Snyder says that it is essential to go through the processes of the decision making, what factors are involved in this process, to analyse the decision, their impact upon the society. Borrowing from economists the political scientists have applied the rational actor model in political science for the purpose of making decision and it received forthwith admiration from many corners. 3. Non-Robust Models in Statistics by Lev B. Klebanov, Svetlozat T. Rachev and Frank J. Fabozzi, Nova Scientific Publishers, Inc. New York, 2009. Incrementalism also envisages, at limited scale, comparison of satisfactory results. (2) The objective of the policy is decided: The policy maker decides for what purpose the policy is going to be made. Every decision-making process produces a final choice, which may or may not prompt action. The good thing about this theory is that it deals with the cognitive process of behavior… • Akerlof, George A.; Yellen, Janet L. (May 1987). This chapter reviews theoretical literature on the economic theory of decision making and the rapidly increasing number of psychological experiments (performed by both psychologists and economists) that are relevant to it. The Marxists also formulate policy for radical changes of society. They do the job in deep consultation with others who are supposed to be associated with it. In his Models of Man he has analysed possible aspects of rationality. Making of decision is also highly complex because the persons associated with this task cannot do the job at a stroke. More briefly, what is the problem? But this argument does not stand the test of reality. The final stage of the decision-making process is the evaluation. Moreover, in this age of globalisation the nation-states have come closer to each other and the interdependence among them has surpassed all the past records. According to Simon, an organisation is a structure created for decision making. This may be called policy from the above. Decision making is synonymous with management. So both these sections are interconnected and impor­tant. Decisions are also affected by whether options are framed together or separately; this is known as the distinction bias. If we stop our activity, society or its advancement will come to a halt. Similarly, there are the problems of unemployment and terrorist activities which are particularly crucial in some parts of the globe. But in an autocratic regime such a situation cannot be thought. But this criticism is unfounded. It has been observed by Snyder that the decision-making process has been playing a very crucial part in the administration of any business organisation or governmental department. [1] Decision theory can be broken into two branches: normative decision theory, which analyzes the outcomes of decisions or determines the optimal decisions given constraints and assumptions, and descriptive decision theory, which analyzes how agents actually make the decisions they do. The state as state exists and it guides, but it is not the final voice on any national and international issue, organisational structure and bureaucracy are deciding factors. | Decision Making | Public Administration, Essay on Decision-Making: Top 7 Essays | Management | Public Administration, Communications Theory : Nature, Ideas and Criticism, Essay on Village Panchayats | India | Political Science, Essay on Communalism | India | Political Science, Directive Principles of State Policy | Essay | India | Political Science, Essay on Justice | India | Political Science. Some of the categories of decision have been identified by Wasby: (f) What were the characteristics of the decision situation? The theorem is limited to evaluating options that come with anobjective probability distribution over outcomes—a situationdecision theorists and economists often describe as “choiceund… Sometimes we see that few persons formulate a policy without taking into consideration of others’ views and finally it is imposed on others. The critics observe that what holds good for one discipline may not hold good for another discipline. 5. But bureaucratic organisational model offers us a scheme in which bureaucracy plays a leading role in policy-making process. For example, if a coin is flipped to tails for a couple of turns, it still has the same probability of doing so; however it seems more likely, intuitively, for it to roll heads soon. From the mid-fifties to the end of fifties Richard Snyder published a series of writings whose chief objective was to propagate the importance of decision-making approach. Here the anti-communist feeling worked. The Greeks consult the Oracle of Delphi. Herbert Simon divided the concept into two main parts—one is decision— being arrived at and process of action. play vital role. [16] If someone received a windfall of several thousand dollars, they could spend it on an expensive holiday, giving them immediate pleasure, or they could invest it in a pension scheme, giving them an income at some time in the future. Decision-making: Theory and practice 147 comfortable with it, after which it is implemented. Statistical decision theory focuses on the investigation of decision making when uncertainty can be reduced by information acquired through experimentation. Rational actor model, Incremental model, Bureau­cratic organisation model and Belief system model. Normative theories are concerned with 'how we should or ought to reason, make judgements and take decision' (Over, 2004). An abstract policy adopted with a lot of fanfare may not come to the benefit of the government department. 