The decision making process is a complex process in the higher hierarchy of management. The complexity is the result of many factors, such as the inter-relationshipamong the experts or decision makers, a job responsibility, a question of feasibility, thecodes of morals and ethics, and a probable impact on business.
The personal values of the decision maker play a major role in decision making. Adecision otherwise being very sound on the business principle and economic rationalitymay be rejected on the basis of the personal values, which are defeated if such a decisionis implemented. The culture, the discipline and the individual’s commitment to the goalswill decide the process and success of the decision.
Whatever may be the situation, if one analyses the factors underlying the decisionmaking process, it would be observed that there are common characteristics in each of them. There is a definite method of arriving at a decision: and it can be put in the form of decision process model.
The decision making process requires creativity, imagination and a deepunderstanding of human behavior. The process covers a number of tangible andintangible factors affecting the decision process. It also requires a foresight topredict the post-decision implications and a willingness to face those implications.All decisions solve a problem but over a period of time they give rise to a number of other problems.
Rational Decision Making
A rational decision is the one which, effectively and efficiently, ensures theachievement of the goal for which the decision is made. If it is raining, it is rational tolook for a cover so that you do not get wet. If you are in business and want to make profit, then you must produce goods and sell them at a price higher than the cost of production. In reality, there is no right or wrong decision but a rational or an irrationaldecision. The quality of decision making is to be judged on the rationality and notnecessarily on the result it produces. The rationality of the decision made is not the samein every situation. It will vary with the organization, the situation and the individual’sview of the business situation. The rationality, therefore, is a multi-dimensional concept.For example, the business decisions in a private organization and a Public Sector Undertaking differ under the head of rationality. The reason for this difference inrationality is the different objectives of the decision makers. Any business decision if asked to be reviewed by a share-holder, a consumer, an employee, a supplier and a socialscientist, will result in a different criticism with reference to their individual rationality.This is because each one of them will view the situation in different contexts and themotive with the different objectives. Hence, whether a decision is right or wrong dependson a specific rational view.Simon Herbert differentiates among the types of rationality. A decision, in a givensituation is: