Allison examined President John F. Kennedy's actions and decision-making process during the Cuban Missile Crisis and his skilled dealing with Russian president Nikhal Khrushchev.

 

Allison research analyzed the three model negotiation processes used and while complex, the fundamentals can be broken down and used at a micro level, one-on-one and face-to-face mediation process. A skilled negotiator should use Kennedy's experience when researching and preparing for resolutions under any regime, conflict mediation, negotiation, or arbitration and more so when involved with corporate clients.

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The Rational Actor Model

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The Rational Actor Model (RAM) is one of the cornerstone theories in corporate, governmental and international decision-making. This model assumes that actors, whether individuals, organizations, or states, make decisions by systematically evaluating available information to maximize their utility and understanding their behaviours based on the principles of rationality. As a negotiator it requires you to assess a strategic position within the negotiation process based on the four principal assessments: -

1. This involves assessing the potential costs and benefits of various options and selecting the one that offers your clients the highest benefits. Decisions should not be evaluated by the immediate results but by the long-term strategic position that evolves from the current outcome.

2. Comprehensive Information: This requires gathering accurate and comprehensive data on all possible options and their potential outcomes, as well as understanding the long term strategic probability of each outcome.

3. Objective Analysis: Actors must calculate the potential consequences of each option and choose the most logical course of action based on objective analysis, devoid of emotional or irrational influences.

4. Strategic Thinking: This requires strategic thinking, beyond the actors’ own actions, but also anticipating the actions and reactions of other actors. This is particularly relevant where multiple stakeholders or adversaries are in competitive business environments or others hold a balance of power.

 

The Rational Actor Model emphasises moderate rationality, utilising strategic thinking and utility maximisation to gain valuable insights into how actors make choices in complex and often high-stakes environments. As in a ‘litmus test,’ strategy must always be congruent on the question, ‘what if?’

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In conflict negotiation, the Model is used to evaluate different strategies and may include whether to enter mediation talks, escalate to litigation, ‘surrender’ or ‘walk away,’ or seek partnerships across a wider long-term base. Each decision is based on an analysis of how it will affect the overall strategic goals.

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However, it is crucial to recognise the Model's limitations and supplement it with other theories and perspectives to gain a more comprehensive understanding of decision-making behaviour.

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Critiques and Limitations

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Despite its widespread use, the Rational Actor Model is not without its critics. There are several notable limitations to the mode:

Actors rarely have access to complete, comprehensive information, leading to suboptimal choices. Human decision-makers are subject to cognitive biases and emotional influences, which can lead to irrational decisions. Factors such as overconfidence, loss aversion, and group-think can all skew the decision-making process.

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The model assumes that actors have clear, consistent preferences, but in practice, these preferences can be complex and conflicting, which often leads to more complicated issues in the future.

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The Organizational Process Model  (OPM)

 

OPMs work well in highly structured environments, such as the financial services and investment markets, food production and health services where compliance and adherence to tightly controlled or regulated processes are critical.

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At the heart of all OPMs are Standard Operating Processes (SOPs), predefined methods for carrying out recurring tasks. These procedures ensure consistency, efficiency, and predictability within the organization. While individuals within an organization aim to make rational decisions, their rationality is bounded by limited information, time constraints, and cognitive limitations. SOPs help simplify decision-making by offering a standard response to everyday situations, reducing the need for complex analysis.

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During crises, organisations rely heavily on emergency SOPs. For example, hospitals have standard procedures for handling medical emergencies, while corporations have protocols for data breaches or natural disasters. These SOPs are designed to provide clear guidance under stressful conditions, helping maintain order and effectiveness. While I was a Search and Rescue Coordinator, our SOPs included time frames within which specific processes had to be implemented, at timings for engagement with other organisations. A compliance officer would then check and sign off on those obligations and duties as done.

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The benefits of OPMs are that operations are streamlined, clear instructions are provided for routine tasks, activities are conducted consistently and efficiently, and they serve as valuable training tools for new employees, providing them with a clear understanding of their roles and responsibilities.

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Critiques and Limitations

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The adage, ‘the more rules there are, the more likely you are to break them,’ however applies to the Organizational Process Model (OPMs). Problems can include misinterpretation of instructions, misunderstanding of relationships between parties, cultural insensitivity, and inflexibility when unique or unexpected situations arise, compounding problems (ripple effect) because operatives lack flexibility due to excessive micro-management or dependence on deeply entrenched prescriptive processes.

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In a recent example of rigid ‘in-house’ narrow regulatory processes, Main Roads undertook a $14million road upgrade without consultation with City Water, who, within six months, dug part of the road up to replace aged water pipes because traffic volumes and weights exceeded pipe structural integrity. City Water sued Main Roads and won in a highly embarrassing action resulting in the dismissal of the CEO and senior staff at Main Roads.

