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How Should Decisions Be Made? A. The Rational Decision-Making Process - Motivation Theory

  1. The optimizing decision maker is rational. He or she makes consistent, value-maximizing choices within specified constraints.

  2. 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.

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