The Rational

Decision-Making Process

The Rational Decision

Process
1.
2.
3.
4.

Four stages:
Problem Identification
Criteria Definition
Alternative Generation and
Evaluation
Implementation

The Rational Decision

Process
This model assumes that the
optimizing decision maker is rational.
That is, an individual who makes
consistent, value-maximizing choices
within specific constraints.
When we look at this model keep in
mind that the final (decision-making
step before implementation) requires
computing the optimal decision based
on an evaluation of the alternatives.

The Rational Decision

Process
Also referred to as The Methodical
Approach
Or
Traditional Problem Solving Model

The Model
Formulating the problem (which
involves its detection,
identification and definition
Interpreting the problem
Constructing course of action
Decision-making
Implementation

Expansion of the Model

1. Formulating the problem - the

way a problem is identified and
defined will determine the actions
that we decide to take to solve a
problem

Expansion of the Model

2. Interpreting the problem - the

opportunity to find an effective
solution to a problem is highest
when we develop a thorough
understanding of the problem.

Expansion of the Model

2. Interpreting the problem a). Understand the facts and place the facts
into proper relationship with each other.
b). A great deal of analytical thinking may
be required to identify the essential facts
and analyze the relationship between them.

Expansion of the Model

2. Interpreting the problem Therefore, this stage is referred to as
interpretation because the problem
solver has to go through a process of
explaining and interpreting the available
information about the problem situation
before gaining a complete
understanding.

Expansion of the Model

3. Constructing courses of action - is

a creative process which includes
collecting ideas, generating ideas.

Expansion of the Model

Constructing courses of action This stage is one that problem

solvers tend to jump into right
away. Because of this they often
fail to solve the problem because
they have not taken proper care to
define or diagnose the problem.

Expansion of the Model

4. Decision-making - entails
evaluating the proposed courses of
action against the relevant criteria.

Expansion of the Model

Decision-making
- Involves some risk taking because of
the uncertainty of the outcome of
events based on ones judgment to
implement.
- Part of decision-making is coming to
terms with the fact that we have to
act on our judgments.

Expansion of the Model

5. Implementation making a
decision to act is not
Implementation. Implementation
requires a plan of action based on
our cumulative work of the earlier
stages.

Expansion of the Model

Implementation

Implementation of a plan must be

carefully executed especially when
the implementation affects other
individuals.
If others are involved, some care
may be required to help them adjust
to the changes that will take place.

Assumptions
The Rational Decision-Making
Model contains a number of
assumptions.
1. Problem clarity the problem is
clear and unambiguous. The
decision maker is assumed to
have complete information
regarding the decision situation.

Assumptions

2. Known options it is assumed

that the decision maker can
identify all the relevant criteria
and can list all the viable
alternatives. Further, the decision
maker is aware of all the possible
consequences of each
alternative.

Assumptions

3. Clear preferences Rationality

assumes that the criteria and
alternatives can be ranked and
weighted to reflect their
importance.

Assumptions

4. Constant preferences It is
assumed that the specific
decision criteria are constant and
that the weights assigned to
them are stable over time.

Assumptions

5. No time or cost constraints The

rational decision maker can
obtain full information about
criteria and alternatives because
it is assumed that there are no
time or cost constraints.

Assumptions

6. Maximum payoff The rational

decision maker will choose the
alternative that yields the highest
perceived value.

Creativity
The rational decision maker needs
creativity to produce novel and
useful ideas.