The decision is to select an action among a number of actions that solves a given problem, that prevents a problem from happening, or that forces to apply new ideas for development. The need for understanding decision making process is increasing because the complexity of modern organizations is increasing, and because the modern organizations' effectiveness depends on the decisions made by the managers. The question is how to select the most appropriate action to solve the problem satisfying all stakeholders.
Many methods have been developed to simplify the decision making process. In this paper, the rational model of decision making will be discussed first. Then, some of the factors that cause deviation in the rational model will be clarified.
Rational Model of Decision Making Process
The reason of discussing this model of decision making process first is because this model is considered the ideal method of making decisions for the organizations. It assumes that individuals usually maximize entrepreneurs, and that the decisions are accomplished by a step-by-step procedure which is both logical and linear. To make a decision according to this model, it is necessary to start from the beginning by collecting all related information . Then, this information has to be analyzed and then all solutions are suggested. These solutions are then analyzed and all of the negative and positive outcomes of each of them are considered according to criteria for comparing these solutions to finish with the best decision.
The rational model does not put any limits for time or cost needed to reach the ultimate goal. Its main purpose is to come up with a decision that would maximize the profit, and that would comply other predefined goals. Also, the model considers the organizations as machines to achieve the goals, and the process is one step in a linear process without the existence of constraints.
The difficulties that were accompanied with this approach led to deviation from the rational model. Complexity of modern organizations and the limited cognitive ability of decision makers were most influencing factors in the deviation . The decision makers were unable to operate under perfect rationality conditions. The information about a decision was mostly unavailable or unclear, and open to different interpretations. Also, the criteria of evaluating alternative solutions were not agreed upon. It also required very long time and a lot of energy of the decision makers to pursue a maximizing outcome. These constrains led to a conclusion that the absolute rational model is unreachable.
Simon presented the bounded rationality as a result of human and organization constraints. He sees that the managers would not achieve the requirements of rational behavior. He observed that different types of decisions can be processed in different ways, namely: programmed decisions and non-programmed decisions. The programmed decisions category included...