An Introduction to Managerial Decision Making Essay

An Introduction to Managerial Decision Making Essay

Length: 4608 words (13.2 double-spaced pages)

Rating: Powerful Essays

Open Document

Essay Preview

An Introduction to Managerial Decision Making

Phar-Mor, Inc., the nation’s largest discount drugstore chain, filed for bankruptcy
court protection in 1992, following discovery of one of the largest business fraud and
embezzlement schemes in U.S. history. Coopers and Lybrand, Phar-Mor’s former
auditors, failed to detect inventory inflation and other financial manipulations that
resulted in $985 million of earnings overstatements over a three-year period.
A federal jury unanimously found Coopers and Lybrand liable to a group of
investors on fraud charges. The successful plaintiffs contended that Gregory Finerty,
the Coopers and Lybrand partner in charge of the Phar-Mor audit, was “hungry for
business because he had been passed over for additional profit-sharing in 1988 for
failing to sell enough of the firm’s services” (Pittsburgh Post-Gazette, February 15,
1996). In 1989, Finerty began selling services to relatives and associates of Phar-
Mor’s president and CEO (who has been sentenced to prison and fined for his part
in the fraud). Critics claim Finerty may have become too close to client management
to maintain the professional skepticism necessary for the conduct of an independent
The Phar-Mor case is just one of many in which auditors have been held accountable
for certification of faulty financial statements. Investors in the Miniscribe
Corporation maintained that auditors were at least partially responsible for the nowdefunct
company’s falsified financial statements; at least one jury agreed, holding the
auditors liable to investors for $200 million. In the wake of the U.S. savings–and–
loan crisis, audit firms faced a barrage of lawsuits, paying hundreds of millions in
judgments and out-of-court settlements for their involvement in the financial reporting
process of savings–and–loan clients that eventually failed.
The auditing partners of Coopers and Lybrand, like partners of other firms held
liable for such negligence, are very bright people. In addition, I believe that they are
generally very honest people. So, how could a prominent auditing firm with a reputation
for intelligence and integrity have overlooked such large misstatements in Phar-
Mor’s financial records? How could auditors have failed to see that so many of their
savings-and-loan clients were on the brink of failure? Critics of the profession suggest...

... middle of paper ...

...fluenced by decision
research has been behavioral finance. In the last decade, we have learned a
great deal about the mistakes that investors commonly make. This chapter will explore
these mistakes and apply the messages of the book to help readers become wiser
Chapter 8. This chapter outlines a framework to help the reader think about
two-party negotiations. The focus is on how you can make decisions to maximize the
joint gain available in a two-party decision-making situation, while simultaneously
thinking about how to obtain as much of that joint gain as possible for yourself.
Chapter 9. This chapter looks at the judgmental mistakes we make in negotiations.
The resulting framework shows how consumers, managers, salespersons, and
society as a whole can benefit simultaneously by debiasing their negotiations.
Chapter 10. The final chapter evaluates five explicit strategies for improving
judgment: (1) acquiring expertise, (2) debiasing, (3) taking an outside view, (4) using
linear models, and (5) adjusting intuitive predictions. This chapter will teach you how
to use the information in this book to create permanent improvements in your future

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essay about Managerial Escalator

- Examining the Extent to Which the Experience of Two Managers Fits the Concept of the Managerial Escalator Content 1) Executive summary 1.1 Outline and summary of the report 2) Introduction 3.1 A brief of the report 3) Theories 3.2 The managerial escalator 4.1 The managerial hybrid 4.2 The managerial gap 4) Findings 4.3 Comparisons of the theories and the mangers 5) Conclusion 7.1 conclusion of the report 6) Bibliography 8.1 References 7) Appendix 9.1 Interview questions / Manager References Role of the Manager Executive summary This report shows and examines the extent to which the concept of the managerial escalator fits into the work of a manager....   [tags: Managerial Gap ]

Powerful Essays
1752 words (5 pages)

Decision Making Process Model Essays

- Introduction The decision is to select an action among a number of actions that solves a given problem, that prevents a problem from happening, or that forces to apply new ideas for development. The need for understanding decision making process is increasing because the complexity of modern organizations is increasing, and because the modern organizations' effectiveness depends on the decisions made by the managers. The question is how to select the most appropriate action to solve the problem satisfying all stakeholders....   [tags: Leadership]

Powerful Essays
1923 words (5.5 pages)

