MILA MUJAADILAH

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RESUME CHAPTER 1
The Premises of Rational Management
WhyDecissionAnalysis?

The decision making process in business management can be

described as choosing among alternatives. The main steps are:
problem definition, identification of decision criteria,
allocation of weights to criteria, development and analysis of
alternatives,andselectionandimplementationofalternatives
TheRoleofDecissionAnalysis

Analysis:divideandconquer
Defensiblerationale:audittrail
Raisedconsciousnessaboutissues
Allowsparticipation:commitment
Insights:creativethinking
Guidanceoninformationneeds

Conflictbetweenanalysisandintuition
Perhaps:
AnalysisfailedtocapturesomeaspectofproblemorIntuitive
preferenceswereonlypartlyformedorwereinconsistent.
Exploring this conflict can lead to deeper insights and
understandingaboutthedecisionproblem.
THEPREMISESOFRATIONALMANAGEMENT
ThebasicassumptionisrationalityIfthedecisionmakeris
preparedtoacceptasetofaxiomsthenthedecisionindicatedby
theanalysisshouldbepreferred.
The search for organizational Effectiveness, the room for
improvement:
BuildingtheTeam
BuildingaManagementTeam
Conditionforworkablechange
FOURBASICPATTERNOFTHINKING

Pattern1AssessingandClarifying
For our earliest ancestors, the most important of the four
basic patterns of thinking was the one that enabled them to
assess, clarify, sort out, and impose order on a confusing
situation.
Pattern2Cause&Effect
Thesecondbasicpatternofthinkingtheonethatpermitsus
torelateaneventtoitsoutcome,acausetoitseffectgave

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earlymantheabilitytoassignmeaningtowhatheobserved.The
thinkingpatternweusetorelatecauseandeffectisasbasic
andnaturalasthepatternweusetoassessandclarifycomplex
situations.Bothenableustosurvive,flourish,andmaintaina
truemeasureofcontroloverourenvironment.
Pattern3MakingChoices
The third basic pattern of thinking enables us to make
reasonedchoices.Thedevelopmentofsophisticationinthemaking
of choices, along with goal setting and consideration of the
consequences of one action as opposed to another, meant that
humanscouldsometimeseattigersinsteadofviceversa.
Thechoicemakingpatterngivesrisetothreemajoractivities:
Determination of purpose (to what end the choice is being
made).
Considerationofavailableoptions(howbesttofulfillthe
purpose).
Assessmentoftherelativerisksofavdableoptions(which
actionislikelytobesafestormostproductive).
Pattern4AnticipatingTheFuture
Thefourthbasicpatternofthinkingenablesustolookinto
thefuturetoseethegoodandbaditmayhold.
BasicPatternsofThinkingintheOrganizationalContext
SituationAppraisal
Therationalprocessbasedonthefirstthinkingpatternis
called Situation Appraisal. It deals with the question "What's
goingon?"andwithassessingandclarifyingsituations,sorting
things out, breaking down complex situations into manageable
components, and maintaining control of events. Situation
Appraisal is designed to identify problems to be solved,
decisions to be made, and future events to be analyzed and
planned.
ProblemAnalysis
The second rational process, called Problem Analysis, is
basedonthecauseandeffectthinkingpattern.Itenablesusto
accurately identify, describe, analyze, and resolve a situation
inwhich somethinghasgonewrongwithoutexplanation. Itgives
us a methodical means to extract essential information from a
troublesome situation and set aside irrelevant, confusing
information.
DecisionAnalysis
The third rational process, based on the choicemaking
pattern of thinking, is called Decision Analysis. Using this
process,wecanstandbackfromadecisionsituationandevaluate
itsthreecomponents.Wecananalyzethereasonsformakingthe
decision and examine its purpose. We can analyze the available

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optionsforachievingthatpurpose.Wecananalyzetherelative
risks of each alternative. From this balanced picture of the
situation,wecanthenmakethewisestandsafestchoicetheone
thathasemergedaftercarefulconsiderationofallthefactors.

PotentialProblemAnalysis
The fourth rational process is based on our concern with
futureeventswithwhat might beandwhat could happen.Wecall
itPotentialProblemAnalysis.Apotentialproblemexistswhenwe
canforeseepossibletroubleinagivensituation.Nooneknows
forsurethattroublewilldevelop,butnoonecanguaranteethat
itwillnot.Thisprocessuseswhatweknoworcansafelyassume
inordertoavoidpossiblenegativeconsequencesinthefuture.
Itisbasedontheideathatthinkingandactingbeforehandto
preventaproblemismoreefficientthansolvingaproblemthat
has been allowed to develop. This rational process enables an
organizationtotakeanactivehandinshapingitsfuture.
TheRise,Fall,andRiseAgainofTeamwork
Agroupmaybecomeateamofsortssimplybyworkingtogether
on a particular task for a long enough time. They may come to
understandeachother'srolesinacommontask.Theymaycometo
appreciateeachother'swaysofthinkingandlearntoaccommodate
to individual idiosyncrasies in the way information is used.
Althoughaworkablesetofeffectiveandappropriatecompromises
may emerge from this context, this group is not yet the full
scale, multipurpose team that can truly share in the thinking
process.
HuntingandGathering:ModelsofSuperiorTeamwork
Huntingandfoodgatheringgroupsweresmallprobablyfifteen
to forty people of all ages. The young learned from the old
through intimate contact and close observation. Old and young
pooled their intellectual resources by talking about what they
saw.Inthiswaytheyacquiredcommonlyunderstoodmeaningsfor
theirwords.Theirlanguagebecameexpressiveofdetail,offine
distinctions of form, color, texture, and of thoughts and
feelings. They developed few abstract terms. The languages of
hunting and gathering groups that survive today retain these
characteristics, suggesting how life's business probably was
conductedbyearlyman.
Withacommonexperienceoftheirenvironmentandacommonset
oftermstodescribeit,themembersofahuntingteamfunctioned
more as a single coordinated body than any comparable modern
group.Theleaderwasthemostproficientandskillfulbutthere
was no need for him to give orders and directions. Everyone
understoodwhatwastobedone,whocoulddoitbest,andhowto
mesh individual efforts into a concerted whole. Entire

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vocabularieswerecommittedtosignlanguagetopreservesilence.
Hundreds of words could be expressed by formalized gestures
instantlyandcommonlyunderstood.
ApplyingtheModel:NeedsoftheModernOrganization
We need the kinds of accurate communication common
understandingthatprevailedinthehuntingbands.Thesemustbe
modernized, selectively adapted to current conditions, and
directedtowardthecriticalfunctionsoforganizationalactivity
whereteamworkismostessential.

RationalManagement
Rational management, which means making full use of the
thinking ability of the people in an organization, is a
continuing process. Use of the ideasand their benefitswill
eventually fade out if they are not continually used and
reinforced.Inshortitisimperativetopinpointallthepeople
withinanorganizationwhomakethingshappen. Theobjectiveis
tomovetheorganizationclosertoitsfullpotential.Thiscan
be done only by introducing teamwork based on the continuing
conscioususeofcommonapproachesexpressedinasimple,common
language and directed toward resolution of an organization's
importantconcerns.