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Rational Decision Making Model: Effective Strategies for Optimal Outcomes

Enhance decision-making skills by recognizing and defining problems or opportunities. Gather relevant information, diagnose causes, and be aware of assumptions to make informed choices. Develop and evaluate alternatives, choose, implement, and evaluate decisions. Understand decision-making styles, techniques, and tools such as marginal analysis and mathematical models for strategic, operating, and tactical decisions. Utilize Peter Drucker's quote to prioritize important tasks over urgent ones.

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Rational Decision Making Model: Effective Strategies for Optimal Outcomes

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  1. RATIONAL DECISION MAKING MODEL 1. RECOGNIZE, DEFINE • PROBLEM • OPPORTUNITY

  2. RATIONAL DECISION MAKING MODEL • GATHER “RELEVANT” INFO • DIAGNOSE CAUSE(S) • ASSUMPTIONS! • BE AWARE OF THEM UNDERSTAND THEM

  3. PROBLEMS WITH DEFINING PROBLEM • TASK INSTRUCTIONS • PERCEPTIONS • “EXPERIENCE” • “MENTAL SETS” • JUDGEMENTAL

  4. PROBLEMS WITH DEFINING PROBLEM(CONT’D) • “SOLUTION MINDED” • NOT ENOUGH INFORMATION • NOT ENOUGH TIME • CONFUSING PROBLEM AND CAUSE(S) • INITIAL “SUCCESS/FAILURE”

  5. PROBLEMS WITH DEFINING PROBLEM(CONT’D) • LIMITED/BOUNDED RATIONALITY • LIMITED CAPACITY/CAPABILITY • SATISFICING • SEQUENTIAL ATTENTION • BARGAINING “BEHAVIORAL MODEL”

  6. RATIONAL DECISION MAKING MODEL 2. DEVELOP ALTERNATIVES 3. EVALUATE ALTERNATIVES • UNDERSTAND CONSEQUENCES

  7. RATIONAL DECISION MAKING MODEL 4. CHOOSE (DECIDE) 5. IMPLEMENT 6. EVALUATE, CONTROL

  8. TYPES OF DECISIONS • PROGRAMMED • REPETITIVE • ROUTINE • HANDLED WITH DEFINITE APPROACH

  9. TYPES OF DECISIONS • NON-PROGRAMMED • UNIQUE • NONRECURRING • HANDLED WITH CUSTOM RESPONSE

  10. DECISION CONDITIONS • CERTAINTY • 100% SURE • RISK • REASONABLE ESTIMATE OF PROBABILITY • UNCERTAINTY • CANNOT EVEN ESTIMATE PROBABILITY

  11. DECISION MAKING STYLES • DELIBERATE/RATIONAL • IMPULSIVE

  12. DECISION MAKING TECHNIQUES • INDIVIDUAL • GROUP • BRAINSTORMING • NOMINAL • DELPHI

  13. FOCUS • STRATEGIC • OPERATING • TACTICAL

  14. TOOLS • MARGINAL ANALYSIS • COST-BENEFIT • EXPERIENCE • EXPERIMENTATION

  15. TOOLS • MATHEMATICAL MODELS • DECISION TREE • CHARTS

  16. SETTING PRIORITIES NOT URGENT URGENT I II IMPORTANT III IV NOT IMPORTANT

  17. “WE SELDOME HAVE TIME FOR THE IMPORTANT BECAUSE WE ARE WORKING ON THE IMMEDIATE AND THE IMMEDIATE IS SELDOM THE IMPORTANT” - Peter Drucker

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