The Decision-Making Process Essay examples

-   Table of Contents Introduction 1 Traditional Decision-Making Process 1 Making Rational Decisions 2 Problem Definition-Rational 3 Identify Decision Criteria-Rational 3 Weight the Criteria-Rational 3 Generate the Alternatives-Rational 4 Evaluate the Alternatives-Rational 4 Select the Optimal Solution-Rational 4 Making “Good Enough” Decisions 4 Making Intuitive Decisions 4 Making Creative Decisions 5 Global Decision Making 5 Ethical Decision Making 5 Key Aspects of the Management Process 6 Decision-Making in Today’s Changing World 6 Global Managerial Decision Making 7 Effective Global Manager 7 What It Takes for a Manager to Be Effective in a Global Scope: 8 Conclusion 8 References 9 intro...   [tags: management strategies]

Powerful Essays
2253 words (6.4 pages)

Management Accounting: Effect Decision Making Essay

- INTRODUCTION: Today, the significance of Management Accounting spreads widely throughout the globe. More companies require Management Accounting to operate their business be it a small firm or large company. Unlike financial accounting, which is used to measure financial performance of the company, managers use management accounting for long-term decision making. Additionally, by comprehending the skills in practicing management accounting and mobilizing management accounting to contribute to a company’s objectives and goals, it will eventually develop an oganisational units’ functionality (Ahrens & Chapman, 2007)....   [tags: skills, goals, counting, methed, application]

Powerful Essays
1697 words (4.8 pages)

Leadership, Negotiation, and Decision Making of Malaysis and Saudia Arabia

- ... After having the desire to change, then the leader should start selling in his vision to get the followers and to to make sure that everybody is on board. As explained earlier, this requires from the leaders great deal of persuasion and negotiation skills. The ability to establish workable networks is very important to the leaders. Since the leader needs to supervise those relationships. A leader has to listen, communicate, persuade, negotiate, and collaborate to set up effective strategies for implementation....   [tags: conclusions, implications, research]

Powerful Essays
2343 words (6.7 pages)

Management: Demographic Leadership Essay

- Introduction: John Terrill, an experienced professional with a unique approach to managing, was brought into to DGL International to correct the productivity issues evident in the technical services division. As a leader, his approach would require professionalism, as well as an alternative method of management to restore the lacking work ethic of the engineers. Through investigative research into well-defined leadership styles, behaviours and power types, the following case study questions are discussed below....   [tags: employees, decision making, power]

Powerful Essays
1774 words (5.1 pages)

Essay about Introduction of Corporate Governance: Company Law Malaysia

- Introduction of corporate governance After the 1997 Asian Financial Crisis, the investor confidence in Malaysia was severely affected. Since the issuance of the Malaysian Code on Corporate Governance in 2000, the Securities Commission Malaysia has continuously been improving their governance framework, where the code was revised and securities were amended. In 2011, the Corporate Governance Blueprint was issued, which was used as a base to deliver the Malaysian Code on Corporate Governance 2012 (MCCG 2012)....   [tags: financial crisis, principles, responsibilities]

Powerful Essays
2024 words (5.8 pages)

Leadership and Managerial Approaches to Magnet Status Essay

- Introduction Magnet hospitals are named for their potential to attract and retain qualified nurses. Magnet hospitals are facilities that have been certified by the American Nurses Credentialing Center for promoting positive patient outcomes through best practices in nursing (Upenieks, 2003). The Magnet environment fosters autonomy and professional nursing practice. Research shows that Magnet hospitals have better work environments, a more highly educated nursing workforce, superior nurse-to-patient staffing ratios, and higher nurse satisfaction than non-Magnet hospitals (Aiken, Kelly, & McHugh, 2011)....   [tags: Healthcare]

Powerful Essays
954 words (2.7 pages)

Multi-Agents for Decision Support Systems in E-Systems Essay

- Abstract: With the advent of e-systems; business and consumers have access to a plethora of information which makes the decision making process more complex. The overwhelming information flow makes it extremely difficult for decision makers to analyze the available data and make precise decisions. Under such an information intensive online environment, businesses need to make real time intelligent decisions in order to stay economically and commercially viable. Multi agent systems have the inherent ability to facilitate provision of an adequate decision support mechanism in an e-business setting....   [tags: Information Technology]

Powerful Essays
4207 words (12 pages)

Essay on Critical Thinking and Decision Making

- Critical Thinking and Decision Making In the corporate environment critical decisions must be made, sometimes quickly, whether because of changes in market conditions, corporate profits, or corporate performances. The decision-making process is vital to good management in today’s work environment. This paper will examine the relationship between critical thinking and the decision making process, explain what the textbook authors believe, and relate how both apply to today’s workplace. Critical thinking involves the ability to weigh evidence, examine arguments, and construct rational bases for generally accepted beliefs....   [tags: Corporations Managerial Decision Making Essays]

Powerful Essays
585 words (1.7 pages)