Explore The Relationship Between The Various Ways That Decision Making In Organisations May Be Described And Explained And The Methodologies To Support Decision Making

1957 words - 8 pages

Decision-making is an important part in every organisation. There are many theories on decision- making and how decision making should be approached. The main theory on decision- making is the Rational Economic Model (REM). Others include descriptive decision theory and image theory. The theory of decision- making is supported by different methods. The main methods of implementing the theories are operational research (OR)/ management science and soft systems methodology (SSM). Other methodologies to support decision-making are strategic choice. This essay will mainly look at the relationship between the REM and OR and SSM. The case study on JB Casting will be used through out to illustrate ...view middle of the document...

The next stage is evaluating each course of action against the objectives. The best choice that they could make is keep their own site because they won't have to move machinery, look for a new site, sell their existing site or upset the workers by moving. Once expansion on the site is started then they can then focus on the other problems like own transport and whether job rotation is ideal. Once this is implemented then expansion of the site should be monitored against the objectives. If the course of action is not effective then it should be modified or search for alternatives. If JB Casting had chosen to look at whether job rotation was working then this would only be a satisfactory resolution and this wouldn't fit the REM of decision making. This is because REM chooses the best course of action rather than just resolving the problem to a certain extent and not doing the best thing available. JB Casting could only use the REM if there is agreement over the set objectives and how these can be achieved.Image theory looks at how decisions are made, rather than how they should be made. This is different to that of the REM. Four models are looked at. These are recognition models, narrative, incremental and moral/ethical.The descriptive decision theory is an extension of the REM but it looks at decisions made between individuals and groups instead of just looking at one decision-maker. The game theory looks at 2 issues. Fairness highlights the fact that decisions that people make can influence others. A decision-maker needs to make sure they are fair when making decisions. Co operation looks at how people working together can gain more then when doing it on their own.The methodology that supports the REM is OR. OR is a method that implements the REM. The OR society between 1966 and 1984 defined it as the distinctive approach that develops 'a scientific model of the system, incorporating factors such as chance and risk, with which to predict and compare the measurement of factors of alternative decisions, strategies and controls. The purpose is to help management determine its policy and actions scientifically'. Like the REM it is scientific and solves 'problems involving the interaction of components of the organisation in the best interest of the organisation as a whole' (pg. 134, P Keys, 'understanding the process of operational research'). OR is 'research performed by teams of scientists whose individual members have been drawn from different scientific and engineering disciplines' (pg. 137, P Keys, 'understanding the process of operational research'). JB Casting could use OR to help them decide on how their problems and decisions can be resolved and OR can 'develop new procedures which are more effective in approaching the problem than any that are available' (pg. 137, P Keys, 'understanding the process of operational research'). OR will provide a decision, which is best for the whole organisation (optimum decision). OR tries to come to a...

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