A Analysis of Rational Decision Making Model

Topics: Decision making, Decision theory, Decision engineering Pages: 26 (9334 words) Published: November 19, 2010
Decision Making
Hamed Armesh*

In this article we have tried to define and make good and comprehensive explanations of decision making process in different situation. because of decision making importance in business we have tried to take a deep look different subjects that are direct and indirectly related to decision making so as we know decision making is the process of selecting a logical choice from among the available options to do that we need to evaluate, analyze and determine which alternative will be suited for our case of actions.

1.

Introduction

By definition decision making is: The process of selecting a logical choice from among the available options. When trying to make a good decision, a person must weight the positives and negatives of each option, and consider all the alternatives. For effective decision making, a person must be able to forecast the outcome of each option as well, and based on all these items, determine which option is the best for that particular situation. [James Reason 1990]. Human performance in decision making terms has been the subject of active research from several perspectives. From a psychological perspective, it is necessary to examine individual decisions in the context of a set of needs, preferences an individual has and values they seek. From a cognitive perspective, the decision making process must be regarded as a continuous process integrated in the interaction with the environment. From a normative perspective, the analysis of individual decisions is concerned with the logic of decision making and rationality and the invariant choice it leads to.[Daniel Kahneman, Amos Tversky2000] The ability to make wise, educated decisions is essential to living a successful and fulfilled life. Individuals, groups or teams make decisions every day. Some decisions are very important and affect a lot of people whereas other decisions are small and affect only one or two people. A decision-making process based on data leads to good decisions. A major concern in management has been to understand and improve decision making. [Isabel Briggs Myers|Myers, I. 1962] _____________________________ * Hamed Armesh, DBA student, Multimedia University Malysia

There have been two approaches to management decision making [Huber, 1980]. The first is concerned with development and application of normative decision rules based on formal logic derived from economics or statistics. The second involves descriptive accounts of how people actually go about making judgments, decisions, and choices. [Isabel Briggs Myers|Myers, I. (1962)] Decision making can usually be improved by breaking a problem into parts, working on the parts separately, and then combining them to make a final decision. It has been shown in a variety of works that business decision making environment is a unity of decision makers’ experience, beliefs and perceptions on one side, and decision support tools and techniques – on the other side. In making important decisions, any information sources that contain relevant important information are going to be accessed and used. In this paper we are going to show decision making process, models, and types. And explain how we can make strategic decisions in different situations. In fact making decision in management has a significant role as Peter Drucker says 90 percent of activities in management is decision making, so we are going to discuss this important subject to show different aspect of it and find new ideas in this area of research. In this paper we consider and evaluate some issues as follow:

2. Decision Making Process and Steps
Decision making is the process of generating and evaluating alternatives and making choices among them. Is it always best to strive for optimal decisions? Probably not, shooting for perfect solutions can freeze decision makers into inaction. They become so afraid of not making the perfect decision that they create. When gathering data and...

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