Second Year
Rational Decision-making -- Basic Information and Three Issues Undermining Its Effectiveness
Introduction
Rational decision-making plays a significant role in business (Schwartz et al, 2010). This essay will first give some basic information of this model. Then this article will focus on three issues that can undermine the effectiveness of rational decision-making and how to overcome them.
JURÁSOVÁ and ŠPAJDEL (2011) think that ‘rational decision-making is a tendency to make a normative decision’. To complete rational decision-making, managers should follow six steps, including identifying the problem, considering standards, weighting and analyzing alternatives, choosing the best option, finishing decision and giving feedback (Robbins et al, 2012, pp.60-63). There are also six assumptions of this model which consist of completely rational decision-makers, explicit problem, clear objectives, consistent view of criteria and weights, known alternatives and predictable results (Robbins et al, 2012, pp.64-65). The following text will analyze environmental munificence and dynamism, false-consensus effect and stereotype threat which affect rational decision-making and how to overcome these three issues.
Environmental munificence and dynamism
Magnanimous and dynamic environment always makes the problem unclear (Goll & Rasheed, 1997). Goll and Rasheed (1997) state that environmental munificence and dynamism not only influence even all stages of management such as tactic, structure and consequence, but also play a moderating role in the relationship between rational decision-making and business performance.
This paragraph will analyze three typical dynamic environmental factors and their impacts on rational decision-making, including rapidly developing technology and science, uncertain financial statement and changeable social values. Firstly, it is obvious that ‘over the past 25 years, the technique revolution has changed the way we work and play almost
Introduction
Rational decision-making plays a significant role in business (Schwartz et al, 2010). This essay will first give some basic information of this model. Then this article will focus on three issues that can undermine the effectiveness of rational decision-making and how to overcome them.
JURÁSOVÁ and ŠPAJDEL (2011) think that ‘rational decision-making is a tendency to make a normative decision’. To complete rational decision-making, managers should follow six steps, including identifying the problem, considering standards, weighting and analyzing alternatives, choosing the best option, finishing decision and giving feedback (Robbins et al, 2012, pp.60-63). There are also six assumptions of this model which consist of completely rational decision-makers, explicit problem, clear objectives, consistent view of criteria and weights, known alternatives and predictable results (Robbins et al, 2012, pp.64-65). The following text will analyze environmental munificence and dynamism, false-consensus effect and stereotype threat which affect rational decision-making and how to overcome these three issues.
Environmental munificence and dynamism
Magnanimous and dynamic environment always makes the problem unclear (Goll & Rasheed, 1997). Goll and Rasheed (1997) state that environmental munificence and dynamism not only influence even all stages of management such as tactic, structure and consequence, but also play a moderating role in the relationship between rational decision-making and business performance.
This paragraph will analyze three typical dynamic environmental factors and their impacts on rational decision-making, including rapidly developing technology and science, uncertain financial statement and changeable social values. Firstly, it is obvious that ‘over the past 25 years, the technique revolution has changed the way we work and play almost