Rational Decision Making in the Pharmaceutical Industry

Topics: Decision making, Risk, Flipism Pages: 6 (2075 words) Published: March 18, 2011
Decision making may be regarded as the voluntary choice between the viable available options using judgement so as to reach agreement on a course of action. This is central to the organization; it underpins and directs organizational activity leading inevitably to its successes or failures. Of key importance to decision making is the relevance of or lack there of, of rationality. The question however to be asked in order to answer this question is what is meant by “rational” and how can one substantiate that decisions made does follow the rational ideal or not. One must also ask why would organizations choose or be forced to take decision choices other than what is evidently rational or logical. In the exploration of why decision makers may strive to make rational decision and not do so in practice, this paper will explore whether in fact rationality is the effort of the decisions makers or how much the ends and decisions taken reflect a neutral undetached system as well as the many organizational structures and shared values, personal styles or cognitive systems therein.

Firstly, rationality in decision making is at the heart of the modern organization according to Weber. Rationality may be formal as concerned more with the appearance and less with reality as it is based on calculations and the language of presentation of information in decision making and organizational processes. Decision making processes may be presented with information which leads to ‘formally’ rational decisions based on the language of the information presented for the decision makers presented and the language in which it was presented for example accountancy jargon or statistics or the CIA representatives ‘dressed up’ presentation of the Cuban Invasion plan (Chap. 1 Reader). Decisions are also rationally lead by ‘substantive’ means as it is concerned with one aspect of the information presented or among the options available. This may be for a number or reasons, whether political, economic, ethical, utilitarian, the attainment of social equality or distinction or otherwise. This kind of rational is not simply measured in terms of calculations but may also be lead by the values associated or to the contents of the particular ends with which it is associated. Substantive rationality according to Weber ‘refers to the appropriateness of means to the achievement of chosen ends – i.e. the degree to which ‘methods are, among those available, technically the most nearly adequate’ and refers also ‘to the nature, even the rationality of the ends themselves’ (Intro to Reader, p4). The notion of rational decision making is belief and theory lead with reference to the epoch of that decision. The appropriateness of means or the choice of ends themselves is both lead by the values and cultural distinctions. No end or means of attainment is more rational than another but is primarily value-based on the prevailing organizational structure and prevailing local or cultural belief systems.

Decision making does not always follow the rational ideal for many reasons ranging from personal leadership style and individual qualities to groups (decision making body) as a whole. Groupthink hypothesis is an essential explanatory tool in explaining why certain decisions taken may not always follow the rational model based on aspects of the decision making body itself. ‘According to the groupthink hypothesis, members of any small cohesive group tends to maintain esprit de corps by unconsciously developing a number of shared values and related norms that interfere with critical thinking and reality testing’ (Janis,(1972) 2002). The illusions of invulnerability, unlimited confidence and confidence in a leader are all symptoms of groupthink which leads to decisions that may seem otherwise illogical. Decision making which is affected by the effects of groupthink leads to decisions being taken once it is agreed by all in the group that what is being decided is the right thing...
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