This paper analyzes a decision problem confronting a major automobile manufacturing company based in the United States. The automobile manufacturer is expanding its marketing operations in China. The United States-based automobile manufacturer - General Motors - is a real company, and General Motors is expanding its marketing operations in China (McCormick, 2004). The decision problem stated for this analysis, however, is partly hypothetical, although the general issue does confront General Motors.
The American-based automobile manufacturer also is a major equity shareholder in a China-based automobile manufacturing company in a joint-venture. It might be possible for General Motors to reduce costs for the automobiles that it markets in China is the company has some of the assembly work performed at the production facility of the China-based automobile manufacturing company in which it has an equity interest. It also might be possible to lower costs if General Motors has some of the components and parts for the automobiles marketed in China manufactured by the Chinese company (Guilford, 2004; Armstrong, 2004). This decision problem is analyzed within the context of four group decision-making models.
Analyzing the General Motors Decision-Problem in Relation to the Rational Model
The rational model of decision-making "is based upon an economic view of decision making. It is grounded on goals/objectives, alternatives, consequences and optimality" (Lahti, 1996, p. 2). In relation to the decision problem confronting General Motors in relation to the expansion of its operations in China, the company's goals and objectives include prominently (a) building market share and (b) making the China market a major profit center for General Motors. The company's alternatives in relation to the current decision problem are as follows:
Ship fully assembled automobile from the United States to China
Ship automobile bodies and co...