Non Rational Model:
non-rational models of managerial decision
making suggest that information-gathering and
processing limitations make it difficult for managers to make optimal
1. The satisficing model,
developed in the 1950s by Novel Prize winning
Herbert Simon, holds that managers seek alternatives only until they
find one that looks
satisfactory, rather than seeking the optimal decision.
a. Bounded rationality
means that the ability of managers to be perfectly
making decisions is limited by such factors as cognitive capacity and
b. Actual decision making is not perfectly rational because of
1) Inadequate information
2) Time an cost factors
3) The decision maker’s own misperceptions or prejudices
4) Limited human memory
Limited human data-processing abilities.
Satisficing can be appropriate when the cost of delaying a decision or
searching for a better alternative
outweighs the likely payoff from such a course.
The incremental model
holds that managers make the smallest response
possible that will reduce the
problem to at least a tolerable level.
a. Managers can make decisions without processing a great deal of
b. Incremental strategies are usually more effective in the short run
than in the long
The garbage-can model
of decision making holds that managers behave in
virtually a random pattern in
making non-programmed decisions.
a. Factors that determine decisions include the particular individuals
involved in the
decisions, their interests and favorite solutions to problems, as well
opportunities they stumble upon.
b. The garbage-can approach is often used in the absence of solid
management and can lead to severe problems.
Group Decision making:
A. Decisions on all levels of organization are
frequently made by groups.
Group decision making has several advantages and disadvantages over
individual decision making.
1. Some advantages
of group decision making include:
a) Groups bring more diverse information and knowledge to bear on the
question under consideration.
b) An increased number of alternatives can be developed.
c) Greater understanding and acceptance of the final decision are
d) Members develop knowledge and skill for future use.
2. Group decision making has several
disadvantages when compared to individual
a) Group decision making is more time consuming.
b) Disagreements may delay decisions and cause hard feelings.
c) The discussion may be dominated by one or a few group members.
d) Groupthink is the tendency in cohesive
groups to seek agreement about
an issue at the expense of realistically appraising the situation.
B. Managers can enhance group decision-making processes by taking
steps to avoid
the pitfalls of group decision making.
1. Individuals should be involved only if they
have information and knowledge
relevant to the decision.
2. The composition of the group should reflect
the diversity of the broader
workgroup. Heterogeneous groups have been found to be more effective
time than groups with the same nationality and ethnic backgrounds.
3. Two tactics are available to avoid group-think
a. Devil’s advocates
are individuals who are assigned the role of
sure than the negative aspects of any attractive decision alternatives
b. Dialectical inequity
is a procedure in which a decision situation
approached from two opposite points of view.