This document discusses three decision-making models: the classical model, administrative model, and political model. It also describes four decision styles: directive style, analytical style, conceptual style, and behavioral style. The classical model involves clear goals, certainty, and rational choice. The administrative model has vague goals, uncertainty, and satisficing choices. The political model has pluralistic goals, ambiguity, and bargaining. The four decision styles differ in how problems are perceived and solutions chosen. The directive style prefers quick, simple solutions. The analytical style carefully considers alternatives based on data. The conceptual style considers many broad alternatives and social information. The behavioral style focuses on understanding others and helping them achieve goals.

2. Prepared by :
Dr. K. BARANIDHARAN
PROF.MBA
SRI SAIRAM INSTITUTE OF TECHNOLOGY
CHENNAI
ENGINEERING ECONOMICS
AND
FINANCIAL ACCOUNTING
Sri Sairam Institute of Technology 2

3. Engineering Economics&
Financial Accounting
Ee&fa
317 August 2014

4. Decision making model

5. 5
Three Decision-Making Models
 Classical Model
 Administrative Model
 Political Model

6. 6
Characteristics of Classical, Political, and
Administrative Decision Making Models
Classical Model Administrative Model Political Model
Clear-cut problem and goals Vague problem and goals Pluralistic; conflicting goals
Condition of certainty Condition of uncertainty Condition of uncertainty/ambiguity
Full information about Limited information about Inconsistent viewpoints; ambiguous
alternatives and their outcomes Alternatives and their outcomes information
Rational choice by individual Satisficing choice for resolving Bargaining and discussion among
for maximizing outcomes problem using intuition coalition members

7. 7
Decision Styles
• Differences among people with respect to how
they perceive problems and make decisions
• Not all managers make decisions the same
–Directive style
–Analytical style
–Conceptual style
–Behavioral style

8. 8
Directive Style
• People who prefer simple, clear-cut
solutions to problems
• Make decisions quickly
• May consider only one or two
alternatives
• Efficient and rational
• Prefer rules or procedures

9. 9
Analytical Style
• Complex solutions based on as
much data as they can gather
• Carefully consider alternatives
• Base decision on objective,
rational data from management
control systems and other sources
• Search for best possible decision
based on information available

10. 10
Conceptual Style
• Consider a broad amount of information
• More socially oriented than analytical style
• Like to talk to others about the problem
and possible solutions
• Consider many broad alternatives
• Relay on information from people and
systems
• Solve problems creatively

11. 11
Behavioral Style
• Have a deep concern for others as individuals
• Like to talk to people one-on-one
• Understand their feelings about the problem
and the effect of a given decision upon them
• Concerned with the personal development of
others
• May make decisions to help others achieve their
goals

12. 12
New Decision
Approaches for
Turbulent
Times
New Decision Approaches
for Turbulent Times