The Rational-deductive Approach

The Rational-deductive Approach

The rational-deductive approach

The rational-deductive approach appears to have ready application to business decision making. Suppose that decisions are made in a company on the basis of the following three values and general principles derived from them: (1) profit (this company will attempt to earn the highest possible profit consistent with prudent management of its assets); (2) individualism (the affairs of this company will be conducted in ways consistent with the inherent dignity of the individual); and (3) progress (wherever possible new and better techniques of production and distribution will be developed and utilized). Further suppose that a decision must be made about whether or not to automate part of the production process.

Let us assume that such a step would favour the profit and progress values but go against the value of individualism. to make a decision in such a situation, it is necessary to develop intermediate principles which govern the application of the general principles in specific instances.

For example, an intermediate principle derived from the value of individualism might be, "Whenever an innovation eliminates the job of an employee, he will be given the opportunity to shift to another position in the company at no loss in pay or seniority." Such an intermediate principle would make it possible to make the decision to automate, but to carry out the process in a way which is in harmony with the set of ultimate values.

The rational-deductive approach is logically impeccable, but there are practical problems in applying it. The number of values, general principles, and intermediate principles involved in any decision-making situation is potentially vast because of the complexity of the social environment of business and the large number of variables in business decisions. The unaided human brain is inadequate to the task of organizing and operating such a system, but the electronic computer can do the job. Therefore, the computer model is restricted to those companies with computer facilities and the staff needed to gather the facts required by the intermediate principles. Even where such facilities are available, decisions deduced by computer should be viewed by top management as hypotheses to be tested against the subjective wisdom and judgment it has developed over the years through practical experience.

The decision-making method of situation tb1 can be applied directly to the business world. The New Morality is more concerned with methodology than content. Its basic position is that in decision-making situations involving value conflict, there is no way of setting up a moral system which provides a solution. It views the equilibrium model as anti-nominal (i.e., ad hoc, based on no general moral principle) and the computer model as legalistic. The situational model hinges on the acceptance of social responsibility in a way similar to the acceptance of Christian love in the New Morality. It cannot be spelled out to fit possible future decision-making situations. Each case must be analyzed separately. It is up to the manager to determine what the socially responsible decision is in the decision-making situation he faces.

This model most heavily emphasizes individual responsibility and freedom. The manager who uses it is on his own. He must face up squarely to the moral aspects of the situation. He must grapple with the problem of conflicting values and be prepared to defend his judgment against criticisms from the parties affected. This approach requires courage, insight, and a speculative turn of mind. It is likely to work well only for managers who are well on the way to being moral philosophers; but when the prerequisites are met, the results can be spectacularly successful. Of the four models discussed, it best fits the UK manager's self-image of a tough-minded individual who demands freedom and is willing and able to be responsible in its exercise.

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