Rational decision making in management. Management Ch. 5 Decision Making; Ch. 8 Global Management Flashcards 2019-01-31

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Pros and Cons of the Rational Decision Making Approach

rational decision making in management

The main problem whi8ch the manager may face at the implementation stage is the resistance by the subordinates who are affected by the decision. Economic man is always in search of an optional solution or best way of doing things for maximising his benefits. Everyone has to make decisions. You can give each of the possibility a chance of yes and no in percentages and calculate the amount invested against the amount received. Let us examine some of the rational, normative approaches of some of these experts. Gross suggested three dimensions to determine rationality: i the extent to which a given action satisfies human interests; ii feasibility of means to the given end; iii consistency. Depending on the relative need for correctness and acceptance, any of these four strategies can be effective: - The leader makes the choice with some assistance from experts.


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Decision

rational decision making in management

Social and Cultural Influences The social and group norms exert considerable influence on the style of the decision-maker. In essence, if the are not properly discounted for changes due to , the chosen alternative may not be optimum. Expectation of the decision-maker: People with high expectations are generally highly optimistic in nature and are willing to make decisions even with less information. Types of Decisions Categorizing decisions using such typologies gives some managers the confidence derived, no doubt, from the illusion of having organized the problematic situation they need to deal with the real task at hand, which is to make a choice of a solution and to implement it. By adopting a project-based learning perspective, this study sets out to develop a framework to integrate organizational…. The decision to be chosen should ensure the maximum possible economy of efforts, money and time. Decisions regarding determining costs, setting prices, establishing eligibility 1c.

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Process of decision making

rational decision making in management

Thus, collection of right type of information is very important in decision-making. Decision-making is an integral part of modern management. Formulating Decision-making Problems as Linear Programmes. Thus, we need to understand the following three points: a The proportion of time devoted to each of these activities will vary from one situation to another, from one level of authority to another, and from one manager to another. These types of feelings are instinctive and rely on intuition and not facts. A manager may have to make certain adjustments while taking decisions, even defying the norms of rationality.

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Factors Affecting Decision

rational decision making in management

The most common method is through intuition, i. For example, Hitler found himself bound by his own decisions. The problem should be classified keeping in view the following factors: i the nature of the decision, i. Two models or approaches explain the behaviour of the decision maker. To Know more, click on.

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Rational Decision Making for Managers: An Introduction

rational decision making in management

Second, perception is highly subjective, meaning that information gets distorted in order to be consistent with our pre-established beliefs, attitudes and values. This information will be very useful in taking the corrective measures and in taking right decisions in the future. If they are found not to be quantitatively measurable, then he should assess the importance and influence and then come to a conclusion. The rational decision-making model is a structured and sequential approach to decision-making, aimed at seeking precise solutions to well-defined problems using precise methods. This model is also based on prediction of outcomes based on different solutions; however our ability to predict the future is often limited and hence skewed. Some people cannot admit that they were wrong and they continue with their decisions even ignoring evidence which indicates that a change is necessary.

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Project Management

rational decision making in management

It involves a search for relationships among the more critical variables, constraints and premises that bear upon the goal sought. While taking a decision how does a manager perceive the things, how does he react and how does he try to resolve, all this is human behaviour. Now, Violet needs to consider the alternative list she developed. Typical categories and their characteristics used by many managers are displayed in Figure 1. This approach is pragmatic and holds the view that a manager is a human being and cannot be fully rational because he is confronted with many constraints, problems, limitations and inadequacies. Implementation involves the following steps.

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Steps in rational decision making

rational decision making in management

Violet feels that in order to increase profits and protect her employees' jobs, she needs to look for other ways to cut costs. Thus, the optimizing process has no need for a recursive loop back to Step 4. Mixed Strategies for Players with Three or More Strategies. Some choices are readily available and a match is made between project and funds. This situation may account for positive or negative risks and for the risks we can deduce a risk response plan accordingly. This can be very important when making high value decisions that can benefit from the help of tools, processes, or the knowledge of experts. Here, you can see that decision making is an iterative process.

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Process of decision making

rational decision making in management

The decison is announced to the group. Lesson Summary Certain types of business decisions are instinctive and rely on intuition and not facts. Decisions regarding purchases of services, supplies 1d. In the rational model, the business decision maker needs to optimize the solution, or select the best alternative. Factors Affecting Decision-Making Some of the factors and personal characteristics that have on impact on the are described below. As evidenced by the foregone definitions, decision making process is a consultative affair done by a comity of professionals to drive better functioning of any organization.

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