Decision making in international business
3 important questions on Decision making in international business
What should the managers do? (The normative model, describe the 6 steps/ the general process)
- Recognise that a problem exist
- Identify alternative solutions
- Evaluate each alternative rationally
- Select the best alternative
- Implement the chosen alternative
- Follow up and evaluate the selected course of action
In the normative model it is important that managers see the problem and find alternative solutions for the problem. Every alternative is evaluated and the best one is chosen so that in the end they end up with a decision that best serves the organisation's interests.
How is problem recognition in different cultures different?
Individual: Problems are defined in terms of individual scenarios and consequences.
Collectivistic: Focus is on group-related issues and situations.
Collectivistic: Focus is on group-related issues and situations.
What do managers do in the descriptive model? (3 steps)
- Use incomplete and imperfect information
- Are constrained by imperfect information
- Tend to adopt the first minimally acceptable alternative
In the descriptive model managers do not find the best alternative. They base their decisions on incomplete information and end up with a decision that may or may not serve the best interests of the organisation.
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