3 MODELS OF DECISION MAKING

3 MODELS OF DECISION MAKING

1. Selecting a course of action among alternatives

2. Rational Model

   • It is based on a sequential logic
     • on the ground that accumulates in the conscious
   • Characteristics
     • Includes
       • a broad definition of the problem
         • comprehensive data collection and analysis
           • a careful evaluation of alternatives
   • It is based on 3 explicit assumptions
     • All available information related to
       • the alternatives has been obtained
     • These alternatives can be classified
       • according to explicit criteria
     • The selected alternative provides the
       • maximum possible profit for the organization (or the decision makers)

3. Bounded Rationality Model

   • Describes the limitations of rationality and
     • highlights the decision making processes frequently used by people and teams
       • reflects individual or team tendencies to
         • Select a goal or alternative solution that is not the best
           • Conduct a limited search for alternative solutions
   • Characteristics
     • Consider the decision maker as an administrative person
     • Has a limited ability to process information
     • He doesn't always make the best decision because
       • for a lack of subsequent supervision
         • because he prefers satisfaction

4. Political Model

   • Useful for making unscheduled decisions
     • when conditions are uncertain
   • Characteristics
     • There is no unified actor, if not many actors
       • They act in pursuit of an inconsistent set of strategic objectives
         • The organization's decision is not unique
           • It is a summation of individual decisions