Classical Decision Making Model

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  • 0:04 Assumptions Behind the Model
  • 1:23 Steps in the Classical Model
  • 2:13 Drawbacks of the…
  • 3:21 Lesson Summary
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Lesson Transcript
Instructor: Olga Bugajenko

Olga is a registered PRINCE2 Practitioner and has a master's degree in project management.

Imagine living in a perfect world, where all information is readily available to you. Wouldn't making decisions in such a world become as easy as pie? The classic model of decision-making gives you a taste of how it would be.

Assumptions Behind the Model

How would you describe ideal conditions for making a decision? You might mention unlimited access to information, fully eliminated uncertainty, and/or perhaps even the ability to predict the future. The classical model of decision-making fits this description quite closely. It is a rational model of decision-making that assumes that managers have access to complete information and are able to make an optimal decision by weighting every alternative. The model then recommends a list of actions for managers to follow to arrive at the decision that's best for their organizations.

There are four main assumptions behind the classical model:

  • First is a clearly defined problem. The model assumes that the decision-maker has clearly set goals and knows what is expected from him.

  • Next is a certain environment. The model further suggests that it is in the power of the decision-maker to eliminate any uncertainty that might impact the decision. As a result, there are no risks to account for.

  • The third assumption is full information. The decision-maker is able to identify all alternatives available to him and to evaluate and rank them objectively.

  • The final assumption is rational decisions. The decision-maker is believed to always be acting in the best interests of the organization.

Steps in the Classical Model

The classical model proposes three main steps for decision-making:

  1. First is listing all available alternatives. Under the classical model, the decision-maker is not limited by time or resources and can continue looking for alternatives until he identifies the one that maximizes the utility from the decision.

  2. The second step is ranking listed alternatives. The decision-maker is believed to possess not only all required information but also the cognitive ability to prioritize the alternatives accurately and objectively.

  3. The last step of the classical model is selecting the best-suited alternative. Because it's possible to rank alternatives objectively, it also becomes possible to identify the single best solution of the problem. This is the solution that maximizes the utility of the organization.

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