The Role of Context in Intuitive Decision-Making. In Journal of Management & Organization, 2016, vol. 22, no. 5, pp. 642-661.
10. ELBANNA, Said, KAPOUTSIS, Illias, Mellahi, Kamel. Creativity and propitiousness in strategic decision making: The role of positive politics and macro-economic uncertainty. Management Decision, 2017, Vol. 55 No. 10, pp. 2218-2236. https://doi.org/10.1108/MD-02-2017-0113
11. FREDRICKSON, James W, IAQUINTO, Anthony L. Inertia And Creeping Rationality In Strategic Decision Processes. In Academy of Management Journal, 2017, Vol. 32, No. 3, p. 516 – 542.
12. GIGERENZER, Gerd. Axiomatic rationality and ecological rationality. Synthese 198, 3547–3564 (2021). https://doi.org/10.1007/s11229-019-02296-5
13. GORE et al.2015. Applications for naturalistic decision-making. Journal of Occupational and Organizational Psychology, 88(2), 223-230. doi:10.1111/joop.12121
14. GROENENDAL, Jelle, HELSLOOT, Ira. The application of Naturalistic Decision Making (NDM) and other research: lessons for frontline commanders. Journal of management & organization, 2016, 22(2), 173-185. doi:10.1017/jmo.2015.31
15. KALKMAN, Jori Pascal - KERSHOLT, Jose H – ROELOFS, Maike. Crisis response team decision-making as a bureau-political process. In Journal of Contingencies and Crisis Management, 2018, Vol.26, p. 480-490. ISSN 14685973. doi:10.1111/1468-5973.12243.
16. KLEIN, Gary. Naturalistic Decision Making. In Human Factors, 2008, vol. 50, No. 3, pp. 456-460. ISSN 00187208. doi: 10.1518/001872008X288385.
17. KAPLAN, Sarah. Research in Cognition and Strategy: Reflections on Two Decades of Progress and Look to the Future. Journal of Management Studies, 2011. 48:3, 665 – 695.
18. MARKMAN, Art. Slow Down to Make Better Decisions in a Crisis. In Harvard Business review, March 15, 2020. [online]. Dostupné na : https://hbr.org/2020/03/slow-down-to-make-better-decisions-in-a-crisis
19. OKOLI, Justin – WATT, John. Crisis decision-making: the overlap between intuitive and analytical strategies. In Management Decision, 2018, vol. 56, No. 5, pp. 1122–1134. ISSN 0025-1747. doi:10.1108/md-04-2017-0333.
20. OKOLI, Justin, HATAMI-MARBINI, Hamed. Managing complex crises through the lens of intuitive expertise: A naturalistic decision-making perspective. International Journal of Mass Emergencies and Disasters, 2021. (In press).
21. REMEŇOVÁ, Katarína - JANKELOVÁ, Nadežda - PROCHÁZKOVÁ, Katarína. Relationship Between Path-Goal Leadership Behavior and Decision-Making Styles According to Personal and Working Parameters. In AD ALTA : journal of interdisciplinary research, 2018, Vol. 8, No. 2, p. 210-215. ISSN 2464-6733.
22. RICH, Patricia. Comparing the axiomatic and ecological approaches to rationality: Fundamental agreement theorems in SCOP. Synthese, 195, 2018. 529–547.
23. STEPHERD, Neil Gareth, RUDD, John Maynard. The Influence of Context on the Strategic Decision‐Making Process: A Review of the Literature. In International Journal of management Reviews, 2014, Vol. 16, Issue 3, 2014, p. 340-364.
24. SULICH, Adam, SOLODUCHO-PELC, Letycja, FERASSO, Marcos. Management Styles and Decision-Making: Pro-Ecological Strategy Approach. Sustainability. 2021; 13(4):1604. https://doi.org/10.3390/su13041604
25. VARMA, Tulika. Understanding Decision Making During a Crisis. In International Journal of Business Communication, 2015, vol. 56, No. 2, p. 233-248. doi:10.1177/2329488415612477
26. ZHONG, Xiaoling, WANG, Junbo. Prospect theory and corporate bond returns: An empirical study. Journal of Empirical Finance, Volume 47, June 2018, Pages 25-48.

Syllabus

I. Normative and descriptive theories of decision making and their intersection. 1. The essence of normative theories of decision making. The basic foundations of normative models. The classical normative view of rationality. Evidence-based decision making. Shifts in the rational perception of managerial decision making in the context of Industry 4.0. 2. The essence of descriptive theories of decision making. Research advances in prospect theory. Heuristics, deviations, fallacies. Intuition. Styles of decision making in the context of the manager's competence, his value system, and the type of decision problem. The role of emotions in decision making. II. Managerial decision-making in specific conditions 3. The theory of naturalistic decision making (NDM). Contextual factors in NDM (ill-structured problems, environmental uncertainty, ill-defined or competing goals, stress, severity of consequences). Stages of development and models of NDM. Areas of focus for NDM. The intersection of NDM and organizational decision making. Perspectives on the application of NDM in different domains. 4. Ecological rationality. Contrasting understanding of heuristics in the theory of ecological rationality. The personality of the manager and the constraints arising from his cognitive capacity and environment. Adaptive decision making. Use in group decision making. 5. Managerial decision making in crisis situations. Normative models of decision making in crisis. Descriptive models in crisis. Crisis manager's skills in decision making. III. Strategic decision making in the context of normative and descriptive theories. 6. Paradigms and dimensions of strategic decision making. Rationality and bounded rationality. Politics and power. 7. Models and modes of strategic decision making. 8. Intuition and strategic decision-making. The social side of strategic decision-making. Effectiveness of strategic decision-making. Control system of the impact of the decision.

Requirements to complete the course

10 % continuous performance of assigned tasks, 30 % continuous written work (scientific essay), 60 % oral examination

Student workload

student workload: participation in consultations 16 h, preparation for consultations 32 h, processing of continuous assignments 16 h, processing of scientific state 90 h, preparation for the exam 106 h)

Language whose command is required to complete the course

Slovak, English

Date of approval: 09.02.2023

Date of the latest change: 28.12.2021