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A. Rational Model
A. Rational Model
A variety of models and processes have been offered to suggest ideally how people should describe
how they actually make decisions. Some writers discuss rational, bounded rational and intuitive or
value- based models. Describe and discuss the models.
a. Rational Model
This kind of rational decision making model assumes that the decision maker is
knowledgeable or has full or perfect information regarding the alternatives that may be used in
the decision making process. It also assumes that they have time, cognitive ability, and
resources to evaluate each choice against others. This is a logical model arranged
chronologically for choosing between alternatives that follows a path from the problem
identification process down to the solution. This process involves, logic, objectivity, and analysis
over subjectivity and insight.
This model disregards the factors that cannot be quantified, such as ethical concerns. It
leaves out consideration of personal feelings, loyalties, or sense of obligation. This creates bias
towards the preference of facts, data and analysis over intuition or desires.
b. Bounded Rational
This model is defined as the ability and willingness to make a decision by following a
reasoned, unemotional and logical approach in decision making.
Because of the limitations mentioned above, a decision maker would rather be more interested
in a choice which is satisfactory and sufficient.
In other words, a manager must settle for limited rationality or “bounded” rationality.
Since it is not possible for managers to be fully rational in practice, they sometimes compromise
with their dislike of risks—their desire to “play it safe”—to interfere with the desire to reach the
best solution under the circumstances. In here, the decision maker doesn’t utilize the decision-
making approaches as a result of cognitive limitations in the capacity to understand and
overlook an information which may affect the information accessibility.
REFERENCES:
https://iedunote.com/bounded-rational-decision-making
https://courses.lumenlearning.com/boundless-management/chapter/rational-and-nonrational-decision-
making/
https://www.marketing91.com/bounded-rationality/
http://open.lib.umn.edu/principlesmanagement/chapter/11-3-understanding-decision-making/
https://the-happy-manager.com/articles/rational-decision-making-model/
https://study.com/academy/lesson/bounded-rationality-and-decision-making-in-organizations.html