Principles of Management

Principles of Management

 Assumptions of classical model of decision-making

The classical decision making model is a dogmatic tool that delineates how the administration ought to formulate decisions. It is founded on several economic assumptions. The first assumption is that executives are rational; therefore, they make decisions based on their rationality (Griffin, 2008). The goals in a firm are acknowledged, this means the management already knows them before hand. There is no form of ambiguity. All the options to a problem are well thought-out. The consequences of all the decisions made are well known. There is availability of perfect information to all the decision makers (Lunenburg & Ornstein, 2008). The managers and executives in charge of making decisions are maximizes, they only choose the best option.

How this model would help to explain the behavior of a manager who was attempting to act consistently with this model in a realistic business situation

             For a business in the fast food industry such as McDonalds, their goal is profit maximization and consumer satisfaction. The managers know that they have to gain this by offering first-class services and selling the food at good rates. Knowledge of objectives such as being the market leader and giving back to the society is obvious to all the executives and employees. They also know that they face competition from the external environment .The major assumption of the classical model of decision-making is predetermined goals (Daft & Marcic, 2009). Once the managers of McDonald’s know their goals, it is easy to set strategies and make decisions geared towards those goals. The management has perfect information about their company and the fast food industry. Therefore, when one of their chains has problems the management is clear on the types of solutions to employ. Consequences of their decisions are already taken in to consideration. Any outcome will not come as a surprise. The choices are clear so they pick the decision that favors both the company and the consumers (Griffin, 2008). This is because the model assumes that the executives are maximizes and rational individuals.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References:

Daft, R. L., & Marcic, D. (2009). Understanding management. Mason, OH: South-Western Cengage Learning.

Griffin, R. W. (2008). Fundamentals of management. Boston, MA: Houghton Mifflin.

Lunenburg, F. C., & Ornstein, A. C. (2008). Educational administration: Concepts and practices. Belmont, CA: Wadsworth.