The Six-Step Rational Decision-Making Model

1.Define the problem.2.Identify decision criteria3.Weight the criteria4.Generate alternatives5.Rate each alternative on each criterion6.Compute the optimal decision

Part 1 - IntroductionIdentify decision criteria

Once a decision maker has defined the problem, he or she needs toidentify the decision criteria that will be important in solving theproblem. In this step, the decision maker is determining what’srelevant in making the decision. This step brings the decision maker’s interests, values, and personalpreferences into the process.Identifying criteria is important because what one person thinks isrelevant, another may not.Also keep in mind that any factors not identified in this step areconsidered as irrelevant to the decision maker.

Weight the criteria

The decision-maker weights the previously identified criteria in orderto give them correct priority in the decision.

Generate alternatives

The decision maker generates possible alternatives that couldsucceed in resolving the problem. No attempt is made in this step toappraise these alternatives, only to list them.

Rate each alternative on each criterion

The decision maker must critically analyze and evaluate each one. The strengths and weakness of each alternative become evident asthey compared with the criteria and weights established in secondand third steps.

Compute the optimal decision

Evaluating each alternative against the weighted criteria andselecting the alternative with the highest total score.

Assumptions of Model

Problem clarity. (The decision maker is assumed to havecomplete information regarding the decision situation.)

Known options (Identify all the relevant criteria and can list allthe viable alternatives. The decision maker is aware of all thepossible consequences of each alternative.)

Clear preference (The criteria and alternatives can be rankedand weight to reflect their importance)

Constant preferences (The specific decision criteria are constantand that weights assigned to them are stable over time)

No time or cost constraints

aximum payoff

Part 2 - Improving Creativity in Decision MakingCreative Potential

– Get out of the psychological ruts most us getinto and learn how to think about a problem in divergent ways.

Three-Component Model of Creativity

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Expertise

(The foundation of all creative work)knowledge of a subject were necessary conditions for us tobe able to make creative contributions to the fields. Thepotential for creativity is enhanced when individuals haveabilities, knowledge, proficiencies, and similar expertise intheir fields of endeavor.

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Creativity Skills

(The ability to use analogies to see thefamiliar in a different light. Apply an idea from one context toanother)Intelligence, independence, self-confidence, risk taking, andinternal locus of control, tolerance for ambiguity andperseverance in the face of frustration.

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Intrinsic task motivation

(The desire to work on a task)interesting, involving, exciting, satisfying, or personally

challenging these factor would be affect the task motivation. This would turns creativity potential into actual creativeideas.Five organizational factors can impede staff creativity:1.

Expected Evaluation

[Focusing on how staff’s work is goingto be evaluated]2. Surveillance [Being watched while staff are working]3. External motivators [Emphasizing external, tangiblerewards]4. Competition [Facing win-lose situations with peers]5. Constrained choice [Being given limits on how staff can dotheir work.]

Part 3 - How Decisions Are Actually Made in Organization

People are usually content to find an acceptable or reasonablesolution to their problem rather than optimal one. Consequently,decision makers generally make limited use of their creativity.Choices tend to be confined to the neighborhood of the problemsymptom and to the neighborhood of the current alternative.“Most significant decisions are made by judgment, rather than by adefined prescriptive model.”

Bounded Rationality

when a staff considered which college to attend, they will not lookevery viable alternative nor identify all the criteria that wereimportant in decision.Instead of optimizing, staff probably “satisfied”.When faced with a complex problem, most people respond byreducing the problem to a level at which it can readily understand. The limited information-processing capability of human beingsmakes it impossible to assimilate and understand all the informationnecessary to optimize. So people satisfied; that is, they seeksolutions that are satisfactory and sufficient.Because the capacity of the human mind for formulating and solvingcomplex problems is far too small to meet the requirements for fullrationality, individuals operate within the confines of

bounded