Models of Decision-Making - Research Paper Example

Models of decision-making Decision making is a critical process in any organization. It involves identification of the problem, evaluation of the available decision alternatives and selection of the best alternative among the available alternatives. Some activities involved in the process include the information collection process, analysis process and choice activity. Some decisions may be simple to make while others are complex since they require a lot of information gathering and complex analysis.

Examples of decision making models include the classical model, administrative model and political model. Models of decision-makingQuestion one The Classical model of decision making can be utilized in the organization to make various business decisions (Li 1). This is a prescriptive method of decision making and assumes that managers are rational and logical in their decision making process and their decision will be governed by the best interests of the organization. My organization recently purchased new manufacturing equipments.

The main problem was increasing costs of servicing the old machine, low output and raw materials wastage during the manufacturing process. The management made the decision by following the classical model since the purchase decision was rational. The management followed a clear sequential process of analyzing the costs involved in servicing the previous equipment and associated benefits (Li 2). The management also conducted a cost-benefit analysis of the new equipments by factoring all associated costs and expected output to the organization.

The management also considered other alternatives including upgrading the previous equipment or leasing the equipment from a third party. After the rational and sequential analysis of the decision criteria, the management found it prudent and reasonable to purchase the new equipment instead of upgrading or leasing one from third parties. The management later bought the new machine and made a follow up to ensure it met the objectives of the decision (Li 3). Question two The administrative model is also refereed as the behavioral model or neoclassical model.

There are numerous factors which determine how a problem or decision can be classified in to the classical model, administrative and political model. For the classical model, the decisions or problems will be classified in this model if the decision aims at accomplishing a particular well-known goal (Ayobami 1). The logical criteria for making the decision should be economic interest and the decision maker should be rational. There must be conditions of certainty including complete information.

The available alternatives should be known and sequential criteria should be available for making the decision (Ayobami 4). Decision can be expressed in quantitative terms and decision consists of the best course of action. For problems or decisions to be classified in to administrative model, there should be unbounded rationality to limit the boundaries of the decision maker. The decision maker should be satisfied with the first alternative which satisfies the minimum decision making criteria.

When there are changing and different levels of goals or decision requires use of rules of thumb derived from past experience. The decision mainly relies on past experiences and decision alternatives are limited (Ayobami 8). The decision or problem should exist in uncertain situation thus non-programmed. A rational criterion is not often followed (Armesh 3). The last decision making model is the political model. For decisions or problems to be classified in this model, the decision should be made by a coalition of several people who support a particular goal.

The decision or problem should involve disagreements and conflicts among several people interested in the solution. The decision should also be complex and should aim at achieving a common goal. The decision should also involve diverse interests and bargaining or negotiation process (Armesh 5). References:Armesh, H. Decision making. Retrieved on 29th July 2012 from http://www.wbiconpro.com/483- Hamed.pdfAyobami, A.P. “Managerial decision making in an organization: a theoretical framework”.

Journal of management and corporate governace. Vol 3: 2011. Retrieved on 29th July 2012 from http://www.cenresinpub.org/MANAGERIAL%20DECISION%20MAKING.pdf.Li, B. “The classical model of decision making has been accepted as not providing accurate account of how people typically make decisions”. International journal of business and management. Vol 3, No 6 (2008) 1-50.