Transcript h5gra6820

Eclectic Approaches to Decision Making
Harrison, Ch. 5
Fred Wenstøp
Overview
 Eclectic approach
 Disciplines
 To select what appears to be
best from the various models
and disciplines
 Models
 The rational model
 The organizational model
 The political model
 The process model
Fred Wenstøp
 Philosophy
 Psychology
 Sociology and social
psychology
 Law, anthropology and
political science
 Economics and statistics
 Mathematics
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The Rational Model
 Advantages
Emphasizes the difference
between facts and values
Helps organizing objectives
Furthers consistency
Makes it possible to handle
many alternatives and
objectives at the same time
Assists at making values
well founded
Helps making values
operational
 Problems
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Many objectives are difficult
to quantify
Consequences are often
difficult to predict
Managerial preferences defy
quantification
Objectives are seldom fixed
To apply the rational model
takes time
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The Organizational Model
(Cyert & March)
 Characteristics
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Multiple changing, acceptable-level goals
Approximate sequential consideration of alternatives
The first satisfactory alternative evoked is accepted
Avoidance of uncertainty by following policy and procedures
and reacting to feedback rather than attempting to predict
consequences
 Making and implementing choices within procedures and with
the use of rules of thumb derived from experience
 Principal shortcoming
 Does not aim for long-range benefits for the organization
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The Political Model
 Requirements
Only considers policies that
differ from existing ones
Small number of alternatives
Restricted number of
consequences
The decision problem is
continually redefined
Incremental decision making
with no clear decision point
Geared towards alleviating
current problems rather than
achieving long-range benefits
 Differences from the
organizational model
Fred Wenstøp
The functions of setting
objectives and search for
alternatives are intermingled
Ends and means are not
distinct
A decision is good if most
decision makers agree on the
likely outcome
Minimal analysis of
alternatives
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The Process Model
 Features
Strong managerial emphasis
Objectives-oriented outcome
model
Oriented towards long-term
results
Strategic in orientation
 The main recommendation
of Harrison’s book
Setting
objectives
Searching for
alternatives
Follow-up and
control
Evaluating and
comparing
Implementation
Choice
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The Interdisciplinary Aspects of
Managerial Decision Making
Economics
Statistics
Philosophy
Psychology
Values
and
ethics
Utility and
probability
Social psychology
Sociology
Group
behavior
The
decision-making
process
EnvironIndividual
ment
behavior
Models and
simulation
Mathematics
Cybernetics
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Law
Anthropology
Political science
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