Rational Decision Making Steps

Decision making is the process of choosing a solution from available alternatives. Let’s take a look at the steps used in rational decision making.

Rational decision making is a systematic process in which managers define problems, evaluate alternatives, and choose optimal solutions that provide maximum benefits to their organizations. The first step in decision making is identifying and defining the problem.

The presence of a gap between an existing state and a desired state is no guarantee that managers will make decisions to solve problems. Being aware of a problem isn’t enough to begin the decision-making process.

It’s not enough to be aware of a problem and be motivated to solve it. Managers must also have the knowledge, skills, abilities, and resources to fix the problem.

After identifying decision criteria, the next step is deciding which criteria are more or less important. After identifying and weighting the criteria that will guide the decision-making process, the next step is to identify possible courses of action that could solve the problem.

In theory, fully rational decision makers maximize decisions by choosing the optimal solution. In practice, however, limited resources along with attention, memory, and expertise problems make it nearly impossible for managers to maximize decisions. Consequently, most managers don’t maximize - they satisfice.

Whereas maximizing is choosing the best alternative, satisficing is choosing a “good-enough” alternative.