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Financial Analytics: Science and Experience
 

A comparative analysis of organizational structures of a collective managerial decision-making system

Vol. 8, Iss. 16, APRIL 2015

PDF  Article PDF Version

Available online: 1 May 2015

Subject Heading: MATHEMATICAL ANALYSIS AND MODELING IN ECONOMICS

JEL Classification: 

Pages: 45-57

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

Importance Accelerated economic processes in the real sector and increased financial markets volatility due to the globalization of the economy and emergence of the information society raise uncertainty for national economies, individual sectors and economic agents. In this regard, managerial decisions at all levels of economic management start playing a more important role. These considerations determine the relevance of theoretical knowledge in making practical decisions. In practice, collective decisions are most commonly used, thus determining the significance of structural properties a corporate decision-making body has.
     Objectives
The research focuses on a classical model of collective decision-making, i.e. a garbage can model. The garbage can model represents a modern theoretical trend in studying the organizational behavior (garbage can theory). As part of this theory, I study a decision-making mechanism, which provides for a specialized access to issues for managers in order to take a relevant decision.
     Methods In this article, using a logical analysis and taking into account results of the previous simulation experiment, I investigate how the structure of the collective decision-making system influences its effectiveness understood as a percentage of issues solved against the total number of issues that were handled using the system.
     
Results As for a decision-making system of random dimensions, assuming various scenarios of manpower, I get an analytical solution. I determine the maximum number of issues that can be solved, and probable range of outputs. I compare the efficiency of the system for four marginal variants of organizational structure, i.e. the two variants that I studied before and the other two variants I am discussing in this article.
     Conclusions and Relevance I compared four types of decisions and the efficiency of the decision-making system for four marginal cases of its organizational structure. I find out how complexity of problems matches the organizational structure types, thus making the decision-making system operate more effectively.

Keywords: problem, decision, specialized structure, decision-maker

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