RATIONAL DECISION MAKING
Rational decision making is a decision making model that involves the logical selection among possible choices that is based on reasoning and facts. In a rational decision making process a business manager will often employ a series of analytical steps to review relevant facts observation and possible outcomes before choosing a particular course of action. Rational decision making can also be termed classical decision making.
Rational decision making is part of the normative or prescriptive decision theories where there is a preset way of making decisions, i.e. norms, standards, and policies already in place are used as a criterion or base line for making decisions.
Decision making models and approaches have revolved over time, researchers have identified the following key models and approaches:
- Rational Decision Making Model (classical Decision Making Theory) - Rational Decision Making is elaborated upon in the following section.
- Bounded Rationality Decision Making Models
Bounded Rationality Decision Making Models is a model that was developed by Herbert Simon. He brings forth an argument that says decision making can never be perfectly rational processes, but rather one that is has within it a number of constraints and limitations. These include information constraints i.e. it is likely that information gathered may not be sufficient to develop all possible alternatives. The second limitation is people’s ability to fully comprehend the complexity of the problem at hand. Thirdly when making a decision is being made time constraints are automatically imposed.
In view of these constraints it can than be said that cannot be based on perfect knowledge and analysis, but rather on the results of mo...
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...ss process maps) using computer systems such as visio and igrafx.
1. Defining the Problem
Businesses Process in the public sector are currently viewed as being ineffective and inefficient when delivering services to citizens, there is a number of bottlenecks when rendering service delivery to clients. This is especially evident in service delivery strikes currently spreading in South Africa.
The goal therefore of Business Process Improvement is to increase customer satisfaction i.e. create a positive citizen experience.
The aim therefore of this decision making exercise is to select business processes for improvement.
2. Gather Information
Information about the department in question is gathered, this will include their strategic objectives, their targets and their level of maturity, by means of desktop research and information gathering workshops.
Rational Choice Theory - Rational choice theory, as defined by the textbook, is "A perspective on crime causation that holds that criminality is the result of conscious choice. Rational choice theory predicts that individuals will choose to commit crime when the benefits of doing so outweigh the costs of disobeying the law" (Schmalleger 76). It is an economic principle that assumes that individuals always make prudent and logical decisions that provide them with the greatest benefits or satisfaction and that are in their highest self-interest. It should also be noted that most mainstream economic assumptions and theories are based on rational choice theory. According to the lawdictionary.org, rational choice theory "attempts to explain social phenomenon in terms of how self-interested individuals make choices under the influence of their preferences. All parties try to maximize their advantage, and to minimize their disadvantages" (lawdictionary.org). An example of rational choice theory would be a person stealing money from a company that they work for, with the intent of having the benefit of getting rich at no cost. The person believes that he or she will not get caught, thus not having to pay any costs, making it a rational decision or choice in their
There are two ways in which people make decisions in their daily life or at work: Intuitive or rational. If we talk about intuitive decision-making (IDM) we talk about the subjective decisions that are not based on any facts and purely instinctive, for example whether or not to cross the street. These decisions are fast occurring, have no any need for reasoning and are used if facts are unavailable or making a decision is very difficult.
In the rational model of reasoning decisions are made by evaluation. There are logical steps or processes that are taken to make policy decisions. The goal or purpose is clearly defined or known. All alternatives are evaluated and taken into consideration
Decisions are produced using among two or more choices. We frequently think that the best decision maker is rational and makes persistent, value-maximizing decisions inside determined imperatives. These decisions take after a six-stage rational decision-making model: (1) define the problem, (2) identify the decision criteria, (3) allocate weights to the criteria, (4) develop the alternatives, (5) evaluate the alternatives, and (6) select the best alternative. (15th ed)
Having learned how decision-making occurs overall and in business, this section describes how business decisions have been ineffective when using traditional theories and styles. Research shows that leaders make poor decisions when using old-fashioned techniques. However, when practitioners apply academic decision-making theories and styles in real-world situations, leaders find these tools and methods cumbersome and irrelevant to decision quality and effectiveness (Yates et al., 2003).
