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Financial Analytics: Science and Experience
 

Analysis of the collective management decision-making model

Vol. 7, Iss. 45, DECEMBER 2014

Available online: 6 December 2014

Subject Heading: Financial management

JEL Classification: 

Pages: 46-57

Smarzhevskii I.A. Peoples' Friendship University of Russia, Moscow, Russian Federation
ivsmrudn@yandex.ru

Importance Globalization of economy and emergence of the information-oriented society lead to increased uncertainty at the level of national economies, sectors and economic agents. The speed of business processes in the real sector increases, and the volatility of financial markets, which review asset value every second, enhances. Accordingly, the role of managerial decisions enhances at all levels of economy. These considerations determine the relevance of theoretical knowledge in the area of managerial decision-making. The practice of dividing management labor results in extremely frequent use of collective decisions. This determines the significance of structural properties of the body that makes such decisions.
     Objectives The research encompasses the classical model of collective decision-making, i.e. the garbage can model, which is realized, but not always correctly interpreted as a theory of organizational behavior (the garbage can theory) by modern researchers in the area of social and economic sciences.
     Methods In this paper, using logical analysis and taking into account the results of earlier simulation experiment I investigated the influence of a structure on the efficiency of collective decision-making system. The structure is understood as a proportion of resolved issues out of the total number of problems arrived in the system. I considered the specific type of organizational structure: a specialized access to the possibilities of choice.
     Results I have obtained an analytical solution for the case of arbitrary dimension of the decision-making system with heavy energy load: I have identified the maximum number of problems that can be solved, and also have obtained a probability distribution of outcomes. I obtained these results by assuming a uniform distribution of effective energy between managers. I also established a probability distribution of outcomes for a number of special cases of the decision-making system of low-dimensional configuration.
     Conclusions and Relevance The obtained result enables to compare the efficiency of the considered decision-making structure with a non-segmental access, which is most frequently cited in publications, where all problems are solves at light and moderate energy load of the system.

Keywords: problem, decision, garbage can model, specialized access, specialized decision structure, heavy load, decision maker

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