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Decision Making

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Introduction

As cited by Uhl-Bien, Schermerhorn, and Osborn (2015), decision making involves the

process of identifying problems and opportunities and choosing an alternate course of action

based on the identified issues and dealing with them successfully. Defining the problem in

question and generating alternatives to decide the preferred course of action forms the basic steps

in the decision-making process. The implementation of the decision and the evaluation of the

results are the final stages in the decision-making process. There are different models of decision

making, such as the classical models, behavioral models, and bounded rationality models, among

others. This essay is a review of the classical and behavioral models of decision making and an

analysis of a situation that warranted the use of optimizing decision making as well as the use of

satisficing decision making.

Classical and Behavioral Decision-Making models

According to Uhl-Bien, Schermerhorn, and Osborn (2015), the classical decision model

is an alternative model where optimum decisions identifying the absolute best choice after

analyzing all the possible alternatives and their consequences with full information. Based on

the classical decision theory, it is assumed that the decision-maker, such as the manager, faces a

clearly defined known problem. In that, all the possible courses of action alternatives are known

and their respective consequences. In this case, the manager chooses the alternative option that

offers the optimum solution for the identified problem. On the other hand, as illustrated by Saad

(2015), behavioral decision theory describes how managers or other individuals make decisions

rather than how they ought to have made decisions if they were conforming to axioms of rational

choice. In this decision-making model, intransitivity of preferences, the lexicographic rule, and
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the stopping strategies have been identified as the major defining factors when committing to a

certain decision choice.

Although decision making is one of the most central processes in organizations, the

classical model of decision making is derived from several assumptions, and the model has been

said not to provide an accurate account of how a particular decision was arrived at. In this theory

of decision making, the decision-maker is viewed as acting in the world of complete certainty,

which is not usually the case in the real world (Li, 2009).

Optimizing decision making

Optimizing decision doing works under the classical decision model where the optimum

decisions identify the best choice to use after analyzing all the possible alternatives and the

corresponding consequences (Uhl-Bien, Schermerhorn & Osborn, 2015). According to Sheikh

(2013), decision optimization deals with the maximization of the output from a large number of

input variables that exert their relative influence on the production.

In real-life situations, I have found myself in critical situations where making a decision

becomes unavoidable and have made optimizing decision to arrive at the best choice out of the

alternatives. In one of the cases, in my preceding years in college during the summer holidays, I

decided to join my relative who does a business of supplying beverages in several stores within

the locality. He makes a supply to more than 50 stores in a day, but on this particular day, he was

to make a supply to 100 stores as he had not done any supply in the previous day due to a

shortage of product from the manufacturer. In a typical working day with a supply to 50 stores,

he covers an average distance of 100 miles making supplies, but on this particular day, he had to

cover a distance of over 210 miles which was impractical based on the time that is taken to

offload the supply to various stores. I was faced with the task of advising my relative on the most
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efficient route that we were to take by minimizing the distance covered by the supply truck as

well as to cover most of the targeted stores.

Option one

In one of the route options, we were to cover over 300 miles if we were to supply all the

100 stores based on the sequence in which the orders were placed. In my analysis, this was not

practical as it could have taken over 24 hours factoring in the time taken to offload the beverages

crates to 100 stores.

Option Two

In this option, we were to cover an average of 150 miles, but in this case, we were to omit

the supply of about 20 stores that were located far apart. This option was far much easy as it

presented us with doing supply to 80 stores within a distance of 150 miles, which to me, sounded

more practical. The consequence of choosing this option was failing to supply to 20 stores with

beverages.

Option Three

The third and final option that arose was to cover a total of 120 miles to make supplies to

60 stores and then sub-contract another transporter to make supplies to the rest of the stores.

Best Choice of Option

Through my decision-making skills and factoring in the available information, I used

optimized decision making. I advised my relative to take the second option that presented the

most optimal route covering 150 miles but making a supply to 80 stores with a consequence of

failing to deliver to 20 stores. I opted for this option as it presented the most optimum solution to

the problem as the route was manageable based on the distance covered and the optimal number

of stores that were covered by the route. By the end of it all, we successfully made a supply to
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the 80 stores covering a total of 150 miles with a promise to deliver to the other 20 stores the

following day. This communication was communicated to the 20 stores and accepted.

Satisficing decision making

In satisficing decision making, people interpret and make sense of things based on the

context of their situations. In this method, a less than perfect solution is settled as the practical

information is limited. An example of a satisficing decision is where customers select a product

which is good enough for their use, but not perfect as it is satisfying to them. In a real-life

situation in my first year in college, my parents were faced with a decision to choose a business

software solution that was to be used in the management of our family business. They were

presented with varieties of software with different features and costs, some of them even with

supplemental features. Out of the many options that were available to procure the software from,

my parents decided to go for a single software system that did not have a room for expansion for

business future needs. They preferred this software as it presented them with the most affordable

prices in the market as well as free support for one year by the supplier. In this case, they did not

consider that this system did not have supplemental features and did not offer integration for

future business needs. This was an example of a satisficing decision making that was imposed on

the family business by my parents. As the business needs changes, the procured software might

need to be changed as it is limited in meeting emerging business needs.

Conclusion

Decision making is an essential tool in any organization, where else both classical and

behavioral decision-making models present various approaches to making decisions. Managers

need to adopt the most optimum solution, having considered the information and the resulting

consequences of the different alternate options. The environment that organizations work under
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are also major determining factors when making decisions as a manager might prefer to make an

optimizing decision, but the set budget does not allow securing a settling for a satisficing

decision making.
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References

Li, B. (2009). The classical model of decision making has been accepted as not providing an

accurate account of how people typically make decisions. International Journal of

Business and Management, 3(6). https://doi.org/10.5539/ijbm.v3n6p151

Saad, Gad. (2015). Behavioral Decision Theory. 10.1002/9781118785317

Sheikh, N. (2013). Defining analytics. Implementing Analytics, 3-20.

https://doi.org/10.1016/b978-0-12-401696-5.00001-3

.Uhl-Bien, M., Schermerhorn, J., & Osborn, R. (2015). Organizational Behavior, 13th Edition.

John Wiley & Sons.