Eclectic Approaches to Decision Making Harrison, Ch. 5

1. Eclectic Approaches to Decision MakingHarrison, Ch. 5 Fred Wenstøp

2. Eclectic approach 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 Disciplines Philosophy Psychology Sociology and social psychology Law, anthropology and political science Economics and statistics Mathematics Overview Fred Wenstøp

3. 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 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 The Rational Model Fred Wenstøp

4. The Organizational Model(Cyert & March) • Characteristics • 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 Fred Wenstøp

5. 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 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 The Political Model Fred Wenstøp

6. 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 Fred Wenstøp

7. The Interdisciplinary Aspects of Managerial Decision Making Economics Statistics Utility and probability Social psychology Sociology Philosophy Values and ethics Group behavior The decision-making process Environ- ment Individual behavior Models and simulation Law Anthropology Political science Psychology Mathematics Cybernetics Fred Wenstøp