It is also known as Managerial Discretion Theory. The Theory is based on the concept that shareholders or owners of the firm and managers are two separate groups.
Ancient views[ edit ] Most ancient cultures, including thinkers of Ancient Greece Ancient Chinaand Ancient India lacked the concept of creativity, seeing art as a form of discovery and not creation.
The ancient Greeks had no terms corresponding to "to create" or "creator" except for the expression "poiein" "to make"which only applied to poiesis poetry and to the poietes poet, or "maker" who made it.
Plato did not believe in art as a form of creation. Asked in The Republic "Will we say, of a painter, that he makes something? Boorstin"the early Western conception of creativity was the Biblical story of creation given in the Genesis.
In the Judaeo-Christian tradition, creativity was the sole province of God; humans were not considered to have the ability to create something new except as an expression of God's work. However, none of these views are similar to the modern concept of creativity, and the individual was not seen as the cause of creation until the Renaissance.
This could be attributed to the leading intellectual movement of the time, aptly named humanismwhich developed an intensely human-centric outlook on the world, valuing the intellect and achievement of the individual. However, this shift was gradual and would not become immediately apparent until the Enlightenment.
In particular, they refer to the work of Francis Galtonwho through his eugenicist outlook took a keen interest in the heritability of intelligence, with creativity taken as an aspect of genius.
In his work Art of Thought, published inWallas presented one of the first models of the creative process. In the Wallas stage model, creative insights and illuminations may be explained by a process consisting of 5 stages: Wallas' model is often treated as four stages, with "intimation" seen as a sub-stage.
Wallas considered creativity to be a legacy of the evolutionary process, which allowed humans to quickly adapt to rapidly changing environments. Simonton  provides an updated perspective on this view in his book, Origins of genius: Darwinian perspectives on creativity. Guilford 's address to the American Psychological Associationwhich helped popularize the topic  and focus attention on a scientific approach to conceptualizing creativity.
It should be noted that the London School of Psychology had instigated psychometric studies of creativity as early as with the work of H. Hargreaves into the Faculty of Imagination,  but it did not have the same impact.
Statistical analysis led to the recognition of creativity as measured as a separate aspect of human cognition to IQ -type intelligence, into which it had previously been subsumed. Guilford's work suggested that above a threshold level of IQ, the relationship between creativity and classically measured intelligence broke down.
Kaufman and Beghetto introduced a "four C" model of creativity; mini-c "transformative learning" involving "personally meaningful interpretations of experiences, actions, and insights"little-c everyday problem solving and creative expressionPro-C exhibited by people who are professionally or vocationally creative though not necessarily eminent and Big-C creativity considered great in the given field.
This model was intended to help accommodate models and theories of creativity that stressed competence as an essential component and the historical transformation of a creative domain as the highest mark of creativity. It also, the authors argued, made a useful framework for analyzing creative processes in individuals.
Craft makes a similar distinction between "high" and "little c" creativity. Mihaly Csikszentmihalyi  has defined creativity in terms of those individuals judged to have made significant creative, perhaps domain-changing contributions.
Simonton has analysed the career trajectories of eminent creative people in order to map patterns and predictors of creative productivity.
Interpretation of the results of these studies has led to several possible explanations of the sources and methods of creativity. Incubation[ edit ] Incubation is a temporary break from creative problem solving that can result in insight. Ward  lists various hypotheses that have been advanced to explain why incubation may aid creative problem-solving, and notes how some empirical evidence is consistent with the hypothesis that incubation aids creative problem-solving in that it enables "forgetting" of misleading clues.
Absence of incubation may lead the problem solver to become fixated on inappropriate strategies of solving the problem. This allows for unique connections to be made without your consciousness trying to make logical order out of the problem. Guilford  drew a distinction between convergent and divergent production commonly renamed convergent and divergent thinking.
Convergent thinking involves aiming for a single, correct solution to a problem, whereas divergent thinking involves creative generation of multiple answers to a set problem.
Divergent thinking is sometimes used as a synonym for creativity in psychology literature. Other researchers have occasionally used the terms flexible thinking or fluid intelligencewhich are roughly similar to but not synonymous with creativity. Some evidence shows that when people use their imagination to develop new ideas, those ideas are heavily structured in predictable ways by the properties of existing categories and concepts.
The EII theory relies mainly on five basic principles, namely: The co-existence of and the difference between explicit and implicit knowledge; The simultaneous involvement of implicit and explicit processes in most tasks; The redundant representation of explicit and implicit knowledge; The integration of the results of explicit and implicit processing; The iterative and possibly bidirectional processing.
A computational implementation of the theory was developed based on the CLARION cognitive architecture and used to simulate relevant human data.New Syllabus For Executive And Professional Programmes. ICSI Notification No.2 of Introduction of New Syllabus for the Executive and Professional Programmes of the Company Secretaryship Course.
The Managerial Utility Maximisation Model. Is Profit Maximisation always the major objective of a firm? The production of goods and services in our economy today takes place within organisations, whether in the centrally planned economy or free market economy.
Any firm within these societies all have the same tendencies to acquire a . Williamson argues that managers have discretion in pursuing policies which maximise their own utility rather than attempting the maximisation of profits which maximises the utility of owner-shareholders. Furthermore, Williamson’s model implies higher output, lower price and lower level of profit than the profit- maximisation model.
The above predictions will be better understood after the presentation of the general model of managerial discretion. Goldsmiths, University of London is in South East London. We offer undergraduate and postgraduate degrees as well as teacher training (PGCE), Study Abroad and short courses.
utility maximization model The theory of consumer behavior uses the law of diminishing marginal utility to explain how consumers allocate their incomes. The utility maximization model is built based on the following assumptions.