Script

Slide 1
The classical decision-making model is also called the rational model, which is
an approach that combines logic and rationality to develop a final solution or
response. It is based on the premise that people are rational beings who carefully
consider all available options before making decisions.
Classical decision theory assumes that decisions should be completely rational and
optimal; thus, the theory employs an optimizing strategy that seeks the best possible
alternative to maximize the achievement of goals
Slide 2
The classical decision-making model is based on four main assumptions:

 Full information: Before making decisions, a team takes time to gather

enough relevant information. The full information is a guarantee for this
model due to all available funds required and no time constraints involved.
Therefore, it assumes that any required alternatives for decision-making are
available.
 Certain environment: The model avoids all risks by authorizing the decision
makers to remove all uncertainties during the process. Therefore, this means
that the decisions made have not accounted for risks.
 Clearly defined problem: Making rational decisions requires clarity of the
problem because one cannot solve a problem they do not understand.
Therefore, it assumes that the parties involved have clear objectives. It also
assumes that the objectives and goals are unambiguous.
 Rational decisions: It assumes that the decision makers are objective and
logical throughout the process, ensuring that all the decisions benefit the
company.

All decision-making models have assumptions involved that account for their unique
use. However, in the classical decision-making model, there is no guaranteed reward
for the decisions made.
Slide 3
The rational model specifies the essential steps in implementing it.
Step 1. Identify and diagnose a problem…Recognize a Need for a Decision
• Sparked by an event such as environment changes.
• Managers must first realize that a decision must be made.

After management has identified and defined the problem, the steps for
implementation include:
Step 2. Establish goals and objectives
Based on the identified problem, why is there a need to be addressed? (Elaborate)
State the purpose!
Step 3. Develop a list of alternatives
• There is always more than one solution to a problem. To find the best
solution, it is essential that an organization has multiple alternatives available.
The decision-makers can also explain why each solution is relevant by giving
facts.
• Managers must develop feasible alternative courses of action
– If good alternatives are missed, the resulting decision is poor
– It is hard to develop creative alternatives, so managers need to look
for new ideas
Step 4. Rank alternatives/ Evaluate Alternatives
After searching and generating all the needed facts for the alternatives, an
organization can rank/evaluate them. The available evidence gives the decision
maker enough details to rank them.
• What are the advantages and disadvantages of each alternative?
• Managers should specify criteria, then evaluate.
• The consequences of each alternative are evaluated in terms of goals.
General Criteria for Evaluating Possible Courses of Action

Step 5. Choose the best-suited alternative

Select the best alternative. However, is also important to reevaluate all the
alternatives until the decision makers are certain about a particular choice.
Step 6. Implement and evaluate the chosen alternative
• Managers must now carry out the alternative
• Often a decision is made and not implemented
• Compare what happened to what was expected to happen
• Explore why any expectations for the decision were not met
• Derive guidelines that will help in future decision making
When organizations implement decisions made from the rational model, it is vital
to monitor the results for some time. If the results are unsatisfactory, the
organization can repeat the process until it finds a viable solution.
Note: The classical model is an ideal (a normative model), rather than a description
of how administrators really make decisions. Most scholars consider the classical
model an unrealistic ideal. Why?

• Decision makers virtually never have access to all the relevant information.
• Generating all the possible alternatives and their consequences is impossible.
• The classic model assumes information-processing capacities, rationality, and
knowledge that decision makers simply do not possess.

Although it may be an ideal, the classic model is not very useful to practicing
administrators.