In everyday real life situations, one keeps on making various decisions depending on a number of factors. Thus, decision-making is an integral tool in human life, and one cannot avoid it. In view of this, experts report that individuals make use of varying decision-making models to arrive at a decision that suits them. Here, the writer presents four decision-making models, namely the classical, behavioral, satisficing, and optimizing models.
1. Decision making is the study of identifying and choosing alternatives based on the values and
As a manager, decision making is much more than simply making a decision. There are steps or methods he/she should take in order to evaluate the situation as well as the possible outcomes. This paper will discuss how managers can make ethical decisions and how they can remove any personal biases they may have. In addition, the paper will state how system one and two thinking affect business decisions and how a manager can keep these two types of thinking in balance. Furthermore, the paper will discuss how rational decision making affects negotiations, as well as suggested steps for a manager to negotiate properly. After, the paper evaluates creative problem solving and how it can help alleviate bounded awareness. Moreover, the papers state that the Kepner-Tregoe method guides a manager into assessing their decision and the risks associated with their decision. Finally, the paper discusses how overconfidence negatively affects a manager’s decision-making skills. After
Rational choice theory directly evolved from classical theory which is a theory of crime suggesting that criminal behavior is a matter of personal choice, made after the individual considers its cost and benefits, and that the criminal behavior reflects the needs of the offender. It focuses on internal and external factor- poverty, IQ Education, rather than personal choice and decision-making.
Individuals make economic decision based on a variety of reasons. The rational is based on each individual’s need or desire for a commodity. People go through several decision-making processes before making the final decision and are often not conscious of the process. Obviously, decision- making covers a wide area, involving virtually the whole of human action. Often people are not conscious of the process.
(2015) discuss three different perspectives that can be utilized to analyze a problem: “(1) the rational model, (2) the organizational process model, and (3) the…collaborative model” (p. 244). The decision model utilized by decision makers will greatly influence how a problem is perceived and interpreted (Nahavandi et al., 2015). Therefore, it is critical that managers are aware of how the lens of the decision making model will influence the outcome of the decision making process. When utilizing the rational model of decision making the “phases for decision making are performed deliberately and consciously, relying on the rationality of the decision maker’s thoughts and behaviors” (Nahavandi et al., 2015, p. 244). This decision model assumes that the individuals making decision behave in a rational manner when making decisions or taking other actions (Nahavandi et al., 2015). In the context of decision making, Nahavandi et al., state that “to behave rationally is generally understood to mean that people to try to maximize the value they receive in any situation” (2015, p. 244). Given the nature of the problem facing BSE Veterinary Services the rational model would provide the best framework for making this
As any strategist can tell you, being anticipatory gives one a great competitive advantage. It is very important for businesses to complete a thorough analysis of any given situation in order to develop a solution. Picking the correct tool or technique is crucial to the success of a group searching for the best solution. There are important decisions being made each and every day. Some of these decisions will mean the difference of a corporation's success or failure and will effect the livelihood of those employed by or dependant on the corporation and its success. There are key questions that must be answered and obstacles anticipated in order to come up with the proper solution. Failure to make the right decision at the right time can mean losing business to a competitor and threatening the future of an organization. Tools and techniques for decision making help you to identify new opportunities, avoid being blindsided and turn potential threats into healthy prospects. There are many tools and techniques out there to pick and chose form. The choice is yours.
An employee does an unsatisfactory job on an assigned project. Explain the attribution process that this person's manager will use to form judgments about this employee's job performance.
The Rational Choice Theory also referred to as the Choice Theory and the Rational Action Theory. Used by social scientist and economists for understanding people and behavior. McShane and Von Glinow (2013) states that “the Rational Choice Theory was established approximately 2,500 years ago when Plato and his contemporaries in ancient Greec...
Decision-making is regarded as the cognitive process resulting in the selection of a course of action or a belief among several alternative possibilities. Every decision-making process produces a final choice that may or may not lead to action. When communication is systematic and accurate, decisions tend to be more effective and conversant. The more we are confident in our communication the better we can take decisions.