Organizational Behavior
THE FOUR DECISION-MAKING MODELS 1. • The Rational Decision model of decision-making The assumption is made that participants have agreed in advance that making a decision is the right process to follow and that the rules and language of decision making are understood by all. The rational model aims at making optimal decisions on the basis of careful evaluation of alternative courses of action. One major assumption is that the rational approach provides ‘one best way’ to reach decisions. However the advocates of the rational approach pay little heed to the organisational context of decision making. Treat such techniques as one input into a process, which is influenced by the preferences and interests of key organisational participants.
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The Rational model assumes: • • • • • • The outcome will be completely rational The decision maker has a consistent set of preferences The decision maker is aware of all the possible alternatives The decision maker can calculate the probability of success for each alternative The decision maker strives to optimise – to select the best possible alternative The Rational model is unrealistic: due to time constraints, limits to human knowledge and information-processing capabilities, managers preferences and needs change often
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The Bureaucratic or Administrative model of decision making This model is based on the actual behaviour of decision makers. There are cognitive or mental limits to human rationality. These limits on the individual means that decision making is governed by bounded rationality. Sub-optimal efforts to make decisions in everyday life result from the influence of nonrational, emotional and unconscious elements in human thinking and behaviour. For example, poor work habits, limited skills, pressure of time. Group pressure also limits optimal behaviour central to rational decision making.
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OB Lecturer: Michael P A Tan
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The Bureaucratic model assumes: • • • • Managers
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The Rational model assumes: • • • • • • The outcome will be completely rational The decision maker has a consistent set of preferences The decision maker is aware of all the possible alternatives The decision maker can calculate the probability of success for each alternative The decision maker strives to optimise – to select the best possible alternative The Rational model is unrealistic: due to time constraints, limits to human knowledge and information-processing capabilities, managers preferences and needs change often
2. • •
The Bureaucratic or Administrative model of decision making This model is based on the actual behaviour of decision makers. There are cognitive or mental limits to human rationality. These limits on the individual means that decision making is governed by bounded rationality. Sub-optimal efforts to make decisions in everyday life result from the influence of nonrational, emotional and unconscious elements in human thinking and behaviour. For example, poor work habits, limited skills, pressure of time. Group pressure also limits optimal behaviour central to rational decision making.
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OB Lecturer: Michael P A Tan
Page 1
The Bureaucratic model assumes: • • • • Managers