Welcome toOrganizational Behavior

Decision Making in Organization [ ]

 What’s are the models of decision-making…???

The first is the Rational Decision-Making model…

This model assumes a perfect world in order to make decisions.

It assumes that there is complete information, that every option has been identified and that there is a

maximum payoff.

The rational decision-making model  relies  on  a number of assumptions, including that  the  decision  maker  has complete information, is able to identify all the relevant  options  in an unbiased manner, and 

chooses  the  option with the  highest  utility.

The second model is Bounded Reality model…

This model represents more of the real world where it seeks solutions that are the best, given the

information that is available.

Our  limited  information-processing capability makes  it impossible  to assimilate and understand all the information necessary to optimize. So most people respond to a complex problem by reducing it to a

level at which they can readily understand it.

The third model is based on intuition…

This is the non-conscious process that occurs as a result of experiences that result in quick decisions. 

For most  of the  twentieth century, experts believed decision makers’ use of intuition was irrational or ineffective. That’s no longer the case.38 We now recognize that rational analysis has been overemphasized and, in certain instances, relying on intuition can improve decision making.39 But we can’t rely on it too much. Because it is so unquantifiable, it’s hard  to know when  our hunches are right  or wrong. The  key is neither to abandon nor rely solely on intuition, but to supplement it with evidence  and good judgment.

For most  of the  twentieth century, experts believed decision makers’ use of intuition was irrational or ineffective. That’s no longer the case.38 We now recognize that rational analysis has been overemphasized and, in certain instances, relying on intuition can improve decision making.39 But we can’t rely on it too much. Because it is so unquantifiable, it’s hard  to know when  our hunches are right  or wrong. The  key is neither to abandon nor rely solely on intuition, but to supplement it with evidence  and good judgment.

For most  of the  twentieth century, experts believed decision makers’ use of intuition was irrational or ineffective. That’s no longer the case.38 We now recognize that rational analysis has been overemphasized and, in certain instances, relying on intuition can improve decision making.39 But we can’t rely on it too much. Because it is so unquantifiable, it’s hard  to know when  our hunches are right  or wrong. The  key is neither to abandon nor rely solely on intuition, but to supplement it with evidence  and good judgment.