RATIONAL DECISION MAKING MODEL

1. RECOGNIZE, DEFINE

PROBLEM
OPPORTUNITY

RATIONAL DECISION MAKING MODEL

GATHER RELEVANT INFO

DIAGNOSE CAUSE(S)
ASSUMPTIONS!
BE AWARE OF THEM UNDERSTAND THEM

REARRANGE NEW DOOR TO MAKE ONE WORD.

IN WHAT ORDER ARE THESE NUMBERS?

854917632

PROBLEMS WITH DEFINING PROBLEM

TASK INSTRUCTIONS PERCEPTIONS EXPERIENCE MENTAL SETS JUDGEMENTAL

PROBLEMS WITH DEFINING PROBLEM(CONTD)

SOLUTION MINDED NOT ENOUGH INFORMATION NOT ENOUGH TIME CONFUSING PROBLEM AND CAUSE(S) INITIAL SUCCESS/FAILURE

PROBLEMS WITH DEFINING PROBLEM(CONTD)

LIMITED/BOUNDED RATIONALITY
LIMITED CAPACITY/CAPABILITY SATISFICING SEQUENTIAL ATTENTION BARGAINING
BEHAVIORAL MODEL

RATIONAL DECISION MAKING MODEL

2. DEVELOP ALTERNATIVES 3. EVALUATE ALTERNATIVES UNDERSTAND CONSEQUENCES

RATIONAL DECISION MAKING MODEL

4. CHOOSE (DECIDE) 5. IMPLEMENT

6. EVALUATE, CONTROL

TYPES OF DECISIONS
PROGRAMMED
REPETITIVE ROUTINE HANDLED WITH DEFINITE APPROACH

TYPES OF DECISIONS
NON-PROGRAMMED
UNIQUE NONRECURRING HANDLED WITH CUSTOM RESPONSE

DECISION CONDITIONS
CERTAINTY
100% SURE

RISK
REASONABLE ESTIMATE OF PROBABILITY

UNCERTAINTY
CANNOT EVEN ESTIMATE PROBABILITY

DECISION MAKING STYLES

DELIBERATE/RATIONAL

IMPULSIVE

DECISION MAKING TECHNIQUES

INDIVIDUAL

GROUP
BRAINSTORMING NOMINAL DELPHI

FOCUS
STRATEGIC

OPERATING
TACTICAL

TOOLS
MARGINAL ANALYSIS COST-BENEFIT EXPERIENCE EXPERIMENTATION

TOOLS
MATHEMATICAL MODELS

DECISION TREE
CHARTS

SETTING PRIORITIES URGENT

NOT URGENT

IMPORTANT

II

NOT IMPORTANT

III

IV

WE SELDOME HAVE TIME FOR THE IMPORTANT BECAUSE WE ARE WORKING ON THE IMMEDIATE AND THE IMMEDIATE IS SELDOM THE IMPORTANT
- Peter Drucker