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. …
