Decisions under conditions of risk is preferable

Reference no: EM13256478

It is generally agreed that decisions under conditions of risk is preferable to doing so under conditions of uncertainty primarily because for conditions of risk, mathemeatical probabilites can be assigned to each known alternative.

However it is reasonalbe to assure that different people assessing the alternatives might well assign different probablitites to each alternatives. For example say you ask two subordinates to give you their indepent opinion or to the probilities of three alternative epansion projects being succesful. One person looking at the ussue might give alternative A a 75% probability of success alternative B an 80% and alternative C a 65% chance wheareas another person might argue that the probabilities should be 80%-75%-85% respectably

As a manager faced with such ambiquity (which can often be the case in real word situation what would you do? Go with the highest average of the two? the one with the highest probability? Have yet another person come up with their be estimates? Explain

Reference no: EM13256478

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