BUSINESS ADMINISTRATION
STRATEGIC MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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ask a colleague for advice
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calculate the probability of failure
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have a sense of certainty and not look at any risk
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do extensive research to identify risk
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Detailed explanation-1: -Managers make problem‐solving decisions under three different conditions: certainty, risk, and uncertainty. All managers make decisions under each condition, but risk and uncertainty are common to the more complex and unstructured problems faced by top managers.
Detailed explanation-2: -A decision that is relatively certain can be made based upon the desired outcome. For example, a decision to loan or borrow money can be based on a specified rate of interest. This decision is based on the relative certainty of the amount of money that will be generated or expended by the decision.
Detailed explanation-3: -How do we make decisions when we have certainty? Examples of certainty include the need to meet customer, contract or regulatory requirements. The outcomes (consequences) are known to you, should you fail to comply.
Detailed explanation-4: -In making decisions under risk, you can predict the possibility of a future outcome. But when making decisions under uncertainty, you cannot. Risks can be managed while uncertainty is uncontrollable. You can assign a probability to risks events.