Decision Making

Topics: Decision making, Decision theory, Cognition Pages: 4 (1187 words) Published: March 28, 2013
Decision making from cognitive or normative perspective can be defined as the process of selecting best logical choice from various available options and choices. Majority of decisions in business are normative as they are based on logical decision making. Dr. Yost describes decision making as a concept on a continuum of conscientiousness and depth of deliberations. On one end of spectrum is conscious, well thought of, rational decision making, in between “real world” bounded rationality and at the extreme other end, unconscious, without inference and or use of reason, intuition. Organizations should use the best available rational decision making process routinely under ordinary circumstance but one should be more conscientious, if potential impact of poor decision is known. One bad decision can impact whole organization, and with it future of employees, stock holders and community as a whole. Rational decision making results in “maximum payoff”. Rational decision making results in high quality decision outcome. It is based on facts and figures. Involves accurate identity of problem and limiting factors, allocates appropriate weightage to criteria, develops, analyzes and selects best alternatives (brainstorming by Nominal group or Delphi technique). Decision is implemented with established controls for evaluation. Rational decision is devoid of any bias and not affectively charged. For cost-benefit trade off rational decision making provides best expected outcome (Yost, 2013). Intuition is not rational as it is unconscious and not based on logical decision making. Intuition is without, inference and or use of reasoning. When talking about intuition we are describing something that is known, perceived, understood or believed by instinct, feelings or nature without actual evidence, rather than by use of conscious thought, reason, or rational processes. This does not imply that intuitive decision making is irrational. Instead, we mean that the explanation for a...

References: Burke, L. and Miller, M. (1999) Taking the mystery out of intuitive decision making. Academy of Management Executive, 13 (4).
Klein, G. (2004) The power of intuition. Retrieved on March 25, 2013 from http://www.decision-making-solutions.com/intuitive_decision_making.html
(2012) Logical vs. intuition. Retrieved March 25, 2013 from http://capone.mtsu.edu/studskl/hd/LRBrain.html#Logical.
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