How Should Decisions Be Made? A. The Rational Decision-Making Process - Motivation Theory
The optimizing decision maker is rational. He or she makes consistent, value-maximizing choices within specified constraints.
The Rational Model—six steps listed below
3. Step 1: Defining the problem
A problem is a discrepancy between an existing and a desired state of affairs.
Many poor decisions can be traced to the decision maker overlooking a problem or defining the wrong problem.
4. Step 2: Identify the decision criteria important to solving the problem.
The decision maker determines what is relevant in making the decision. Any factors not identified in this step are considered irrelevant.
This brings in the decision maker’s interests, values, and similar personal preferences.
5. Step 3: Weight the previously identified criteria in order to give them the correct priority in the decision.
6. Step 4: Generate possible alternatives that could succeed in resolving the problem.
7. Step 5: Rate each alternative on each criterion.
Critically analyze and evaluate each alternative.
The strengths and weaknesses of each alternative become evident as they are compared with the criteria and weights established in the second and third steps.
8. Step 6: The final step is to compute the optimal decision:
Evaluate each alternative against the weighted criteria and selecting the alternative with the highest total score.
9. Assumptions of the Model
Problem clarity. The decision maker is assumed to have complete information regarding the decision situation.
Known options. It is assumed the decision maker is aware of all the possible consequences of each alternative.
Clear preferences. Criteria and alternatives can be ranked and weighted to reflect their importance.
Constant preferences. Specific decision criteria are constant and the weights assigned to them are stable over time.
No time or cost constraints. The rational decision maker can obtain full information about criteria and alternatives because it is assumed that there are no time or cost constraints.
Maximum payoff. The rational decision maker will choose the alternative that yields the highest perceived value.