Application of a logico-mathematical decision-making model by general managers of cooperatives / Roberto F. Villaroel. 6

Thesis (Ph.D.) -- Pamantasan ng Lungsod ng Maynila, 2000.;A dissertation presented to the faculty of the Graduate School of Management in partial fulfillment of the requirements for the degree Doctor of Business Administration. 56

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ABSTRACT: The purpose of the study is to determine the minimum requirement of a satisfactory decision-making model which will yield a course of action from at least two choices which will balance whatever conflicting objectives confront general managers of cooperatives. Particularly, this study sought to answer/ verify the following questions: 1. What is the proximity of the existing practices of making decisions y co-op general managers to the logico-mathematical model? 2. What is the co-op general manager's level of competence in applying the logico-mathematical model in making decisions? 3. To what extent do the following factors/ elements influence the use of the logico-mathematical model of decision-making: a. age b. gender c. educational attainment d. civil status e. number of years in co-op movement 4. What is the relationship between the index of proximity of the existing decision-making practices of co-op general managers to the logico-mathematical model of decision-problem solving and the variables mentioned above, Item 3? RESEARCH HYPOTHESIS: In this study, the logico-mathematical decision-making model was empirically tested in the null hypothesis; to wit: NULL HYPOTHESIS (Ho): There is no significant relationship between (a) variable age, gender, educational attainment, civil status, number of years in cooperative movement and the use of the logico-mathematical model of decision-making process as general managers of cooperatives (b) existing practices of decision-making by general managers of cooperatives and their awareness of a logico-mathematical model. A descriptive research design employing a non-parametric formula (chi-square analysis) for associating two sets of joint observations was employed in this dissertation. Associational survey as a research design was used since it cannot be assumed that the population of interest of the study; namely, the general managers of cooperatives, who actually experience optimizing problems, are normally distributed. In order to design a satisfactory optimizing model, three major steps were followed; namely, the development of a prototype model based on the definition of a logico-mathematical optimizing model as inspired by readings of related conceptual literature and secondary research work. The succeeding sep was to compare the logico-mathematical model to what is in actual use by business decision makers in making a choice among alternative courses of action for optimal satisfaction of prioritized goals. The third step was finding whether there is a relationship between similarity of procedures and similarity of results using the co-op general manager's modified value indices and modified ranking of alternative courses-of-action in a logico-mathematical model. The population to be interviewed consisted of 20,000 general managers, of cooperatives operating nationwide, whose position by nature deals with multiple business goals indicating the four functional areas of management; namely, production, marketing, finance, and human resource development. These managers represented the various sectors of cooperatives, i.e., credit, consumers, producers, marketing, service, multi-purpose livelihood enterprises and banks. These managers came from cooperatives of any size. This means that capitalization or membership were not considered in the selection of the cooperatives for inclusion in this study. a. Twenty-one general managers of cooperatives were involved at the rate of seven general managers each from Luzon, Visayas, and Mindanao. b. This limited number is accepted considering the nature of the data collection process which involves a comprehensive interview of the decision-making procedures of these general managers. The non-parametric approach to be applied in the data analysis likewise permits the use of a relatively small sample size. c. Initial stratification by region and economic sector category was done among the elements of the population. This was followed by a purposive selection of the participants on the basis of the following criteria: 1. Must represent a specific cooperative category 2. Must have assumed the position as general manager at least for the past 5 years. 3. Must be willing to participate in the study in the pursuit of an academic exercise. An interview schedule was devised as to yield answers to the specific be objectives of the study. Difficulties during the interview sessions of the pre-test were corrected before a full scale lunching of the survey was done. Actual data collection was scheduled and was done actually by the researcher. Additional clarifications were explained during the interview meetings. Considering the different locations of the participants, the interviews were completed in three weeks. Chi-square was used in the quantitative analysis (treatment) of the data so as to yield measures of significance of relationship between the variables in the joint observations. FINDINGS: At 5% level of significance and one degree of freedom, the results of the test of the null hypothesis revealed that the proximity of the existing decision0making practices to a logico-mathematical model of decision problem solving has the following relationships with profile characteristics enumerated below: a) No significant relationship with age, gender and civil status b) There is reason to reject a relationship of no significance with years of formal education and inclusive years of experience with the co-op movement. At 5% level of significance and one degree of freedom, there is no reason to accept the null hypothesis that there is no significant relationship between the co-op general managers' existing practices of decision-making which are predominantly logico-mathematical (L-M) and their level of awareness (included) of its existence. CONCLUSIONS: The implication of the findings for revising the existing body of knowledge lies in its revelation that the genetic factors endemic in aging and gender appear not to influence the propensity to apply the L-M decision process while the environmental exposure attendant to years of experience in the co-op movement and years of formal education do influence positively the propensity to apply the logico-mathematical decision procedure. A satisfactory decision-procedure must contain a minimum of two steps prior to making a choice from among alternative courses of action; to wit: prioritization of objectives and prioritization of alternative courses of action in terms of their probabilities of success in meeting each objective. The possible contribution of the thesis to research methodology is its demonstration of isolating independent variables which affect the application of the logico-mathematical decision procedure and measuring their importance relative to each other when data cannot be assumed as coming from a population normally distributed among the range of values of specific profile characteristics. The relevance of the results to previously published studies, as in the study of lexicographic ordering of wants (Encarnacion, 1980) either in individual or in group decision-making, is the confirmation of the predominance of recent exposures to stimuli as a factor in determining how a person or a group will decide. Corollary, this confirms Vroom's (1964) contention that ones perception of whether the environment will warrant the exercise of one's acquired abilities appears to influence ones propensity to use a procedure such as for example the logico mathematical decision-procedure. RECOMMENDATIONS: The practical applications of the findings which are recommended are: 1. In designing a training program on decision-making, experiential approaches should be emphasized such as the employment of role-playing in case analysis and in business games; 2. In requiring accountability in decision-making not only the results shall be given emphasis but also an explanation of the process by which the results are arrived at becomes necessary and hence forcing rationality or transparency which is the central characteristic of L-M model. 3. Change agents who would want to influence the results of decision-making must pay attention to evolving training programs on L-M decision models which is a procedure whereby the factors that enter the process are logically and empirically determined.

4. Conduct a parallel study among general managers of corporations to find out if conclusions will differ. The proceeding conclusions and recommendations drawn are naturally affected by the following reorganized limitations of the study: 1. The limited sample size, though permissible as previously articulated, is barely above the minimum requirement so as to be able to use chi-square analysis. 2. A methodological weakness concerns the inability to use variables for joint observation unless such variables yield to identical scale ranging. The following are possible research agenda which may be pursued to test further the merits of the L-M model of decision-making: 1. Will the conclusions drawn differ as sample size is enlarged? By what quantum change in sample size will a change in conclusions drawn occur? 2. Why is it that for a relatively few respondents whose level or index of competence is relatively high, their index of proximity of existing practice to the L-M procedure whether volunteered or induced is relatively low? 3. Relatively more interesting is the case of the few who understood the logico-mathematical decision procedure after inducement, but still refuse to use the L-M procedure; why?

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