RATIONAL DECISION MAKING:by Charles Roland M. Queroda

RATIONAL DECISION MAKING
THE NATURE OF MANAGERIAL DECISION MAKING:
Decision making- a the process through which managers identify organizatinal problem and attempt to resolved them.
3 types of problem:
1. Crisis problem- is a serious difficulty requiring immediate action.
2. Non-crisis problem- is an issue that requires resolution, but does not simultaneously have the importance and immediacy characteristic of crisis.
3. Opportunity problem- is a situation that offers a strong potential for significant organizational gain if appropriate actions are taken.
MODELS OF DECISION MAKING :
Rational Model- managers are engage an completely rational decision process, ultimate make optima decisions.
- Is flawed in that it does not apply to actual decision.
Rational Model Step by Step:
Step 1. Idetifying a problem.
Problem-is defined as a discrepancy bet. An existing and a desired atste of affairs .
Step 2.Idetifying the decision criteria.
Decision Criteria-are that define what is relevant and important in making a decision.
Step 3.allocating weights to criteria.
Step 4.Involves developing alternatives.
Step 5.Analyzing alternatives.
Step 6.Involves selecting an alternatives.
Step 7.Choosing a course of action and implementing the alternative.
Step 8.Involves evaluating the effectiveness.
NATURE AND TYPES OF MANAGERIAL DECISIONS
Programmed Decisions - are those made in routine, repetitive, well-structured situations through the use of predetermined decision rules.
Non-Programmed Decisions – Are thoe for which predetermined decision rules are impractical because the situations are novel and ill-structured.
TYPES OF PROBLEMS AND DECIONS USED:
1.Well-structured Problems- are straightforward, familiar and easily defined.
Managers can used PROGRAM DECISION,-which is repetitive decision that can be handled by a routine approach.3 posible Program Decision:
1.Procedure- is a series of interrelated sequential steps that can be used to respond to a structured problem.
2.Rule- is an implicit statement that tells managers what they ought or ought not to do.
3.Policy- is a guide that establishes parameter for making decisions rather than spcifically stating what should or should not be done.
2.Poorly structured problems-are new or unusual problem in which information is ambiguous or incomplete.These problems are best handled by a NON-PROGRAMMED DECISION that is a unique decision that requires a custom-made solution.
GENERAL ORGANIZATIONAL SITUATIONS:
1.At the higher level of the organization, managers are dealing with poorly structured problems and using non-programmed decision.
2.At lower level,managers are dealing with well-structured problems by using programmed decisions.
Assumptions of Rationality- is that decision are made in in the best economic interest of the organization not in the manager interests.



DECISION MAKING STYLES
2 DIMENSIONS IN THE WAY THEY APPROACH DECISION MAKING:
1.Individual’s way of thinking(rational or intuitive)
2.Individual’s tolerance for ambiguity(low or high)
4 Diffirent Decision-Making Styles
1.Directive Style- is one that characterizws by low tolerance for ambiguity and rational way of thinking.
2.Conceptual Style-is one characterized by an intuitive way of thinking and high tolerance for ambiguity.
3.Analytic Style-Is one characterized by high tolerance for ambiguity and a rational way of thinking.
4.Behavioral Style- IS one characterizes by low tolerance for ambiguity and an intuitive way of thinking.