7. We have already noted that behind every decision there must be rationality of the decision maker and there is no place of idiosyncrasy. Economic theorists have been con- cerned with this problem since the days of Jeremy Bentham (1748- 1832). [5][6], The prescriptions or predictions about behavior that positive decision theory produces allow for further tests of the kind of decision-making that occurs in practice. At the heart of the Vroom-Yetton-Jago Decision Model is the fact that not all decisions are created equal. These two are the handiwork of anti- communist feeling and policy makers made it a part of their policy/decision. There is another drawback of this approach. 3. The basic idea of the rational actor model is derived from economic theory and utilitarianism. What are the consequences of evaluation? The policy makers or the authority after the implementation sits to ponder over the pros and cons of the policy. The decision-maker avoids radical change in any policy formulation his technique is incremental change or successive change. His movement comprises also very small steps. Policy-makers and politicians fall under this category because of the accountability. Duties must be assigned, deadlines must be set, evaluation process must be established and contingency plans must be … The recency of this development is surprising considering that gambling has existed for millennia, so humans have a long history of making judgments of probabilistic events. Therefore, in order to study the society or the management of department it is necessary to analyse all the aspects of policy-making. Decision theory, in statistics, a set of quantitative methods for reaching optimal decisions.A solvable decision problem must be capable of being tightly formulated in terms of initial conditions and choices or courses of action, with their consequences. What is Decision Theory Approach? Experts of public administration and governmental organisations are of opinion that though rationality is the predominant determiner of decision-making process very often irrationality or partiality enters into decision making process and it is believed that this is inevitable in a democratic set up. Advocates for the use of probability theory point to: The proponents of fuzzy logic, possibility theory, quantum cognition, Dempster–Shafer theory, and info-gap decision theory maintain that probability is only one of many alternatives and point to many examples where non-standard alternatives have been implemented with apparent success; notably, probabilistic decision theory is sensitive to assumptions about the probabilities of various events, while non-probabilistic rules such as minimax are robust, in that they do not make such assumptions. Policy is not prepared once for all, rather it is made step by step and the decision-maker proceeds stage by stage. Various proposals and alternatives are placed before the policy-makers and they are to select only the necessary ones. This creates a scope for a new model labelled as incrementalism. Number of factors play important role in the initiation of decisions. He wants to avoid or evade problem or uncertainty and for that reason he decides to follow a policy of incrementalism. This is rationality. This set out to examine how policy was initiated, formulated and implemented and how the policy process could be improved”. We know that the general systems theory of David Easton and the structural- functional approach of Gabriel Almond and other related theories are more or less static in nature which means that all these theories deal with those elements that are static. If rationality is not given due importance the decision-making process and the objective of public utility concerns will be adversely affected. While quicker than step-by-step processing, heuristic thinking is also more likely to involve fallacies or inaccuracies. As for example, in liberal democracies pressure groups, political parties and various non-governmental organisations partici­pate, though not in a formal way, in the decision-making activities. People always view decision from the standpoint of teleology. If it is abandoned a new policy is being imitated to replace the old one. As for instance, there is pollution of different types and their harmfulness is quite known to all. However, the central idea formulated and developed in the fifties continued to spread its wings and influence even in the seventies and early eighties. Intertemporal choice is concerned with the kind of choice where different actions lead to outcomes that are realised at different stages over time. All these elements enter into the domain of decision-making process. It has been claimed by many, specifically by Robert Dahl (Modern Political Analysis, Fifth edition) that decision-making processes constitute the pure science of politics. 9. While the decision makers make decision they consider all the (or most of the) situations. DECISION MAKING THEORY DEFINITION PROCESS 4. 3. About the stages in decision making, Simon identifies three criteria: (a) Intelligence: Searching for problems, and identifying and defining problems that demand action. It describes a way by which people make decisions when all of the outcomes carry a risk. The state must do some works for the welfare of the people, and that requires policy formulation. His decision-making theory can be ex­plained in the form of following points: 1. A policy is initiated, generally, in the background of problems or critical issues. Decision Theory Approach in management is an approach that helps the manager to take the right decision with the logical term.The Decision Theory of management founded by Herbart Simon to looks management process as a decision making process.At the time of making this approach, the manager will identify the uncertainties that will affect the business. If the belief or attachment to ideology is pervasive, or firm the decision-maker may temporarily give priority to ideology or belief. The phrase "decision theory" itself was used in 1950 