Decision Making Process
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- Date Submitted: 11/30/2010 08:40 AM
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The rational model of decision making process in context
The rational decision making process is a cognitive process where each step follows in a logical order from the one before. The steps consist of identifying the problem which the decision to be made for, collecting analyzing and evaluating of information, finding solutions and alternatives, implementing the action, and get a feed back and evaluate if the objectives and goals are met.
The rational decision making process model could be influenced to be deviated from reality by many factors, but are mostly due to behavioral factors, organizational learning, and bias to previous experience and background. (Grame salaman, 2005).
The behavioral factors influence business strategies through a vantage point viewed from the decision maker’s limited standing point not from the direction relation objective to reality. Some of the behavioral factors are (wishful thinking, availability bias, and vividness). (Grame salaman, 2005: 41).
Wishful thinking occurs when the probability on an event is over estimated because it seems desirable to the decision maker, availability bias occurs when judgment of an event is recalled and based on the availability of past simulation of similar events, vividness enhances availability there for, events that have been experienced recently or described in colorful details tend to be likely to reoccur than they are in fact. For example: what happened to BMD (building Material Distribution Division). When the decision makers decided to launch a new strategy called the dual expansion plan without taking in consideration to gather efficient information and do the proper analysis form many points of view other than their own because the profit seemed desirable. (Grame salaman, 2005: 41).
Organizational learning is to assume that organizations go through the same processes of learning as do individual human beings seems unnecessarily naïve, but organization...
The rational decision making process is a cognitive process where each step follows in a logical order from the one before. The steps consist of identifying the problem which the decision to be made for, collecting analyzing and evaluating of information, finding solutions and alternatives, implementing the action, and get a feed back and evaluate if the objectives and goals are met.
The rational decision making process model could be influenced to be deviated from reality by many factors, but are mostly due to behavioral factors, organizational learning, and bias to previous experience and background. (Grame salaman, 2005).
The behavioral factors influence business strategies through a vantage point viewed from the decision maker’s limited standing point not from the direction relation objective to reality. Some of the behavioral factors are (wishful thinking, availability bias, and vividness). (Grame salaman, 2005: 41).
Wishful thinking occurs when the probability on an event is over estimated because it seems desirable to the decision maker, availability bias occurs when judgment of an event is recalled and based on the availability of past simulation of similar events, vividness enhances availability there for, events that have been experienced recently or described in colorful details tend to be likely to reoccur than they are in fact. For example: what happened to BMD (building Material Distribution Division). When the decision makers decided to launch a new strategy called the dual expansion plan without taking in consideration to gather efficient information and do the proper analysis form many points of view other than their own because the profit seemed desirable. (Grame salaman, 2005: 41).
Organizational learning is to assume that organizations go through the same processes of learning as do individual human beings seems unnecessarily naïve, but organization...