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Normative Model.

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MODELS OF DECISION MAKING

Decision making consist of three Concepts:


 Choosing : You go to shop to buy clothes .You observe
and examine various clothes and then choose the best 2-3
alternatives.
 Deciding : Making up your mind about choices but you
have to taken into account various factors before
finalizing your choice.
 Doing: Picking up the best alternative. Doing may be
defines as an operation or action by an agent.
Choosing, Deciding and Doing
Doing
Choosing Deciding
Carrying out
Options Decision making
decision

Intellect Will, Deliberation Action

No moral
Moral judgment
consequences of Operationalization
undetermined by
choices being of decision
any of the choices
right /wrong
Classification of Decision Making
 Decision Making can be classified into two theories or
models:
 1. Normative Model
 2. Descriptive Model
Normative theory
 It is based on the basic assumptions which are known as
Axioms.
 Axioms: a universally accepted principle or rule. “Axioms”
were present since back even to origin of mankind and human
race has adapted its working as per “Axioms”.
 Example of Axioms: Here is an axiom of addition and
multiplication.
Let x and y be real numbers.
Then x + y is also a real number and xy is also a real number.
 Axiom is a rule or a statement that is accepted as true without
proof.
Contd..
 Normative theory deals with ethical human behavior.
 Normative theory is qualitative in nature because the nature
of norms is transcendental.
 Normative Principles are:

1. Utility or Greatest Happiness Principle


2. Right/Duty
3. Means and Ends
4. Justice
5. Conscience
6. Prudence
7. Stewardship
Utility or Greatest Happiness Principle
 Utilitarianism:  is a theory in normative ethics holding that
the moral action is the one that maximizes utility. Utility is
defined in various ways, including as pleasure, economic
well-being and the lack of suffering.
  Such a theory is in opposition to egoism, the view that a
person should pursue his own self-interest, even at the
expense of others.
 Utilitarianism also differs from ethical theories that make
the rightness or wrongness of an act dependent upon the
motive of the agent, for, according to the utilitarian, it is
possible for the right thing to be done from a bad motive.
Right/Duty

 This principle ensures liberty, equality and justice in society.


 The ethics of duty is known as Deontology.
 Deontological ethics or deontology (from Greek deon,
"obligation, duty") is the normative ethical position that
judges the morality of an action based on the action's
adherence to a rule or rules.
 It is sometimes described as "duty-" or "obligation-" or
"rule-" based ethics, because rules "bind you to your duty.“
  Deontological ethics is commonly contrasted to
consequentialism , virtue ethics, and pragmatic ethics.
Virtue Ethics
 It is a form of positive ethics that is often seen in the
negative form as blind, impartial and devoid of any
feeling.
 It is person rather than action based: it looks at
the virtue or moral character of the person carrying out an
action, rather than at ethical duties and rules, or the
consequences of particular actions.
 EG: War.
Deontological
 Deontological (duty-based) ethics are concerned with
what people do, not with the consequences of their
actions.
 Do the right thing.
 Do it because it's the right thing to do.
 Don't do wrong things.
 Avoid them because they are wrong.
 Under this form of ethics you can't justify an action by
showing that it produced good consequences, which is
why it's sometimes called 'non-Consequentialist'.
Means and ends
 The means of our actions should justify our ends.
 Wanting to have money is not unworthy, but if acquired
by stealing then it is unworthy and despicable.

 JUSTICE
 Distributive justice: how justly wealth is shared.
 Retributive justice: deals with assignment of merited
rewards or punishment.
 Compensatory Justice: to make up for the loss suffered.
Eg: War Victims.
Conscience
 It consists of a purely subjective opinion about what is
right or wrong.
 Leaders such as Martin Luther king Jr. and Nelson
Mandela have been the voice of conscience that moved
the world and changed it for the better.
Prudence
 Prudence is the management of affairs with common
sense.
 4 Ways:

1. First, it is an ability to discipline yourself and govern


one’s own affairs in the most reasonable way.
2. Second, it is the competence and wisdom to manage a
task.
3. Third, it is the skill and judgment of using resources.
4. Fourth, it is the caution exercised and risk foreseen
before arriving at and implementing any decision.
Stewardship
 It is the role of a manager, beyond the call of employed
duty, to take a keen interest and social responsibilities in
the fulfillment of tasks.
 Stewardship nurtures the judicious use of limited
resources and develops a sensitive social concern.
Corporations have adopted this principle under corporate
responsibility (CSR).
Classification of decision making theories.
Individual Decision Group Decision

Normative 1. Classical Economics.(A Theory 1.Game.(Saddle Point, “Win-Win


Theory common for Masses) Situation”
2. Statistical.(Representation of the 2.Welfare Economics.(Prosperity
Masses) Line)
3. Moral. (Depends on person to person) 3. Political (Directly Affects
Ethical Business Decision)
Example:- Haveli

Descriptive 1.Experimental.(On basis of Feedbacks, 1. Social Psychology (Reading


Theory Observations and Testing) the Mind of Masses) (Pepsi
2.Learning. (A Complete Cognitive Process. V/s Lemon Water in 1991,
From Childhood to Death) with LPG)
3.Surveys of voting Behavior (Measuring 2. Political Science (Political
Likeness) Effect in Decision Making)
Descriptive Model
 Descriptive theories are empirical and proceed from
hypothesis.
 Descriptive theories about learning and research are based
on experiments, surveys and opinion polls, and social and
political researches.
 So it is an Quantitative study.
Stages
 General Background: Society represents only one Ethics.
Professional Ethics is a part and parcel of society, of
which business ethics is also a part.
 Specific Background: the areas such as organizational,
industrial and professional environment where appropriate
codes have been derived from general sphere and applied
to specific spheres.
 Stage One: the problem is perceived, the alternatives are
weighed and consequences are predicted.
Stage Two
 If the decision is made from the point of view of
duty( deontological) then the task is easy- just follow the
code, do your duty and decision will fall into place as
good as the code.
 But if the decision is motivated by the
objectives( teleological), then the consequences would be
different and will be related to emotional aspect.
Stage Three
 The appraisal or the evaluation of decision making is two-
fold. If one follows principle of duty (deontological), the
evaluation is a logical conclusion.
 If one follows teleological principle, evaluation becomes
difficult as the reference to various consequences could
pose problems.
 Dilemma arises, conflict situations occur and it becomes
difficult to apply ethical standards without compromise.
Stage Four

 Ethical or Moral Judgment in case of deontological


application is logical.

 STAGE FIVE
 Intention is the central point.
 Intention will make the decision good or bad.
Stage Six
 3 important aspects:
 Action, Control and Behavior.
 Once the mind is made up, the intention is clear, you
decide upon your further action and based on your action
your behavior will be determine.

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