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Allocation of managerial effort: An investigation of the relationship between decision strategies, environment, and performance<1>
Author(s) -
Freeland James R.,
Stabell Charles B.
Publication year - 1978
Publication title -
behavioral science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.371
H-Index - 45
eISSN - 1099-1743
pISSN - 0005-7940
DOI - 10.1002/bs.3830230312
Subject(s) - rothschild , work (physics) , process (computing) , computer science , decision rule , decision maker , operations research , selection (genetic algorithm) , decision process , management science , microeconomics , economics , mathematics , artificial intelligence , engineering , mechanical engineering , archaeology , history , operating system
The work presented in this paper concerns the decision‐making process in complex organizational systems. It investigates decision‐making rules which seem plausible in that they are consistent with assumptions concerning limits on a decision maker's information‐processing capacity. The structure and relationship between decision environment, manager, and decision strategies are modeled in stochastic terms and resulting performance is studied using, Monte Carlo simulation. The basic analytical framework, initially developed by Radner and Rothschild, considers a manager who is responsible for n activities. At the beginning of each time period the manager must decide how to allocate his time among competing activities. If at time t the manager devotes all effort to activity i , its performance will improve or remain unchanged according to a stochastic rule. Likewise, if no time is allocated to an activity, its performance deteriorates or remains unchanged. Different decision strategies are investigated including putting out fires, adaptive random selection, and constant proportions. The goal is to gain insights which are useful in both describing and prescribing managerial behavior in organizations. Limitations of the model and future work are discussed.