Decision Problem at Corporate Level Intr

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).

. . .
s and perceptions. This process involves a cycle of bargaining among the decision makers in order for each one to try to get his or her perspective to be the one of choice. More specifically, this process involves each decision-maker trying to sway powerful people within the situation to adopt his or her viewpoint and influence the remaining decision-makers" (Lahti, 1996, p. 3). Additionally, "the political model does not involve making full information available or a focus on the optimal viewpoint like that of the rational model (Lahti, 1996, p. 3). Lahti (1996) stated further that full "information is highly unlikely, since the political model operates based upon negotiation that is often influenced by power and favors" (p. 3). With respect to the decision problem confronting General Motors in relation to its marketing expansion into China, the political model would provide the company's Chinese partner and the General Motors marketing organization in China with opportunities to argue against the rational model decision. These parties could emphasize the importance for General Motors to seek the lowest production costs for automobiles sold in China because income levels in China are lower than they are in the United States
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Approximate Word count = 1413
Approximate Pages = 6 (250 words per page)

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