Rational decision making

Examples of Rational decision making in the following topics:

• Rational Decision Making

  • Rational decision making is a multi-step process, from problem identification through solution, for making logically sound decisions.
  • Rational decision making is a multi-step process for making choices between alternatives.
  • The process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight.
  • The rational model of decision making assumes that people will make choices that maximize benefits and minimize any costs.
  • The rational-decision-making model does not consider factors that cannot be quantified, such as ethical concerns or the value of altruism.

• Non-Rational Decision Making

  • People frequently employ alternative, non-rational techniques in their decision making processes.
  • The rational model of decision making holds that people have complete information and can objectively evaluate alternatives to select the optimal choice.
  • The rationality of individuals is limited, however, by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make a decision.
  • Emotion is a factor that is typically left out of the rational model; however, it has been shown to have an influential role in the decision-making process.
  • Examine alternative perspectives on decision making, such as that of Herbert Simon and Gerd Gigerenzer, which outline non-rational decision-making factors

• Problems with the Rational Decision-Making Model

  • Critics of rational choice theory—or the rational model of decision-making—claim that this model makes unrealistic and over-simplified assumptions.
  • The more complex a decision, the greater the limits are to making completely rational choices.
  • Simon as a more holistic way of understanding decision-making.
  • Bounded rationality shares the view that decision-making is a fully rational process; however, it adds the condition that people act on the basis of limited information.
  • Summarize the inherent flaws and arguments against the rational model of decision-making within a business context

• How Emotion and Mood Influence Behavior

  • Emotions and mood can cloud judgment and reduce rationality in decision-making.
  • The decision-making effects of any kind of bad mood can hinder a person's job performance and lead to poor decisions that affect the company.
  • However, positive moods can also create false optimism and negatively influence decision making.
  • However, both positive and negative emotions can distort the validity of a decision.

• Cognitive Biases as a Barrier to Decision Making

  • Decision making is inherently a cognitive activity, the result of thinking that may be either rational or irrational (i.e., based on assumptions not supported by evidence).
  • Individual characteristics including personality and experience influence how people make decisions.
  • As such, an individual's predispositions can either be an obstacle or an enabler to the decision-making process.
  • Biases in how we think can be major obstacles in any decision-making process.
  • Biases distort and disrupt objective contemplation of an issue by introducing influences into the decision-making process that are separate from the decision itself.

• Leadership and Decision Making: The Vroom-Yetton-Jago Model

  • The Vroom-Yetton-Jago model is a contingency approach to group decision making that is designed specifically to help leaders select the best approach to making decisions.
  • Followers play no other role in the decision-making process.
  • The followers are involved in the decision, but the leader still makes the decision.
  • In a GII decision, leaders are not at liberty to make a decision on their own.
  • Are there technical or rational grounds for selecting among possible solutions?

• Evidence-Based Decision Making

  • The practice of evidence-based decision making involves using current information to make empirically supported decisions.
  • Evidence-based management entails making decisions and creating organizational practices that are informed by analyzing the best available data.
  • The practice of evidence-based decision making in management (often abbreviated as EBMgt) evolved from medicine and emphasizes a rational, objective, and empirical approach to addressing business issues.
  • The formal processes of EBMgt require managers and other decision makers to be disciplined and organized in their decision-making process.
  • Describe the concept and strategic implications of evidence-based decision making in management (EBMgt)

• Cognitive Biases

  • They and their colleagues demonstrated several replicable ways in which human judgments and decisions differ from rational choice theory.
  • The ways in which we distort our perception are particularly relevant for managers because they make many decisions, and deal with many people making assessments an judgments, on a daily basis.
  • This inappropriate confirmation allows for poor decision-making that ignores the true implications of new data.
  • Belief bias - Individuals often make a decision before they have all the facts.
  • In this situation, they believe that their confidence in their decision is founded on a rational and logical assessment of the facts when it is not.

• Defining Decision Making

  • Decision making is the mental process of selecting a course of action from a set of alternatives.
  • Decision making is the mental process of choosing from a set of alternatives.
  • While they are related, problem analysis and decision making are distinct activities.
  • Decision makers must gather and consider data before making a choice.
  • Analyzing a problem may not result in a decision, although the results are an important ingredient in all decision making.

• Advantages and Disadvantages of Group Decision Making

  • Group decision making (also known as collaborative decision making) is when individuals collectively make a choice from the alternatives before them.
  • Group decision making provides two advantages over decisions made by individuals: synergy and sharing of information.
  • When a group makes a decision collectively, its judgment can be keener than that of any of its members.
  • Moreover, group decisions can make it easier for members to deny personal responsibility and blame others for bad decisions.
  • One of the greatest inhibitors of effective group decision making is groupthink.