What are the 3 models of decision
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Each of these is discussed below. Back to: BUSINESS MANAGEMENT Back to: RESEARCH, ANALYSIS, & DECISION SCIENCE What is Rational Decision-Making Process?Rational decision making is considered logical and consistent with the intent to maximize the value, quality, or likelihood of achieving the intended outcome. Rational decision-making can be explained as several procedural steps:
Critiques of the Rational Decision-Making ModelSome scholars and practitioners critique the decision-making process. It makes numerous assumptions about the situation and the individuals. It assumes that the decision-maker is able to fully underhand the situation and the implications of a decision. It assumes that managers are able to identify the available choices. It does little to account for the effect of biases on the decision-making process. Finally, it assumes that managers are in search of an optimal decision, rather than satisfying. Others argue that following such a detailed process is overly onerous. It requires too much time gathering information and evaluating the situation. It can lead to a failure to reach a timely decision. What is Bounded Rationality?The crux of the bounded rationality approach to decision making focuses on decisions that are good enough to address the situation. That is, the decision is adequate to address the situation, but it does not maximize the potential value in the situation. This is known as satisficing. Bounded rationally occurs when managers fail to search for potential options or knowingly limit the number of available options. The decision-maker focuses on options that meet a minimum number of decision criteria. Bounded rationality is often the result of a decision makers limited by the ability to process information. Individuals are heavily influenced by culture, internal politics, power considerations, and the tendency toward the irrational escalation of commitment. As a product of your environment and individual experiences, individuals are naturally affected in their ability to analyze potential solutions. What is Intuitive Decision Making?Intuitive decision making, as the name implies, relies on intuition in making a decision. That is, decisions often arrive at a decision to address a problem or situation without conscious reasoning. Instead, decisions are based on experience, feeling, and accumulated judgment. Managers routinely face decisions in challenging contexts, such as environmental uncertainty, stakeholder interests, time pressures, and the fallout from the decision. This reality can limit the ability to follow the rational decision-making process. Intuitive decision-makers will use environmental scanning to identify patterns based upon prior experience or knowledge. This allows the decision-maker to develop a course of action. The decision-making process is replaced by the individuals understanding of the situation. Importantly, the decision-maker evaluates one choice at a time. Generally, a decision-maker who lacks sufficient experience or acquired knowledge is unable to make such intuitive decisions. What is Creative Decision Making?Creativity concerns the ability to come up with something new. This includes the generation of new ideas or alternatives to address a problem. The five steps to creative decision making are as follows: |