1. (a) Did Rohrtech’s Board use the rational decision-making paradigm at the end of the case when it decided to replace Devine with O’Grady as COO? Support your answer with facts from the case and a thorough knowledge of the rational decision-making paradigm.
The textbook states that the “rational choice paradigm selects the choice with the highest utility through the calculation of subjective expected utility” (McShane, S., Steen, S. & Tasa, K. (2015) In other words it is the probability of utility every time there is an alternative. First, the problem must be identified before choosing the right method to execute the problem. From that point, you develop and evaluate solutions choosing the right way to solve the problem. The decision of replacing Kurt Devine’s position as a chief operating officer (COO) in with Tom O’Grady; they did not really involve in being a part of the rational decision-making process. There is no rational decision to why Rohretech’s Board of Directors made a choice of taking Kevin Devine’s out of his spot. In the beginning Trivac Industries was on the verge of running out of business so they tried to be as independent. “When investments fail to meet initial expectations, decision makers face a liquidation dilemma: they may favor continuing to finance the project to retain the option of improvement or they may decide to terminate” (Devigne, D., Manigart, S (2016). They told Kurt Devine that he needed to have better incorporation with Trivac and
Kris is a 19-year-old high school graduate who is seeking counseling to assist her in choosing a major for college. She graduated in the top 10% of her class and seems to identify well with other females in her age group. Kris grew up in a very traditional family where gender roles are very structured and evident inside and outside the household. Kris relies heavily on approval from her brothers and struggles to make decisions of her own.
Top-level executives and key managers are at the helm of the decision-making process with the focal point being selecting the best choice. Selecting the best choices or alternative of choices derive from assessments, interviews, surveys and audits that evaluates the strategic position of the selected choices. Consequently, the chief executive officer at some point should show how the middle-managers, front-line managers, employees and client fit into the decision-making process.
Case Study of case 69 A.D.3d 413: Yun Tung Chow vs. Reckitt & Colman, Inc.
Rational decision is a state of being agreeable to reasons. The correct decision is not just reasoned but it is also optimal for solving a problem. Mr Weekes, the operation manager, employed series of analytical steps to review possible outcomes for problems by discussing it with managers to come up withdevise particular courses of action.
Kathryn Petersen, the new Chief Executive Officer of DecisionTech, was not a normal CEO of a technology firm. Kathryn a fifty-seven-year-old who had a military and automotive industry background yet she had an extensive history of turning executive teams that were not functioning as a team to one cohesive unit.
The case can also use the Carnegie Model and the incremental model to creating alternatives for the decision problem, the incremental model of decisions describes a sequence of structured activities. These activities begin with the discovery of a problem to its solution. The Carnegie model is based on the president’s skill in terms of decision-making. The model gives the president a chance to make the final decision based on the deliberations and suggestions made by the board.From exhibit 12.9 that included the contingency framework quadrant, the individual approach would provide the best way to place the decision. The board is faced with a decision of
The concept of ‘rationality’ has been talked through the centuries. According to Grey (2013), rationality is a big question because of this proposition which has the meaning and difficulties seem to be defining of a whole set of issues which have resonated through both organisation theory and practice ever since. And rationality is the basis of a decision, rational decision makers are objective and logical, they reach the goal that maximises the value. Not only rationality is important to organisations, and also it can be identified in various kinds of management theories. This essay will introduce the different aspects of the concept of ‘rationality’ and make explanations that how these are recognised in different management theories.
The difficulties that were accompanied with this approach led to deviation from the rational model. Complexity of modern organizations and the limited cognitive ability of decision makers were most influencing factors in the deviation . The decision makers were unable to operate under perfect rationality conditions. The information about a decision was mostly unavailable or unclear, and open to different interpretations. Also, the criteria of evaluating alternative solutions were not agreed upon. It also required very long time and a lot of energy of the decision makers to pursue a maximizing outcome. These constrains led to a conclusion that the absolute rational model is unreachable.
A study published in the winter 1997 volume of Business Strategy Review suggests the major factor in a decisions success is the decision process itself. The study, by Paul Nutt, suggests that poor decision making
Applying the utility theory seems a rational choice as it can reflect the decision maker’s attitude toward risk. Still problems arise when the decision is made by more than one person. Based on their experiences within General Motors, Michael W. Kusnic and Daniel Owen have found that when there were more than one decision makers, it was less
Elaine Shumate has worked for more than the past seven years for GSM, a pharmaceutical research company. She has been receiving increased responsibility, but her knowledge and experience has not prepared her for the information requested by Blake Walton, the vice president of research. Mr. Walton has a meeting scheduled with the board of director’s to ask for additional investment funds based on Elaine’s projection of a patent the company intends to sell to large pharmaceutical companies for use in medication production. Her latest research results do not look as good as previously thought. Mr. Walton requested she revisit the
Parker’s budgeting decision is a good example of an individual acting with bounded rationality. This term was introduced by Simon in 1957 (as cited in Tolbert & Hall, 2008) to argue that normative models of decision making, which assume fully rational and objective judgement (Teale, Dispenza, Flynn & Currie, 2003), are unrealistic because human rationality is limited. Parker’s judgement may have seemed rational to him, but it was not rational for the organisation, a subtle distinction about rationality made by Storing (as cited in Tolbert & Hall, 2008). Parker’s judgement was also not rational in that he did not have all available knowledge and awareness of risk, which are the conditions of normative models (Teale et al, 2003) and the “official theory” of management (Anthony, as cited in Teale et al, 2003, p. 14). For example, Parker did not know about the variations in the terrain when he made his decision, and he also assumed that the assistant workers could work at the same physical rate that he could. Both of these limitations were factors resulting in a risk to on-time task completion.
Rational choice theory is actually more than one theory per se, but the basic similarities among its variants mean that they can be intelligibly amalgamated for the purposes of critiquing its implementation in political science. Therefore public choice theory, positive political science, rational actor models, and the economic approach to politics, among others, refer to what we may call rational choice theory for the purposes of this essay. (See Green and Shapiro 1994, xi.
Neil Hastie’s belief that most organizations decision making is a lot of trial by error. In a sense that could be true, but good decision making comes from the top and makes it way down. Let’s not lose sight on what decision making really is; finding a logical choice of decisions from available options. A CEO or even management of any kind of organization would have to be good at decision making. If you were to turn Neil’s statement about decision making into a positive one, then one would agree that an organization or whoever is running the organization would need to keep an open-mind. Keeping an open-mind would include training, presenting timely information and everyone’s wide assortment of data-mining tools. (Haag & Cummings, 2009).
4. How does this case illustrate how strategic intent needs to be matched by both organizational capability and managerial competence; and show how such