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Rational Decision Making

By wingnambeta Mar 25, 2012 674 Words
Globalism is the term that has been mentioned in the field of business nowadays. There are a lot new developments and techniques are introduced to organizations. This creates different problems to the managers. A decision-making is a key to the survival to an organization. Mangers are needed to make sure the organization to modernize and making improvement in order to achieve the goals. Decisions are important in both managerial and organizational actions. Mangers need to consider about the uncertain environment and have to critically make decisions on new business opportunities, products, customers, suppliers, markets and developments. This will need the ability to make the right decision. According to the businessdictionary, the definition of rational decision-making is “A method for systematically selecting among possible choices that is based on reason and facts. In a rational decision making process, a business manager will often employ a series of analytical steps to review relevant facts, observations and possible outcomes before choosing a particular course of action.” (

A rational decision making process is defined as steps as setting the objectives, understand problem, determine options, evaluate problems, and finally making a choice. The rational means using logical and order to decision making. The rational decision-making contains different steps, the process of the problem, understand the opportunity and ending it with actions.

The first step is to understand the problem or look for an opportunity. It is not easy to find out and define the problem. When the manager is defining the problem, it has to identify critically or strategically the problem. Once the problem has found out, it can be solved easily and so for the first step it is so important to understand the problem. The second step is to understand the problem. The decision maker needs to find out what will be relating to the problem. The third step is to determine options. Once understood the options, it will need to analyse and find out what would be the outcome and work out what could be the choice. Evaluate problems would the next step to summarise the previous finings. Finally making a choice.

According to Macmullian, strategic choice is described as “the third logical element of the strategy formulation process. Choice is at the centre of strategy formulation. If there are no choice to be made, there can be little value in thinking about strategy at all. On the other hand, there will be always, in practice be limts on the range of possible choices.” Managers in organizations may find their choice limited as the choices are made at a higher level. Even managers are free to make strategic choices, the result maybe depend on a chance and opportunity on the deliberate choices. When looking in to a future strategies, it could be there are more clear choices to be made. It is important that considering a choice, it is necessary to take a perspective view. It is difficult to recognize all the possible options with equally clarity or at the same time. New opportunity can be bring out by unexpected events and destroy the foreseen opportunity or find a balance between the advantages and the opportunities. Good strategic choices can be challenging enough to keep ahead of the competitors but it needs to be reach the target. Analysis is a main element to make strategic choice but the judgement and skill are needed to be analytical. Sometimes it maybe better to delay making a choice when the wrong decisions are better than no decision. Strategic choices can keep options to be preferable to the uncertain future.

Macmillan states that “the choice and the strategy choice refer to the process of selecting one option for implantation.” An option is the action that it is possibly chosen. It can be choosing the option or not to choose the option. There are possibilities on the options to choose from. A strategic option is choice from related options that will form a potential strategy.


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