Group 4 1 Rational Decision Making Model

Rational Decision Making Model:

A decision-making model that describes how individuals should behave in order to maximize some outcome and when we consider Organizations, this model is used to take decisions more precisely and with least errors. The rational planning model is the process of realizing a problem, establishing and evaluating planning criteria, creating alternatives, implementing alternatives, and monitoring progress of the alternatives. It is used in designing neighborhoods, cities, and regions. The Six-Step Rational Decision-Making Model 1.Define the problem. 2.Identify decision criteria 3.Weight the criteria 4.Generate alternatives 5.Rate each alternative on each criterion 6.Compute the optimal decision

1.

Define the problem:-

The primary step is to define what really the problem is and which situation or a particular organizational issue is to be solved. This will help in approaching the further steps in a very sequential manner so that all further steps go according to this basic premise.

2.

Identify decision criteria

Once a decision maker has defined the problem, he or she needs to identify the decision criteria that will be important in solving the problem. In this step, the decision maker is determining whats relevant in making the decision. This step brings the decision makers interests, values, and personal preferences into the process. Identifying criteria is important because what one person thinks is relevant, another may not. 3. Weight the criteria

The decision-maker weights the previously identified criteria in order to give them correct priority in the decision. This helps us to determine which areas require more consideration which may result a heavy influence on future decision making.

Group 4 2 Rational Decision Making Model 4. Generate alternatives

The decision maker generates possible alternatives that could succeed in resolving the problem. No attempt is made in this step to appraise these alternatives, only to list them. Listing all the alternatives helps us to see what are the options before us so that it helps in a big way of determining relative alternatives. 5. Rate each alternative on each criterion

The decision maker must critically analyze and evaluate each one. The strengths and weakness of each alternative become evident as they are compared with the criteria and weights established in second and third steps. The score helps us to rank all the alternatives in a particular order. 6. Compute the optimal decision

Evaluating each alternative against the weighted criteria and selecting the alternative with the highest total score. This is the final step where the decision-maker makes the final decision to be taken & following the above process assures him/her that the chances of errors are minimal.

Group 4 3 Rational Decision Making Model

Deccan Aviation Pvt Limited:

1. Identify the problem:

They identify that they were facing losses because of the high Aviation turbine fuel. As they have to pay high charges to government to use airport facility.

2.

Establish decision Criteria:

As they were facing such huge losses they decided to sell the company to kingfisher Red which is a Giant company.

3.

Weight decision Criteria:

By taking this decision they will recover from the losses they were facing.

4.

Generate Alternatives:

They were having two alternatives either to sale to company or continue with re-planning and re-strategies.

5.

Evaluate the Alternatives:

They thought that it would require huge investment to overcome the losses with planning again.

6.

Choose the best Alternative:

The best alternative was to sale the company to the giant Kingfisher which was in lead at that time.

7.

Implement decision making:

Finally they sold the company as they were Unable to recover the company.

8.

Evaluate the Decision:

The decision was very good and kingfisher has developed kingfisher Red out of it.

Group 4 4 Rational Decision Making Model

Positive effect of rational decision making model:

This model type helps decision making in which choices are logical and consistent and maximize value. Managers would have clear and specific goal and know all possible alternatives and consequences.

Decision making rationally would consistently lead to selecting the alternative that maximizes the likelihood of achieving that goal. This can apply to personal as well as managerial. Decision can be made in the best interest of the organization.

The Disadvantages of RDM

Like any other management methodologies, there are also disadvantages associated with the rational decision making method. Expensive Process: There are so many alternatives used in pinpointing the end solution, hence the cost involved in verifying each option is normally very high. Each verification process involves using the costly resources, skills and business research methodologies. This six step model is quite expensive compared to other traditional decision making methods. Time Consuming Processes: Since the group of professionals are involved in making decisions, it is not easy to come with a single solution quickly. Each member tends to suggest his own ideas or solutions. Time consumption during the discussion and the verification process is really high in this method. Delays in Decision Making: There are too many critical values and data involved in analyzing the alternatives, hence the indefinite delays are common while using this decision making model. Conflicts among members also create delays and lead to slipped opportunities.

Our perception on rational decision making:

Rational decision making is a good method but it is a lengthy process. Sometimes it is effective and sometimes it is not. It depends upon the product or the company and what type of decision they have to take but rational decision making method does not consider any external environment while taking the decision which can affect their decision criteria. It can be the improper decision making process because if you will not consider any kind of external environment then you cant take any kind of appropriate decisions. External environment is must to be considered at the time of taking rational decision. The process of rational decision making is good at that time when we have to take some internal decision. Whenever the company has to take any urgent decisions in the company then they mostly use such kind of decision making process. As we all know that this kind of decisions mostly occur between the top management people or to some extent middle level people or in other words we can say that in this rational decision making process there are only 5 to 10 people participate and this is the close kind of decision. This kind of decisions creates question in the mind of peer level staff and even in the mind of lower level people. It also effects the behavior and motivational level of the people as the others think that why they didnt consider us in their decision making process. While the rational planning model was innovative at its conception, the concepts are controversial and questionable processes today. The rational planning model has fallen out of mass use as of the last decade