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The Rational Decision-Making Model

Organisations take umpteen decisions during the functioning of the day-to-day activities. However, what is it that goes into the process of making decisions?

Types of decisions

There are two major categories of decisions- programmed and non-programmed. Programmed decisions are stapled and tested formula for problems that recur repeatedly. Non-programmed decisions are responses to situations, which are unique and have not been encountered previously.

Rational decision-making model

This is the commonly used framework for making decisions and aids taking non-programmed decisions.

Step 1: Identify the problem and the criteria to be met. Misdiagnosed problems result in faulty decisions. Framing the problem in a new perspective helps decision-makers think unconventionally. Another issue is mistaking the symptoms to be problems and not recognising the root cause. This hinders the problem identification stage and biases the process.

Step 2: Develop a list of alternative actions. Generating a list of choices aids solution search. Soliciting information from various sources improves the quality of alternatives generated.

Step3: Choose a solution from the list of alternatives. However, this is not the actual decision-making process. It is the first stage of a lengthy process of decision-making. The solution selected should have matching criteria to those identified in the first step. Often, there is no single alternative that fulfils all the criteria outlined in the problem identification stage. Further, decision-makers have to contend with the alternative, which minimally meets most criteria.

Step 4: The process of decision-making does not end with the selection of a solution. Its success depends on the implementation of the solution, which necessitates envisaging the future. This vision must be translated effectively into action through others involved in the process. Identifying each task to be completed and resources required for the completion of the objective is critical for the success of a decision-making process.

Step 5: Evaluate the choice. Even after the successful implementation, the effectiveness of the decisions taken need to be monitored and evaluated periodically. The criteria developed in the first step are used for evaluation.

The rational decision-making model demands creativity and innovation. Organisations need to thus create an environment that fosters such ingenuity in decision-making.