MODELS OF DECISION MAKING PROCESS Ever Every y mana manage gerr has has to tak take deci decisi sion on on time time to time time.. Ther There e are are thr three sugg su gges este ted d mode models ls of the the deci decisi sion on maki making ng proc proces ess s whic which h will will help help to unde unders rsta tand nd how how deci decisi sion ons s are are made made and and sh shou ould ld be made made.. Thes These e thr three models are: (I) the econologic model, or the economic man, () the bounded rationality model or the administrative man! and (") the implicit favourite model or the gameman. Each model di#ers on the assumptions it makes about the person or persons making the decision.
Econologic Model or Economic Man Model The econologic model represents represents the earliest attempt to model decision process. This model is based on two assumptions: ($) It assumes people% are economically rational! and () that %people attempt to ma&imise outcomes in an orderly and se'uential process. Economic rationality assumed that people will select that alternative which gives him the greatest advatage. It is also assumed that they go about this search in a planned, orderly, and logical manner. basic econologic decision model is shown in igure . It consist of seven steps of rational decision* making process
The orderly steps steps in the decision process process are $ +iscover the symptoms of the problem or diculty! +etermine the goal to be achieved or de-ne the problem to be solved! " +evelop a criterion against which alternative solutions can be evaluated! Identify all alternative courses of action!
/ 0onsider the conse'uences of each alternatives as well as the likelihood of occurrence of each! 1 0hoose the best alternative by, comparing the conse'uences of each 2 ct or implement the decision. This model lacks realism. The 2 steps prescrie how decisions s!o"ld be made. They do not ade'uately portray how decisions are actually made. 3hen we look closely into this prescriptive model, we -nd many of its assumptions about the capabilities of man are unrealistic. or e&le, a man does not have enough capacity to $. . ". . /.
gather all necessary information for a decision, mentally store this information in some stable form, accurately recall any information at any time he likes! do a series of comple& calculations rank all conse'uences on the basis of their merits.
4oreover, a man5s loyalty to his organisation is also not always high. 6is personal motives and motives of others, interface with his organiasation* decisions. Thus fully rational decision*making is an infre'uent decision mode e&cept when it relates to the performance of technical tasks. 4anagement decisions in all other areas can be made fully rational by computers only.
#o"nded Rationality Model or Administrati$e Man Model more realistic description of decision making behaviour is based on the administrative man model developed by 6erbert 7imon. This model uses only limited rationality in his decisions because his information processing skills are limited. It is therefore known as bounded rationality model. It assumes that people, while they may seek the best solution, usually settle for much less because the decisions they confront typically demand greater information processing capabilities than they possess. The decision making behavior of man may be summari8ed as follows
%& Se'"ential attention to alternati$e sol"tions( Instead of identifying all possible solutions and selecting the best, the various alternatives are identi-ed and evaluated one at a time. If the -rst solution fails to work it is discarded and the ne&t solution is considered. 3hen an acceptable solution is found, the search is discontinued. The 9 + department of an enterprise is perhaps the only e&ception which continues search for still better solutions. )& *se o+ !e"ristics( heuristic is a rule which guides the search for alternatives into areas that have a high probability for yielding satisfactory solutions in past. 6e uses heuristics to reduce the area of search to manageable limits.
,& Satis+ying( 3hereas the econologic model focuses on the decision maker as an optimiser, this model sees him or her as a satis-cer. n alternative is optimal if: ($) there e&ists a set% of criteria that permits all alternatives to be compared! and () the alternative in 'uestion is preferred, by these criteria, to all other alternatives. n alternative is satisfactory if: (I) there e&ists a set of criteria that describes minimally satisfactory . alternatives! and () the alternative in 'uestion meets or e&ceeds all these criteria. ;ased on these three assumptions about decision makers, this model involves the following < steps in the decision making process.
$. 7et the goal to be pursued or de-ne the problem to be solved. . Establish appropriate criteria to =udge the acceptability of a solution ". >se heuristics to narrow down the -eld of search and identify a feasible solution . If no feasible alternative is identi-ed, then lower the criteria to =udge the acceptability of a solution and begin the search again for a new alternative solution (repeat steps and "). /. If a feasible solution is identi-ed, evaluate it to determine its acceptability. 1. If the solution is unacceptable, initiate search for a new alternative solution (repeat steps "*/). 2. If the solution is acceptable, implement it. <. ollowing implementation, evaluate the ease with which goal was (or was not) attained and raise or lower level of aspiration accordingly on future decisions of this type. In this model, we look for a solution that is acceptable. The search behaviour is se'uential in nature. inally, in contrast to the. prescriptive econologic model, it is claimed that the
bounded rationality model is descripti$e- that is it describes how decision makers actually arrive at the identi-cation of solutions to organisational problems. iii. Implicit Fa$o"rite Model or Gamesman Model This model deals primarily with non*programmed. decisions. ?ou will recall that non*programmed decisions are decisions that are novel or unstructured, like seeking one%s -rst =ob. @rogrammed decisions, in contrast, are more routine or repetitious in nature, like the procedures for admitting students to a secondary school. The implicit favourite model developed by 7oelberg ($A12) emerged when he observed the =ob choice process of graduating business students and noted that, in many cases, the students identi-ed implicit! favourites very early in the recruiting and choice process. 6owever, they continued their search for additional alternatives and 'uickly selected the best alternative candidate, known as the con-rmation candidate. Be&t, the students attempted to develop decision rules the demonstrated une'uivocally that the implicit favourite was superior to the alternative con-rmation candidate. This was done through perceptual distortion of information about the two alternatives and through weighing systems designed to highlight the positive features of the implicit favourite. inally, after a decision rule was derived that clearly favoured the implicit favourite, the decision was announced. ironically, 7oelberg noted that the implicit favourite was typically superior to the con-rmation candidate on only or or two dimensions. Even so, the decision makers generally characterised their decision rules as being multi*dimensional in nature. The process is shown in igure CII. s noted, the entire process is designed to =ustify to the individual, through the guise of scienti-c rigour, a non*programmed decision that has already been made in intuitive fashion. ;y doing so, the individual becomes convinced that he or she is acting in a rational fashion and making a logical, reasoned decision on an important topic.
