The Rational Model

Proposes that managers use rational, four step sequences when making
decisions. Managers are completely objective and possess complete
information to make a decision. This model is criticized for being
unrealistic, but is instructive because it analytically breaks down the
decision making process and serves as a conceptual anchor for newer
models.
Stage 1 Rational Model
Identify the problem or opportunity and determining the actual situation
versus the desirable situation
--a problem exists when an actual situation and a desired situation differ
--an opportunity represents a situation in which there are possibilities to
do things that lead to results that exceed goals and expectations.
Stage 2 Rational Model
Generate alternative solutions--both the obvious and the creative.
Managers run into three decision-making blunders during this stage 1.
rushing into judgement 2. selecting readily available ideas or solutions
and 3. making poor allocation of resources to study alternative solutions.
Decision makers are advised to slow down when making decisions,
evaluate a broader set of alternatives and to invest in studying a great
number of potential solutions.
Stage 3 Rational Model
Evaluate alternatives and select a solution--ethics, feasibility and
effectiveness. Should consider the following when looking at
alternatives besides cost and quality:
1. is it ethical?
2. is it feasible (time issues, costs are high, resources limited etc it is not
feasible)
3. will it remove the causes and solve the problem.
Stage 4 Rational Model
Implement and Evaluate the solution chosen. If the solution is effective,
it should reduce the difference between the actual and desired states that
created the problem (if the gap is not closed, the solution
implementation was not successful, either the problem was incorrectly
identified or the solution was)
Optimizing
The rational model is based on the premises that managers do this when
they make decisions--this involves solving problems by producing the
best possible solution.
3 benefits of the Rational Model
1. The quality of decisions may be enhanced, in the sense that they
follow more logically from available knowledge and expertise.
2. It makes the reasoning behind a decision transparent and available to
scrutiny.
3. if made public, it discourages the decider from acting on suspect
considerations (such as personal advancement or avoiding bureaucratic
embarrassment)
Nonrational Models of Decision Making
Attempt to explain how decisions are actually made. They are based on
the assumption that decision making is uncertain, that decision makers
do not possess complete information and that it is difficult fr managers
to make optimal decisions. Include herbet simons normative model and
the garbage can model.
Simons normative model
The process of decision making is guided by a decision makers bounded
rationality.
Bounded rationality
Part of the normative model. The notion that decision makers are
"bounded" or restricted by a variety of constraints when making
decisions. The constraints include any personal characteristics or internal
(human/social capital)/external (employment levels, capital
availability)resources that reduce rational decision making. The
constraints of bounded rationality cause the decision maker to fail to
evaluate all potential alternatives causing them to satisfice