Decision maker and the rational man

People agree on criteria and weights. All alternatives are known. All consequences can be anticipated. Decision makes are rational.

Decision maker and the rational man

Decision Maker and the Rational Man 1. Introduction As individuals we face decision situations everyday. It might be a problem or an opportunity, but in both cases the individual has to come at a perfect decision.

At a rational view individual will try to gather as much information as possible on the available alternatives and the consequences they might derive by implementing each alternative.

Individuals think and reason before they act and they try to select the best alternative accessible to them. What is most important is to select a choice mong the alternatives available.

Problems and limitations with choosing rationally

Any person who is faced a significant choice problem in real life, operating individually or organizationally, tends to complete the task according to the prescription by the rational choice. In words, he will think as a rational man as depicted in a textbooks of economics.

Rational man will be reasonably directed toward the achievement of conscious goals and will aim to maximize his benefits. Literature Review Decision making is a means to an end. According to Stoner et al. It is about identifying and choosing solutions that lead to a desired end result Kreitner and Kinicki, The process begins with a problem and ends when a solution had been chosen.

Decision maker is the individual or group that actually makes the choice among alternatives. Individual decision making is an important part of organizational behavior as well as in day to day life of any individual.

Ideal decision makers try to use all their talents when making a decision and characterized by reason and sound Judgment Certo, Over the years, there has been much debate on how to accurately describe decision making processes in general.

Beyond an implicit agreement that decisions are made through some sort of process, chaotic or otherwise, there is little else scholars agree upon.

By simple definition rational means efficient, i. Economic definition of the rational man refers solely to a man who moves toward his goals in a way which, to the best of his knowledge, uses the least possible input of scarce resources per unit of valued utput Downs, Human behavior is goal-oriented, chosen for a reason.

Goals, objectives, purposes, and interests explain behavior. So under rational man concept human being is always behave in a way to maximize the value he gains through the end. So that is where the decision maker and rational man come together.

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The rational model of decision making which is also known as classical model is best used to discuss about the behavior of a manager who weight his options and calculate optimal levels of risks efore making the decision. Rational decision making describes choices that are consistent and value maximizing within specified constraints Robbins and Coulter, It assumes that managers have access to all the information needed to reach a decision Certo, The rational model proposes that managers use a rational, four-step sequence when making decisions: This model is based on the premise that managers ptimize when they make decisions.

A decision maker who is perfectly rational would be fully objective and logical Robbins and Coulter, He or she will carefully define the problem and will have a defined goal which is clear and specific.

Moreover making decisions using rationality would consistently lead toward selecting the alternative that maximizes the likelihood of achieving that goal. However in the rational decision making model there are some assumptions of rationality which apply to any decision.

Assumptions of Rationality Source: Robbins and Coulter, But in the real world individuals must make decisions within tight time constraints and with less information than he or she likes to have.

Bounded rationality theory pointed out that decision makers must cope with inadequate information about the nature of the problem and its possible solutions, a lack of time or money to complie more complete information, an ability to remeeber large amount of information, and the limits of heir own intelligence Stoner That means the deciison maker is acturally deviates form being a rational man.

Decision maker and the rational man

Instead of exploring the perfect or ideal solution, decision makers frequently settle for one that will adequately serve their purpose.

That means they sacrifice rather than maximize. Decision makers usually use their intuition to improve their decision making.

It comes with experience and learning.Decision Maker and the Rational Man l.

Characteristics of rational decision making

Decision Maker and the Rational Man 1. Introduction As individuals we face decision situations everyday. It might be a problem or an opportunity, but in both cases the individual has to come at a perfect decision. At a rational view individual will try to gather as much information [ ].

A rational decision is the decision most likely to achieve your goals based on evidence.

Decision maker and the rational man

To make a rational decision you must first know your goal and obtain relevant information about it. Rational choice theory, In general, rational decision making entails choosing among all available alternatives the alternative that the individual most prefers.

The "alternatives" can be a set of actions ("what to do?") or a set of objects ("what to choose/buy"). The neoclassical approach is to call on rational economic man to solve.

Rational or ‘Economic Man Model’: The classical approach to decision making in economics has used the ‘economic man’ model under conditions of certainty. The economic man is completely rational. The model of rational decision making assumes that the decision maker has full or perfect information about alternatives; it also assumes they have the time, cognitive ability, and resources to evaluate each choice against the others.

The chosen solution will be in agreement with the preferences and beliefs of the decision maker. The rational choice will satisfy conditions of logical consistency and deductive completeness.

Decision making will be objective, unbiased and based on facts.

Models of Decision Making: Rational, Administrative and Retrospective Decision Making Models