by E. L. One is decision-making plays so important a role in any business organisation and governmental department that it cannot be neglected at all. If so the decision-maker must see that the structures and organisations are doing their duties and he must consider what changes are required (if changes are at all necessary) to bring about improvement upon the organisational and functional aspects of political and other institutions. So decision-making is a very important part of an organisation. The decision-making can be divided into several stages. Situation and circumstances change very frequently and the policy maker must amend policy other-wise it will not be able to serve the purpose. Similarly, many liberal thinkers expressed their anti-state views in unequivocal terms. She formulated a number of policies whose core elements constitute deregulation and privatization combined with authoritarian social policy. The bureaucrats and related agencies have their own outlook, values and assessment about incidents and when policy making process starts the top government officers and allied agencies release their efforts to guide the formulation of policies in the light they cherish. During the Cold War period and even in subsequent years Snyder’s decision-making approach was profusely used to explain the international events and the gestures of the big and superpowers. Critics have raised objection about the too much emphasis on rationality. Following is the remark of a well-known author: “Indeed during the 1960s and 1970s a distinctive area of study, policy analysis was developed. Policy making is a process of successive approximation to some desired objectives”. [19] One example of a common and erroneous thought process that arises through heuristic thinking is the Gambler's Fallacy — believing that an isolated random event is affected by previous isolated random events. Because of this drawback the decision-makers are not interested in making one time policy. -We can ask what is the exact approach to the study of decision-making approach? We shall now deal with a very important and interesting aspect of decision-making and it is various stages of decision-making. Since these constituted the bases of decision-making process the decision itself failed to be imperfect and defective. create pressure on the authority to take a decision in order to give relief to the people or to meet their demands. 8. The Cuban Missile Crisis is also the consequence of the same belief. The theories surveyed assume rational behavior: individuals have transitive preferences ("… if A is preferred to B, and B is pre… The policy makers of a communist country will not formulate such a policy as will violate basic principles of communism although rationality demands the violation. The revival of subjective probability theory, from the work of Frank Ramsey, Bruno de Finetti, Leonard Savage and others, extended the scope of expected utility theory to situations where subjective probabilities can be used. Some decisions are extremely important and will require input from many people, while other decisions can be made quickly as they won’t have long-lasting effects on the company as a whole. Hansson, Sven Ove. But in practice this situation hardly prevails. Decision-making theories – the basics Different approaches to decision-making are sometimes called Choice theories. When this happens the decision-making process and the decision itself both are bound to be imperfect. They will not formulate such policies as well face problems in the period of implementation. And at what cost? If the formulators could not predict these problems implementation will face not only troubles, the very objective will remain unrealized. It is believed that the large political and other organisations have their own values, ideas and long cherished and well guarded inclinations. The amalgamation of all these methods or streams of analysis has become inevitable because of the fact that decision-making, nowadays, is increasingly being considered very important part of the management of government business. The first is internal setting of the society: Internal setting includes many elements some of which are: The nature and functioning of the social organisation such as political parties, pressure groups, non-governmental organisations, public opinion, agencies helping the formation of public opinion, nature of the political system etc. Nasser wanted fund from USA and Britain for the construction of Aswan Dam on the river Nile. There is a decision­-making approach in business organisation. If circumstances demand any change or reconsideration of policy, the decision maker takes steps in that direction. Now, the question is what is meant by pure science of politics? Wald's paper renewed and synthesized many concepts of statistical theory, including loss functions, risk functions, admissible decision rules, antecedent distributions, Bayesian procedures, and minimax procedures. Naturally the content and type of decision in both regimes need not be identical. A highly controversial issue is whether one can replace the use of probability in decision theory by other alternatives. J. M. Keynes, observations influenced the British government to adopt anti-unemployment mea­sures. When the policy maker proceeds to decide a policy it is his duty to bring all these factors into his active consideration. Moreover, there are different structures of a political system and these structures have their allotted functions. The psychological factor is also involved in the formulation of a policy. For examples, it means the decision maker very carefully proceeds while he decides to take an action or announce a policy. There is another aspect of implementation. 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