P.O.

STEPS IN RATIONAL DECISION

MAKING
MADE BY:
MADHAB KHAREL
MANOJ KUMAR PANDA
MD.YUSUF KHAN
 DEFINATION
• DECISION MAKING
Decision is a choice between two or more alternatives.

• RATIONAL DECISION MAKING

A decision is rational if appropriate means are choosen
to reach desired end.
STEPS IN RATIONAL DECISION MAKING

• RECOGNISING THE PROBLEM

• DECIDING PRIORITIES AMONG PROBLEMS
• DIAGNOSING THE PROBLEM
• DEVELOPING ALTERNATIVE SOLUTIONS OR
COURSE OF ACTION
• MEASURING AND COMPARING THE
CONSEQUENCIES OF ALTERNATIVE SOLUTIONS
• CONVERTING THE DECISION INTO EFFECTIVE
ACTION AND FOLLOW-UP OF ACTION.
 RECOGNISING THE PROBLEM
First of all, it is necessary to search the environment for
the existence of a problem. A problem exists.
1. When there is a deviation from past experience
2. When there is a deviation from the plan
3. When other people bring problems to the manager
4. When competitors outperform the manager’s
organisations
 DECIDING PRIORITIES AMONG
PROBLEMS
• A manager should not allow himself to be bogged down
by all sorts of problems.
• Some of his problems are such which can be solved best
not by him but by his subordinates.
• Some problems may need to be referred upward
because they affect other departments or require
information available only at a higher level.
• Some problems may be differed because it may not be
the best time to act.
• some problems may even be procrastinated or
postponed and allowed to be solved without any effort.
 DIAGNOSING THE PROBLEM

• It means identifying each and every kind of

problems correctly is called diagnosing.
• A manager should remember that the symptoms
of a problem that he observes may sometimes
mislead him.
they may lead him to suspect one part of the
system or operation when, in fact the defect may
lie hidden in another part which is perhaps less
visible.
 DEVELOPING ALTERNATIVES SOLUTIONS OR
COURSES OF ACTION

• After diagnosing the problem, the next step is to develop alternative

solutions.
• Generally for every problem there are alternative solutions. In fact if
there seems to be only one way of doing a thing, that way is
probably wrong.
• In other words in every course of action alternatives exist.
• A manager should keep in mind there feasibility. He should have
clear recognition of all those limiting factors
which can make the accomplishment of an alternative difficult or
impossible. so various limiting factor might be non availability of
cash and credit, late delivery of capital equipment, anti-expansion
laws etc.
• Two ways to create alternatives are to review the past experience of
a similar situation and to scrutinize (study) the practice of other
companies.
• Although no two managers can think alike the
testimonies of inventors and scientists indicate that the
creative process consists if five stages.
1. Saturation: The managers must make himself
thoroughly familiar with the problem.
2. Deliberation: He must think of the problem from
several view points.
3. Incubation: If there is no fruitful result of deliberation ,
he must temporarily turn off the conscious search and
relax.
4. Illumination: A flash of insight may take place and the
manager may get some good ideas.
5. Accommodation: In this stage the manage refines his
ideas into a usable proposal
 Measuring and comparing the consequences of
Alternative Solutions
• The next step involves a comparison of the quality and acceptability of various
solutions. The quality of a solution must be determined after taking into
account its tangible and intangible consequences. Tangible consequences are
those which can be quantitatively measured and mathematically
demonstrated. Intangible consequences are those which cannot be
quantitatively measured and mathematically demonstrated. So manager must
use his judgment intuition to solve the problem.
• Acceptability of a solution is more important than quality. Difficulties generally
arise when a solution, through good in quality is poor in acceptability or vice
versa.
• A manager should not only consider quality and acceptability from the point of
view of his own department but point of view of all departments. His failure will
result in lowering the attainments of other departments of total organization.
• An alternative may have not one but several possible outcomes, depending
upon the occurrence of external conditions (called states of nature) over which
the decision-maker has little or no control. In situation where enough
information is not available about the quality and acceptability of a solution we
should try in a small scale wide known as pilot testing.
 Converting the Decision into Effective Action and
Follow-up of Action.

• The next step is to translate the decision into action which requires
communication in clear and unambiguous.
• Employees acceptance of the decision should be taken into
consideration.
• If any opposition or resistance arise by the employees steps should
be taken to win their cooperation.
• We should take a the view of employees decision in certain areas to
make their participation of whole hearted.
• Moreover it will help improve the quality of the decision by reveling
points overlooked by the manager and uncovered obstacles in the
way of its execution.
• As a safeguard against incorrect decision while manager converting
into effective action, should institute a system of follow up.
 Herberta.Simon compresses the
above steps into four principle
stages.
• Intelligence- Searching the environment
for conditions calling for decisions.
• Design- Inventing, developing and
analyzing possible course of action.
• Choice- Selecting a particular course of
action from the available alternatives.
• Review- Assessing past choices.
THANKS