Decision Making Models Rational – Consider all information – Objective assessment Bounded rationality model – Inadequate information – Limited search, satisficing Political – Pursue self-interests

Steps in the Decision-Making Process: The Classical View Opportunity or Problem Situation Opportunity or Problem Recognition Opportunity or Problem Definition Generate Alternatives Gather Information Evaluate, then Select One Alternative Implement Selected Alternative Evaluate Effectiveness

Steps in the Decision-Making Process: The Administrative View Opportunity or Problem Situation Opportunity or Problem Recognition Criteria for Satisficing Alternative Evaluate Alternatives as Available Select First Acceptable Alternative Implement Selected Alternative Evaluate Effectiveness

Copyright © 2000 by Harcourt, Inc. All rights reserved. Obstacles to Effective Decision-Making Four most common obstacles: – Judgmental biases – Escalation of commitment – Groupthink – Willingness of groups to take risks