Answered: Nila and Manoj cannot agree on the best…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Nila and Manoj cannot agree on the best way to handle a customer complaint. This customer has been a good customer for Nila in the past, and while she is training Manoj to take over this customer account, she does not agree with how he always manages them. Their manager has decided to sit down with both of them together to see how to best resolve this customer complaint. Which type of conflict resolution is their manager using?

	a.	alternative dispute resolution
	b.	interpersonal problem solving
	c.	game theory
	d.	compromise
	e.	smoothing

Definition Definition Economic decision-making framework that analyzes how different players optimize their outcomes with given pay-offs corresponding to their available strategies. The assumptions of game theory are: The number of players or competitors are finite/limited; All participants are rational The rules of the game are known to every player; and Each participant has a finite set of actions. A common way in which game theory is presented as an ( m x n ) matrix in which m represents the strategies of row player and n represents the strategies of column player. There are several limitations of game theory: Many businesses have a large number of competitors, and selecting an optimal strategy in these circumstances is difficult; Real-life business operating environments are full of uncertainty and difficult to model as a game theory; and The assumption of rationality and utility maximization isn't always an accurate portrayal of human nature.

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