The rational decision-making model is a structured and sequential approach to decision-making,

aimed at seeking precise solutions to well-defined problems using precise methods. The decision maker
derives the necessary information by observation, statistical analysis, or modeling, and makes a
systematic analysis of such ‘hard’ quantitative data to choose from the various alternative courses of
actions.

Rational approach is very demanding in that the decision maker is confronted with a given problem that
can be separated from other problems or at least considered meaningfully in comparison with them.

In rational approach, policy maker follow a logical and systematic approach involving the following
stages: Problem identification and definition,Definition of the objectives ,Identification of the various
alternative and their consequences as related to goal attainment,Evaluation of the various alternatives
by using a well designed criteria,Choice of the best alternative from among the various alternatives
Implementation of the choice made and communicating feedback

This approach assumed that the policy maker will have enough information when dealing with a
problem, that he or she will able to predict their consequences with some accuracy and that he/she will
be capable of making correct cost benefit comparison of the alternatives.

Advantages

The rational approach to decisions is based on scientifically obtained data that allow informed decision-
making, reducing the chances of errors, distortions, assumptions, guesswork, subjectivity, and all major
causes for poor or inequitable judgments. Such an information and knowledge based approach
promotes consistent and high quality decisions, and reduces the risk and uncertainties associated with
decisions.

The rational method infuses the decision-making process with discipline, consistency, and logic. It is a
step-by-step approach that requires defining problem, identifying the weighing and decision criteria,
listing out the various alternatives, deliberating the present and future consequences of each
alternative, and rating each alternative on each criterion. Such a sequential approach allows the decision
maker to arrive at the optimal decision.

The methodology caters to addressing complex issues by breaking it down into simple steps, and
considering all aspects of the problem with all possible solutions before making a final decision.

Disadvantages

The rational decision making process requires careful consideration and deliberation of data; this takes
time, making this method unsuitable for quick-decisions. In the age of fast-paced changes, seizing the
opportunity at the spur of the moment plays a big part in success, and the rational model does not live
up to this task.

Information insufficient. This problem can cause the difficulties in evaluatingthe issue even defining the
problem the situation usually happens in the uncertain conditions while making decisions. In this
condition, the decision maker does not have any information which can help to make the decision. As a
result, he cannot evaluate the alternatives and has to use his experience to make a decision.For
example, a company wants to decide whether to introduce a new product to a new
market, but in this market there is no similar product on sale. The company cannot predict who the
customers would response to the new product, because there is no previous data which can be used to
make the forecast. So the manager of the company cannot evaluate and predict the results of each
alternatives

Time limitations as discussed before, rational approach making need a lot of informations in the
evaluation step, to obtain the information, usually it need a long time of observation, collection and
analysis. In today’s fast paced business environment time is crucial when deciding business strategies,
the drawbacks of rational decision making in time limited situations is apparent.Besides, except time,

Unskilled decision makers in the process of rational decision making is also one of its disadvantage
Decision makers do not have complete knowledge of all the facts about the problems they cannot
foresee future events with complete accuracy. Therefore, it is not always possible to choose the
optimum solution.

Moreover, delay in making and implementing a decision may result in dilution of the perceived benefit
of such an alternative, for the benefits may accrue only when taken at that time. As such, this model
finds use mostly in making long-term and policy decisions rather than short-term or floor level
operational decisions.

Rational decision-making is steeped in conservatism, and errs on the side of caution. Many a time, the
company makes it big when managers or leaders follow their gut instincts to take a gamble and seize an
opportunity. Similarly, many times success depends on being the pioneer in the field, or the first to
launch a new and untested product, which may find wide acceptance. Limiting decisions to analysis of
available data may impede such approaches. The unavailability of past tends or information about such
new products or opportunities causes rational decision makers to opt for more secure and conventional
options.

Rational decisions are more structured and informed, but people making such decisions usually become
unpopular, with the rank and file perceiving them as insensitive autocratic leaders. The basis of
rationality is profit maximization or bottom line orientation, and interpersonal relations or emotions
have no place in what constitutes “rationality.” Reliance on cold facts requires ignoring or paying
secondary importance to sensitive human relationships. Over-reliance on the bottom line, with scant
regard to human values, slowly but surely erodes the organization of its intellectual capital and
resilience, sowing the seeds for its eventual destruction.

The fruits of rational decisions become apparent only in the long run, and the rank and file usually do
not get to see immediate or tangible returns or benefits of the decision. This combined with the
insensitivity to human emotions causes a negative perception.

