Rationality is an underutilized concept for creating and analyzing behavioral simulation models of business systems. Much explanatory power and insight can be gained by assuming that business decisionmaking is intendedly rational, examining the factors that limit rational adjustment in business decisions, and exposing in simulation experiments the rationality the underlies even the most counterintuitive total-system behavior. The paper begins by defining rationality and illustrating the difference between objective rationality, which is common in behavioral models of decisionmaking. Two methods of analysis are then proposed for clarifying the theory implicit in a simulation model. The first method is premise description. In describing decision functions and model equations attention should be drawn to the organizational processes of factoring, goal formation, routine and tradition that limit the area of rational adjustment in business decisionmaking. The second method is partial model testing. A sequence of partial model tests should be designed to examine the intended rationality of decisionmaking. The intuitively clear and sensible behavior of partial tests should be contrasted with the more complex and often counterintuitive behavior of the whole model. The application of these methods is illustrated with a  simulation model of a sales organization containing linked decision functions for sales objectives and salesman overtime, and a behavioral function for sales force motivation.

This is the whole item.

Date created

• 1983

Type

• Document

Processing Activity

• Processing documentation available at: https://wiki.albany.edu/display/SCA/Processing+Ingested+Digital+Files

License

• Creative Commons BY-NC-ND Attribution-NonCommercial-NoDerivs 4.0 International

  
  Contact Us for questions or additional rights.

ITEM CONTEXT

Part of

b0aa2a699b54f0d19f6a9d93bdbcfa18

Scope and Contents

Part of

cf82ceba47eedd73f41b00918de16477

Scope and Contents

Part of

23d738ba88f8333bc39725f9cb5bd0b8

Scope and Contents

Collection

System Dynamic Society Records

Scope and Contents

Collecting area

• This collection is part of the University Archives