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Because of their rigidity, OPMs become quickly outdated as environments change, becoming less adaptable to new or unforeseen circumstances because they cannot cover every possible scenario as it occurs. Modifying established procedures can be challenging, disruptive, and resistant to innovation or change. 

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This is particularly evident in highly organized social environments where religious and cultural challenges undermine innovation and progress. Individuals often feel threatened and insecure and find accepting new realities challenging.

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Upside and Benefits

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The organizational process model underscores the importance of structure and routine within organizations, pointing to the challenges these systems can present and explaining how decisions often result from established procedures rather than rational, strategic planning.

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Bureaucratic Politics Model  (BPM)

 

If you have walked into a Government Office and asked a simple question, only to be referred to three more people before finding out who can answer the question, you will understand the Bureaucratic Model.

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Utilising a plurality of actors, decision-making is not centralised but dispersed among numerous actors and can include politicians, bureaucrats, government officials, and other interest groups. Each actor has interests, agendas, and constituencies, which influence their behaviour and decisions but cannot make the final decision without consultation with others. Finding the person who can act with authority or make a decision on behalf of an organisation can often be complex. 

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Four key elements influence the bureaucratic politics model decision-making processes. Examples are;-

1. Decisions result from a political process where actors use their power and influence to advance their bias or vested interests. Power can come from formal authority, control of resources, expertise, or strategic alliances and are relative when determining whose interests prevail in the decision-making process.

2. Decision-making is characterized by bargaining and negotiation among actors. This process often involves trade-offs and compromises as actors seek to secure the best possible outcome for their individual goals while accommodating others' demands.

3. The political environment, including public opinion, media coverage, pay off’s and political leaders' positions, plays a critical role in shaping the decision-making process. Actors consider the broader political context and how it affects their individual strategies and actions. Most pronounced amongst those seeking high profile executive positions, ambition often clouds rational judgement as personal goals dominate those individuals’ inputs into any negotiation process.

4. An actor's position and specific role within the organisational hierarchy can significantly influence their perspectives and priorities. For example, a military leader may prioritize national security, while a treasury official may focus on economic stability​

 

Critiques and Limitations

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The model highlights the importance of political considerations and external environments that shape policy makers decisions, which are often overlooked in more abstract models. The Bureaucratic Model is invariably complex and ambiguous due to the multitude of actors and interactions involved making it challenging to create clear, predictive models of decision-making.

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Principal actors are constantly balancing their decisions between democratic support (being promoted or voted into and holding office) and autocratic governance and policymaking (the need to be seen as a decision maker).  This focus on political processes and bargaining makes it less helpful in predicting specific outcomes compared to more structured models.  A further real risk exists, that after a decision has been made, the decision maker is removed from office, and the ‘new broom’ sweeps the floor clean, making prior decision-making processes null-in-void.

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Notwithstanding its weaknesses, the Bureaucratic Politics Model provides valuable insights into the complexities of governance and policymaking by focusing on the plurality of actors, power dynamics, bargaining processes, and the broader political context. While the model has limitations, particularly in complexity and predictive power, it remains an essential tool for understanding the intricate interplay of politics and bureaucracy in shaping governmental and corporate decisions.

 

 

Summary​

In his classic 1969 article, Conceptual Models (and the Cuban Missile Crisis) Allison identified the three pillars of organizational negotiation.

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The Classical Rational Actor Model (RAM) identified the State as a unitary rational actor making all the decisions. Kennedy represented the State within the United States while Nikita Khrushchev represented all people of the Russian States.

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The organisational process (OPM) identified how sub-units of the state act according to pre-determined procedures to produce an “output.” The state is still essentially a unitary actor, but the analogy is now of a team game. The team captain calls specific (pre-planned) plays involving all players to move the ball forward.

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The Bureaucratic Political Model (BPM) implies “where you stand, depends on where you sit.” Those in charge of various responsibilities make predictable arguments based on their present position. Policy “outcomes” result from negotiations among those who wield degrees of authority or influence.

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The Bureaucratic Model dispenses with the “unitary” management, instead decisions and actions are essentially intra-political outcomes, guided by what happens but resulting from compromise, coalition, competition, and confusion among power brokers who see different faces of an issue.

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George W Bush and his successor, Obama's management of international conflict could not be further apart.  Bush made decisions mainly on his own, leading to the invasion of Iraq. Obama managed on an entirely consensus basis, choosing not to intervene in the invasion of Crimea in 2014 fearing a public backlash.

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As a mediator and negotiator, it is critical to identify predispositions and dependence upon individuals’ preferential decision-making styles. At an individual level, a spouse may act autonomously or in tandem with their partner or in a business dispute; the C.E.O. may make a ‘call’ with or without consultation of shareholders. It is your responsibility to understand the dynamics of those involved.

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