Generally While rational policy making approach strive to remove subjectivity, assumptions, and
uncertainty from the decision-making process, the method itself is based on many assumptions.

The rational model assumes that the decision maker has accurate information and knowledge of the
situation, the underlying cause and effect relationships to evaluate various situations, and the necessary
tools and competence this need not always remain the case. Very often the quantity, quality, accuracy,
and integrity of information may be found wanting.
Moreover, the reliance of scientific data to generate the most optimal choice works well in theory, but
human ability has limits to gather, process, and understand all the information needed to optimize a
decision outcome. Such defects in information directly translate to a defect in the decision.

 Advantages of Rational Decision Making

As stated above, rational decision making is based on scientifically obtained information, so thisdecision
making model can reduce the chance of errors, uncertainties, assumptions, subjectivityand distortions.
This approach can also reduce to risk of failures because the evaluation andselection process of this
approach are based on sane and logic information and knowledge.Rational decision making can help the
decision makers to deal with difficult problems in acomplex environment.

“It is a

well-defined step-by-step approach that required

defining problems, identifying the weighing and decision criteria, listing out the various alternatives,deli
berating the present and future consequences of each alternative, and rating each alternativeon each
criterion (Simon, Herbert, 1978)

. Using this model, the issue will be addressed

by breaking down into easy steps, and all aspects of the issue will be considered with possiblesolutions
and then make the final decision.

Disadvantages of Rational Decision Making

Generally, better decision can be made if the decision maker follows the rational decision makermodel.
However, sometimes the business environment is very complex that confuse the
decisionmakers.Sometimes

Chongming Chen 02516624

.Another disadvantage of rational decision making will arise when there is

there are some other factors which can affect decision makers to makeoptimal decisions, such as
finance, resource, etc.Correct information is very important for rational decision making. However,
sometimes the datacollected for making decisions can be interpreted incorrectly. What is worse, some
of thedecision makers may make decisions based on similar problems occurred previously or their
ownexperience when dealing with previous problems. In this condition, the decision is based
oninformation, but the information is actually inappropriate or even wrong.When talking about
incorrect data interpretation, decision makers are also a key factor in makingdecisions.

 Rational/ comprehensive

This is seen the most effective and efficient approach in policy making process. However, this approach
incremental approach

This model posits the decision maker as starting not with some flesh goal but the policies currently in
force. Decision making here entails considering and reviewing only incremental change or changes at
the margin or a rather restricted number of policy alternatives and a limited number of consequences
that are envisaged for any given alternatives

Features of incrementalism

1) that in public policy making the level of theoretical understanding of relationships

among relevant variables is low

2) that policy makers typically confine themselves to consideration of those variables,

values and possible consequences that are of immediate concern to themselves and
which differ only marginally from the status quo, thus greatly simplify their analysis of
possible options.

3) That in the face of such limited informational and theoretical input policy movements
are based on trial and error interventions of an intendedly marginal kind, so that
unanticipated consequences may be coped with more easily.

4) That policy and/or political changes occurs only marginally, that is, what will be the
case tomorrow will not differ radically from what exists today. This is what sometimes
referred to as incrementalism “as a political pattern”-its care meaning

5) The policy making is a process of political and social interaction, negotiation,

bargaining, among group promoting and protecting differing and competing interests
and values. This is lindblom`s “partisan mutual adjustment” political process that
contrast with a system in which policy is driven by centralized, information based
decision making.

Incrementalism is a method of working by adding to a project using many small incremental changes

instead of a few (extensively planned) large jumps. Logical incrementalism implies that the steps in the
process are sensible.[1] Logical incrementalism focuses on "the Power-Behavioral Approach to planning
rather than to the Formal Systems Planning Approach". [1] In public policy, incrementalism is the method
of change by which many small policy changes are enacted over time in order to create a larger broad
based policy change. Political scientist Charles E. Lindblom developed this theoretical policy of
rationality in the 1950s as a middle way between the rational actor model and bounded rationality, as
both long term, goal-driven policy rationality and satisficing were not seen as adequate

Incrementalism is commonly employed in politics, engineering, software design, planning and industry.

