Businesses of all sizes have to make many decisions; some are fairly simple and routine, whilst others are more complex and require important management time and effort. The largest effort of organizations is making decisions and solving problems. It is work of choosing issues that require attention, setting goals, finding or designing suitable courses of action, these are called problem solving and evaluating and choosing among alternative actions is usually called decision making.
Understanding decision making is crucial, the one can be in wonder; why the successful intelligent managers who genuinely and seriously want to make the right decision, so often make the wrong one and may cause disastrous consequences? This essay will illustrate why the ideal decision-making process is unrealistic through mentioning the classical rational model and the approaches that deviate from this model such as groupthink and behavioral perspective with suitable examples.
Decision-making is the act or process of choosing one course of action from among several alternatives. Decision-making is the process of sufficiently reducing uncertainty and doubt about alternatives to allow a reasonable choice to be made along with them.
This definition stresses the information gathering function of decision-making. It should be noted here that uncertainty is reduced rather than eliminated. Very few decisions are made with absolute certainty because complete knowledge about all the alternatives is seldom possible.
Thus, every decision involves a certain amount of risk. The classical rational model is attributing to the kind of rational thinking logical and methodical steps, which mirror the perfect way to be the suitable stages of an efficient process.
Rational model criticized from different commentators that it has lots of limitations. According to the rational model of decision making it follows a certain steps: define the problem, gathering information, identify alternatives, evaluate alternatives, chose the best alternative and implement it.
However, in reality, decision-makers face uncertainties when they follow these steps:
Hence, it is very important that the definition of the problem is the same among all group members. Only then is it possible for the group members to find alternate sources or problem solving in an effective manner.
Evaluation for the information and for the possible options is a need to anticipate the consequences of each and every possible alternative. At this point of time, it is necessary to think over for optional criteria on which will measure the success or failure of the decision taken. However, both information and alternatives are constrained because time and effort to gain information or identify alternatives are limited or maybe the information collected is not sufficient or not correct then the followed decision will be wrong.
For example: in The Bay of Pigs Kennedy administration, the president and his senior advisers failed in gathering the right and accurate information about Castro regime, their information might be unavailable or incomplete. The Cuban air force is so unaffected, that cannot be knocked easily before the invasion as Kennedy Administration thoughts it is ineffectual. The Cuban air force shot and damaged half of the American B-26s. In addition, Kennedy and his superior’s team thought that the invasion would cause internal sabotage and uprisings behind the lines in Castro’s regime. Janis, 1972) -The fourth step is: to make a choice and then implement and evaluate the decision under ideal conditions, assessing the pros and cons of each alternative against the decision criteria should allow a manager to choose the one that maximizes benefits to the organization. However, ideal conditions rarely exist. ‘Rational model, if implemented, would have negative consequences (causing confusion, dissipating commitment, generating uncertainty and reducing energy)’ (Brunsson, 1982).
A critical factor that decision theorists sometimes neglect to emphasize is that in spite of the way the process is presented on paper; decision-making is a nonlinear, recursive process. That is, most decisions are made by moving back and forth between the choice of criteria (the characteristics we want our choice to meet) and the identification of alternatives (the possibilities we can choose from among). The alternatives available influence the criteria we apply to them, and similarly the criteria we establish influence the alternatives we will consider.