RATIONAL DECISION MAKING MODEL

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RATIONAL DECISION MAKING MODEL

• 1. RECOGNIZE, DEFINE
• PROBLEM
• OPPORTUNITY

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RATIONAL DECISION MAKING MODEL

• GATHER RELEVANT INFO
• DIAGNOSE CAUSE(S)
• ASSUMPTIONS!
• BE AWARE OF THEM
• UNDERSTAND THEM

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REARRANGE NEW DOOR TO MAKE ONE WORD.
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IN WHAT ORDER ARE THESE NUMBERS? 854917632
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PROBLEMS WITH DEFINING PROBLEM

• TASK INSTRUCTIONS
• PERCEPTIONS
• EXPERIENCE
• MENTAL SETS
• JUDGEMENTAL

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PROBLEMS WITH DEFINING PROBLEM(CONTD)

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

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PROBLEMS WITH DEFINING PROBLEM(CONTD)

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

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RATIONAL DECISION MAKING MODEL

• 2. DEVELOP ALTERNATIVES
• 3. EVALUATE ALTERNATIVES
• UNDERSTAND CONSEQUENCES

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RATIONAL DECISION MAKING MODEL

• 4. CHOOSE (DECIDE)
• 5. IMPLEMENT
• 6. EVALUATE, CONTROL

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TYPES OF DECISIONS

• PROGRAMMED
• REPETITIVE
• ROUTINE
• HANDLED WITH DEFINITE APPROACH

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TYPES OF DECISIONS

• NON-PROGRAMMED
• UNIQUE
• NONRECURRING
• HANDLED WITH CUSTOM RESPONSE

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DECISION CONDITIONS

• CERTAINTY
• 100 SURE
• RISK
• REASONABLE ESTIMATE OF PROBABILITY
• UNCERTAINTY
• CANNOT EVEN ESTIMATE PROBABILITY

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DECISION MAKING STYLES

• DELIBERATE/RATIONAL
• IMPULSIVE

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DECISION MAKING TECHNIQUES

• INDIVIDUAL
• GROUP
• BRAINSTORMING
• NOMINAL
• DELPHI

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FOCUS

• STRATEGIC
• OPERATING
• TACTICAL

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TOOLS

• MARGINAL ANALYSIS
• COST-BENEFIT
• EXPERIENCE
• EXPERIMENTATION

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TOOLS

• MATHEMATICAL MODELS
• DECISION TREE
• CHARTS

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SETTING PRIORITIES
NOT URGENT
URGENT
I
II
IMPORTANT
III
IV
NOT IMPORTANT
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WE SELDOME HAVE TIME FOR THE IMPORTANT BECAUSE
WE ARE WORKING ON THE IMMEDIATE AND THE IMMEDIATE
IS SELDOM THE IMPORTANT - Peter Drucker