Exercise $3-2$ Using the Normative Decision Model

This exercise is based on the concepts and principles presented in the Normative Decision Model of leader. ship. Use the contingency factors presented in Table $3-4$ to analyre each case. Figure $3-2$ along with Table $3-3$ provides a guide to the appropriate decision styles for each case.

Case $1$: Centralizing Purchasing

You are the western regional manager in charge of purchasing for a group of hospitals and elinics. Your territory includes eight western states. You recently joined the group but you brought with you nearly $10$ years of experience in purchasing with one of the company's major competitors. One of your major achievements in the previous job was the implementation of a highly efficient companywide purchasing system. The health group oversees more than $30$ associated health clinics and hospitals in your region alone. Each center operates somewhat independently without much control from the regional purchasing manager. Several of the clinics are cooperating under informal arrangements that allow them to get better prices from suppliers. The purchasing managers from the larger hospitals in your region, on the other hand, have almost no contact with one another or you. As a result, they are often competing for suppliers and fail to achieve conomies of scale that would allow them to save considerable costs on their various purchases, In other cases, the managers rely on totally different suppliers and manage to obtain advantageous contracts.

With the pressure to cut health$-$care costs, the health group's board of directors and the group's president identified purchasing as one area where savings need to be achieved. You are charged with centralizing purchasing, and you are expected to reduce the costs of purchasing by at least $15$ percent within a year:

You still need to meet many of the purchasing managers who are supposed to report to you. Your appolitment was announced through a memo from the group's president. The memo also mentioned the need to cut costs in all areas and indicated the need to focus on purchasing as first step. The purchasing managers you did meet or contact were civil but not overly friendly. With only six months to show the first results, you need to start planning and implementing changes as soon as possible.

Analysis and Recommendation

Using the problem requirements, decision rules, and leadership styles of the Normative Decision Model, indicate which decision style$($s$)$ would be most appropriate.

What type of problen is it; group or individual?

Contingeney Factors:

Is there a quality requirement?

Does the leader have enough information to make a high$-$quality decision?

Is the problem clear and structured?

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Part I Building Blocks

Is employee acceptance of the decision needed for its implementation?

Will subordinates accept the decision if the leader makes it by himself or herself?

Do subordinates share the organization's goals for the problem?

Is there conflict among subordinates $($are they cohesive$)$ regarding the problem?

What are acceptable decision styles? Why?

What are unacceptable decision styles? Why?