Менеджеры и менеджмент (Executives and Management). Коломейцева Е.М - 23 стр.

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CLASSICAL MODEL
The classical model
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of decision-making is based on economic assumptions. This model has arisen within the
management literature because managers are expected to make decisions that are economically sensible and in the or-
ganization's best economic interests. The assumptions underlying this model are as follows:
1. The decision maker operates to accomplish goals that are known and agreed upon. Problems are precisely for-
mulated and denned.
2. The decision maker strives for conditions of certainty, gathering complete information. All alternatives and the
potential results of each are calculated.
3. Criteria for evaluating alternatives are known. The decision maker selects the alternative that will maximize
the economic return to the organization.
4. The decision maker is rational and uses logic to assign values, order preferences, evaluate alternatives, and
make the decision that will maximize the attainment of organizational goals.
The classical model of decision-making is considered to be normative
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, which means it defines how a decision
maker should make decisions. It does not describe how managers actually make decisions so much as it provides guide-
lines on how to reach an ideal outcome for the organization. The value of the classical model has been its ability to help
decision makers be more rational. For example, many senior managers rely solely on intuition and personal preferences
for making decisions. In recent years, the classical approach has been given wider application because of the growth of
quantitative decision techniques that use computers. Quantitative techniques include such things as decision trees, pay-
off matrices, break-even analysis, linear programming, forecasting, and operations research models. The use of comput-
erized information systems and databases has increased the power of the classical approach.
In many respects, the classical model represents an "ideal" model of decision-making that is often unattainable by
real people in real organizations. It is most valuable when applied to programmed decisions and to decisions character-
ized by certainty or risk, because relevant information is available and probabilities can be calculated. One example of
the classical approach is the model developed by a Canadian organization for scheduling ambulance services.
ADVANTAGES AND DISADVANTAGES OF PARTICIPATIVE DECISION MAKING
Whatever group techniques managers use for decision-making, there are clear advantages and disadvantages com-
pared with individual decision-making. Because managers often have a choice between making a decision by them-
selves or including others, they should understand the advantages and disadvantages of participative decision making.
ADVANTAGES. Groups have an advantage over individuals because they bring together a broader perspective
for defining the problem and diagnosing underlying causes and effects. In addition to enriching problem diagnosis,
groups offer more knowledge and facts with which to identify potential solutions and produce more decision alterna-
tives. Moreover people who participate in decision-making are more satisfied with the decision and more likely to sup-
port it, thereby facilitating implementation. Group discussion also can help reduce uncertainty for decision makers who
may be unwilling to undertake a big risk by themselves. Finally, group discussion enhances member satisfaction and
produces support for a possibly risky decision.
DISADVANTAGES. Group decisions tend to be time-consuming. People must be consulted, and they jointly di-
agnose problems and discuss solutions. Moreover, groups may reach a compromise solution that is less than optimal for
the organization. Another problem is groupthink. Groupthink
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is a "mode of thinking that people engage in when they
are deeply involved in a cohesive in-group, and when the members' strivings for unanimity override their motivation to
realistically appraise alternative courses of action." Groupthink means that people are so committed to the group that
they are reluctant to disagree with one another; thus, the group loses the diversity of opinions essential to effective deci-
sion making. For example, many of the people involved in making the movie The Bonfire of the Vanities had doubts
about casting decisions and changes in the story line, but no one was willing to voice these opinions. Director Brian
DePalma says he had some reservations as well, but because everyone else seemed to be in agreement, he convinced
himself that making the changes was the right decision.
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Finally, there is no clear focus of decision responsibility, be-
cause the group rather than any single individual makes the decision.
One example of the disadvantages of group decision making occurred when a coalition at Citibank refused to
change the practice of "parking"-the bogus transfer of foreign exchange deposits to shift bank profits to countries with
low tax rates. The line between illegal and legal activities was hazy, and groupthink appeared–people were unwilling to
disagree with the current practice because group norms supported high profits and reduced taxes. Group members were
willing to compromise their values, groupthink reduced dissent, and there was no clear focus of responsibility because
everyone had agreed to the potentially illegal practice.
IMPROVING DECISION-MAKING BREADTH AND CREATIVITY
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Classical model A decision-making model based on the assumption that managers should make logical decisions that will be
in the organization's best economic interests.
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Normative An approach that defines how a decision maker should make decisions and provides guidelines for reaching an
ideal outcome for the organization.
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Groupthink A phenomenon in which group members are so committed to the group that they are reluctant to express con-
trary opinions.

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