Whereas it is often criticized as "fire fighting", the progressive improvement of product designs
characteristic, e.g., of Japanese engineering can create steadily improving product performance, which
in certain circumstances outperforms more orthodox planning systems. [citation needed]

Another example would be in small changes that make way for a bigger overall change to get past
unnoticed. A series of small steps toward an agenda would be less likely to be questioned than a large
and swift change. An example could be the rise of gas prices, the company would only raise the price by
a few cents every day, instead of a large change to a target price overnight. More people would notice
and dispute a dramatic, 10% increase overnight, while a 10% increase over a span of a week would less
likely be even noticed, let alone argued. This can be applied in many different ways, such as, economics,
politics, a person's appearance, or laws.

he advantages of incrementalism over other formal systems is that no time is wasted planning for
outcomes which may not occur.[citation needed]

 Politically expedient: Since it does not involve any radical and complete changes, it is easily
accepted and therefore the process is expedient.

 Simplicity: it is very simple to understand. Compared to some of the other budgeting methods
used in business, it is one of the easiest to put in practice, since one does not have to be an
accountant or have much experience in business to use this form of budgeting.

 Gradual change: a very stable budget exists from one period to the next and allows for gradual
change within the company. Many managers are intimidated by large budget increases from
one period to the next. This type of budget will not cause that problem because it is based on
the previous period's budget.

 Flexibility: it is very flexible. Doing it from one month to the next allows one to see change very
quickly when a new policy or budget is implemented.

 Avoiding conflict: companies with many different departments often run into conflict between
departments because of their different budgets. With this method of budgeting, it is easier to
keep everyone on the same page and avoid conflicts between departments. [3]

Disadvantages are that time may be wasted dealing with the immediate problems and no overall
strategy is developed. Incrementalism in the study of rationality can be seen as a stealthy way to bring
about radical changes that were not initially intended, a slippery slope.

 Beagle Fallacy: A beagle hound has a very good sense of smell but limited eyesight, and thus
could miss prey that appears in front of but downwind. Likewise, by only focusing on
incremental changes to policies and policy applications, organisations are in danger of missing
the broader directions in fulfilling their mandate. Beagle fallacy is the primary criticism of
incrementalism.[4]

 Failure to account for change: it is based on the idea that expenses will run much as they did
before. However, in business, that is rarely the case, and there are always variables.

 Absence of incentives: such a simple method of budgeting really does not provide employees
with much reason to be creative. They have no incentive to innovate and come up with new
ideas or policies since everything is limited.
  "Use it or lose it" perspective: Many employees view this as a "use it or lose it" system and know
that next year's budget is going to be incrementally based on this year's. Therefore, if they do
not spend everything that is allocated to them, they may not have enough money to work with
next year. That creates an environment where waste is encouraged. [5]

 Mixed scanning

This utilizes the aforementioned approaches that are the rational/comprehensive and incremental
approaches. It provides both a realistic description of the strategy used by actors in a large variety of
fields and the strategy for reflective areas to follow eg;

-mixed scanning provides particular Procedures for collecting information and strategy for resource
allocation.

-in mixed scanning approach it is important to differentiate decisions from incremental ones

-fundamental decisions are made by exploring the main alternatives the actor sees in view of his/her
conception of his/her goals, while incremental decision are made within the context set by fundamental
decisions and fundamental reviews.

Each of the above three elements in mixed scanning helps to reduce the effects of the particular shorty
comings of the first two approaches

1. Simon, Herbert, (8 December 1978) A. “Rational Decision Making in Business Organizations.”

Nobel Memorial Lecture. Carnegie-Mellon University, Pittsburgh, Pennsylvania. Retrieved
from https://citeseerx.ist.psu.edu/viewdoc/download?
doi=10.1.1.117.7589&rep=rep1&type=pdf on July 18, 2011.

2. Carey, W.P. “Rational versus Holistic: Two Very Different Approaches to Executive Decision
Making.” Retrieved from https://knowledge.wpcarey.asu.edu/article.cfm?articleid=1281  on July
18, 2011.

References
Mansor Fadzil, Zakaria Ismail, May 2008,

  Principles of Management 

, Open University MalaysiaWalker K, 2001,

  Decision Making 

, K-State Research and Extension, Manhattan, KSAbu Mansor Ahmad, Fais Ahmad, Ghazali Din, Hanissah
A. Razak & Nor Azila Mohd Noor,1999,

  Pengantar pengurusan

. Sintok, University Utara MalaysiaSimon, Herbert, December 1978,

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,Carnegie-Mellon University, Pittsburgh, PennsylvaniaHoenig C, 2006,

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, Bsiness The Ultimate Resource,PerseusVecchio, R.P, 2006,

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