Describe the stages in the rational model of decision making. What is good and bad about this model?

What will be an ideal response?

The rational model of decision making explains how managers should make decisions. There are four generic stages associated with rational decision making (see Figure 11.2).

1: Identify the Problem or Opportunity-Problem.  Identification is the first stop in solving any type of problem. Managers also have to make decisions regarding opportunities. Whether you face a problem or an opportunity, the goal is always the same: to make improvements that change conditions from their current state to a more desirable one.

2: Generate Alternative Solutions. For many people this is the exciting part of decision making. The step where you get to be creative, think outside the box, and share your ideas of how things should be done. Brainstorming, for instance, is a common technique used by both individuals and groups to generate potential solutions. A research study revealed that managers struggled during this stage because of three key decision-making blunders:

(1) rushing to judgment,

(2) selecting readily available ideas or solutions, and (3) making poor allocation of resources to study alternative solutions. Decision makers thus are encouraged to slow down when making decisions, to evaluate a broader set of alternatives, and to invest in studying a greater number of potential solutions.

3: Evaluate Alternatives and Select a Solution. In this stage, evaluate alternatives in terms of several criteria. Not only are costs and quality important, but you should consider the following questions:

(1) Is it ethical? (If not, don’t consider it.)

(2) Is it feasible? (If time is an issue, costs are high, resources are limited, technology is needed, or customers are resistant, for instance, then the alternative is not feasible.)

(3) Will it remove the causes and solve the problem?

4: Implement and Evaluate the Solution Chosen. Once a solution is chosen, it needs implementation. And after implementation, stakeholders need to evaluate how effectively the solution solves the problem.
The rational model is prescriptive, outlining a logical process that managers should use when making decisions. As such, the rational model is based on the notion that managers optimize when making decisions. Optimizing involves solving problems by producing the best possible solution and is based on a set of highly desirable conditions-having complete information, leaving emotions out of the decision-making process, honestly and accurately evaluating all alternatives, time and resources are abundant and accessible, and people are willing to implement and support decisions. Practical experience, of course, tells us that these conditions are all rarely met, and assumptions to the contrary are unrealistic. Herbert Simon in 1978 earned the Nobel Prize for his work on decision making. He put it this way: “The assumptions of perfect rationality are contrary to fact. It is not a question of approximation; they do not even remotely describe the processes that human beings use for making decisions in complex situations.”

Three benefits of trying to follow a rational process as much as realistically possible are quality, transparency, and responsibility.