Explore the relationship between the various ways that decision making in organisations may be described and explained and the methodologies to support decision making.

Essay by debbieclarke100University, Bachelor'sC+, November 2002

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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 the relationship between the theories and the methodologies.

The REM assumes that decisions are made rationally by decision-makers in organisations. Clegg et al argues that 'individuals act as maximisers of utility or a similar measure of benefit'. The decisions made by managers are logical and the REM allows the best decision to be made.

Dawson defines the steps that need to be taken when following the REM of decision making. To illustrate this model JB Casting case study can be used. Dawson argues that the problem needs to be defined. A problem that JB Casting has is whether to expand or not. Next the objectives need to be identified. For JB Casting these are; they want expansion if they are going to keep the business successful and attract new customers. This means increasing output and widening the use of metals used. Thirdly they need to search for possible alternative courses of action that they could take. They could move their site or stay where they are, improve their equipment, job rotation, introduce a drawing room, employ more staff and get their own transport. Dawson argues that the fourth step is to...