March’s four propositions argue the fact that in reality decision processes are “complicated, confused and erratic” (Open University, 2005:19) because:
• There are people with problems seeking solutions as well as people with pre-disposed possible solutions that eagerly await a situation where their “solutions” can fit a problem.
• Organisations and its management deal with many issues at one time.
• The importance and priority of issues are relative from day to day, are in constant flux and cannot be managed perfectly.
• Depending on the nature and amount of decisions to be made as well as who is present on different occassions, managers are faced with occasions of choice.
I will now discuss applicable theory to show why organisational decision-making is often erratic and unstructured in an attempt to support March’s propositions that the rational model does not best explain organisational decision-making.
In rational decision-making a number of well-defined steps have to be followed to arrive at the best decision, given the information processed in sequential steps. The rational model assumes a completely informed decision maker that:
• Knows all possible alternatives;
• Knows the impact and consequences of implementing each alternative;
• Has a logical sense of priorities or preferences for each alternative; and
• Has the ability to compare consequences and to determine final choice/s or preferred alternative.
However, the model of bounded rationality seems to oppose this perfect rationality in decision-making. According
References: Daft, R. L. (1982). Management, 4th ed. Orlando, Fl.: Harcourt Brace. March, J.G. (1988). Decisions and organisations, Basil Blackwell: Oxford. Simon, H.A. (1979). ‘Rational decision-making in business organisations’, American Economic Review, 69(4):493 The Open University. (2005). B713 Fundamentals of Senior Management: Block 1 The Context of Management, The Open University: Milton Keynes