Decision Making Model

Classical Modal of Decision-making : The classical decision model a prescriptive approach that guides management how it should make decision. It rests on the assumption that managers are logical and rational that they make decisions that are in the best interest of the organization.  The classical model views the decision-making process : (i) Decision makers have complete information the decision situation and possible alternatives, (ii) they can effectively eliminate uncertainty to achieve a decision condition of . (iii) they evaluate all aspects of the decision situation logically rationally. However. these conditions rarely, if ever, actually exist.

·    Administrative Model of Decision-making : Herbert A. Simon was `c of the first few scholars to recognize that decisions are not always with rationality and logic. Simon. a winner of Nobel Prize in economics, instead of prescribing how decisions should be made, describes how decisions often actually arc made. As illustrated in figure the Administrative model holds that managers : (i) have incomplete imperfect information, (ii) are constrained by bounded rationality, Id (iii) tend to satisfies when making decisions.

As a matter of fact, the classical and administrative models paint quite, different pictures of decision making. The classical model is prescriptive it explains how managers can at least attempt to be more rational , logical in their approach to decisions. The administrative model can used by managers to develop a better understanding of their inherent bases and limitation.