I. Decision Maker and the Rational Man
As individuals we face decision situations everyday. It might be a problem or an opportunity, but in both cases the individual has to come at a perfect decision. At a rational view individual will try to gather as much information as possible on the available alternatives and the consequences they might derive by implementing each alternative. Individuals think and reason before they act and they try to select the best alternative accessible to them. What is most important is to select a choice among the alternatives available. Any person who is faced a significant choice problem in real life, operating individually or organizationally, tends to complete the task according to the prescription by the rational choice. In words, he will think as a rational man as depicted in a textbooks of economics. Rational man will be reasonably directed toward the achievement of conscious goals and will aim to maximize his benefits.
2. Literature Review
Decision making is a means to an end. It is typically described as “choosing among best alternatives”. According to Stoner et al. (2001: 239), decision making is the process of identifying and selecting a course of action to solve a specific problem. It is about identifying and choosing solutions that lead to a desired end result (Kreitner and Kinicki, 1995:299). The process begins with a problem and ends when a solution had been chosen. Decision maker is the individual or group that actually makes the choice among alternatives. Individual decision making is an important part of organizational behavior as well as in day to day life of any individual. Ideal decision makers try to use all their talents when making a decision and characterized by reason and sound judgment (Certo, 2003). Over the years, there has been much debate on how to accurately describe decision making processes in general. Beyond an implicit agreement that decisions are made through some sort of process, chaotic or otherwise, there is little else scholars agree upon.
By simple definition rational means efficient, i.e., maximizing output for a given input, or minimizing input for a given output. Economic definition of the rational man refers solely to a man who moves toward his goals in a way which, to the best of his knowledge, uses the least possible input of scarce resources per unit of valued output (Downs, 1957). Human behavior is goal-oriented, chosen for a reason. Goals, objectives, purposes, and interests explain behavior. So under rational man concept human being is always behave in a way to maximize the value he gains through the end.
Managerial decision making is assumed to be rational. That means managers make consistent, value–maximizing choices within specified constrains. So that is where the decision maker and rational man come together. The rational model of decision making which is also known as classical model is best used to discuss about the behavior of a manager who weight his options and calculate optimal levels of risks before making the decision. Rational decision making describes choices that are consistent and value maximizing within specified constraints (Robbins and Coulter, 2002:178). It assumes that managers have access to all the information needed to reach a decision (Certo, 2003).
The rational model proposes that managers use a rational, four-step sequence when making decisions: (1) identifying the problem, (2) generating alternative solutions, (3) selecting a solution, and (4) implementing and evaluating the solution (Kreitner and Kinicki, 1995:301). This model is based on the premise that managers optimize when they make decisions. A decision maker who is perfectly rational would be fully objective and logical (Robbins and Coulter, 2002:178). He or she will carefully define the problem and will have a defined goal which is clear and specific....