The paper "Strengths and Weaknesses of the Decision-Making Process in the Movie Margin Call" is a perfect example of a case study on psychology. In life, most of the decision-making takes place in an environment where constraints, consequences, and goals are not known. It is, therefore, common to use theories such as probability, control, determination, and information theories to deal with imprecision (Bellman & Zadeh, 1970). In research, a large number of social scientists apart from the psychologist, have been studying and trying to come up with a suitable explanation for individual behavior.
Many theories and evidence-based information from psychologists and economists revolve around the decision-making aspect of individuals (Edwards, 1954). Using a mathematical, psychological, and economic point of view and theoretical frameworks, decision-making can be described as a dynamic process full of complexities fuelled by fluctuating uncertainty. Using psychological, personal values, and moral based perspectives this paper analyses the critical decisions made in the case study margin call. Through a systematic process, the paper will seek to identify relevant frameworks, theories, and models to, distinctively discuss the strengths and weaknesses of the decisions made in the case study. Decision Making Psychological and Ethical perspective From a psychological point of view, decision-making entails individuals’ preferences, needs, and values they seek in life.
A psychological view of decision-making has a lot to do with moral knowledge and ethical beliefs. Psychology helps us understand why sometimes individuals may face ethical dilemmas negatively leading to the question of whether they understand their ethical standards. According to De Cremer, (2009) moral knowledge is an interpretive process such that an individual is able to recognize the existence of a moral problem whenever they are facing several issues or in particular situations.
In the event such recognition is present, individuals then have the mandate to recognize that their potential choices are capable of affecting the welfare, interests, and expectations of themselves or others that may conflict with their moral standards. A recent study revealed that individual differences are a result of how people identify and deduce moral issues (De Cremer, 2009). The fundamental idea in many studies is that moral awareness remains to be a rational process. Brown (2005) goes on to note that Decision-making models Two main models are used in the making of decisions.
These are; the rational design and Simon’ s normative model. The rational model consists of four structured actions. The first step is the identification of the problem. In the case study, the problem was the looming crisis due to the depreciation of the assets held by the business. The second step involves generating possible solutions to the problem at hand. The top management sat down and reviewed all the possible solutions, bearing in mind that the company was not willing to bear any losses.
John goes on record saying that there are three ways to survive; be the first, or cheat. The next step is to select the best solution. The best solution according to the Margin Call case study was to be the first and start selling its devalued assets. This maximized the utility for the firm. The last step involves implementing the said decision. This was one in the morning when the traders were given incentives to motivate them to sell more of the assets.
They were also told the whole truth regarding their future with the company.
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