The Concept of Decision-Making

Decision-making is part of people everyday life and they powerfully influence the life of others. On the other hand, their lives are depending upon the position of decision-makers. The understanding of the decision-making practices could help in avoiding bad decisions and maintaining good decisions. Their understanding of decision-making is more convincing are not demanding humans to be an irrational being. The development is traceable from economic rational creature through bounded rationality to the approaches of decision-making. Competent leaders utilize rational decision-making processes to recognize the problem and solutions, evaluate alternatives in respect to decision-making (Cascetta, Carteni, Pagliara & Montanino, 2015). This essay shall also make effort to address the concepts of rationality versus reality in decision-making. In the following, an effort has been made to discuss this broad theme and state the discipline will be adopted for the study of decision-making.  

In rational decision-making leaders, analyze the problem to accomplish the most effective choice through different potential alternatives before making a decision. The senior managers utilize their capability to identify a competent person and take important decisions without adequate analysis. Any decision-making situation needs to define a problem, identification of standards, documentation of standards according to preferences, assessment of alternatives and finally, selection of alternatives with the maximum value (Sen, 2017). Bounded Rationality is utilizing sufficient information to gain a suitable decision rather than the best solution (Snead, Magal, Christensen & Ndede-Amadi, 2015). While favourability of the solutions is been the major concern of decision-making, as it is seen that reality in decision-making satisfies under bounded rationality conditions. It favors objective data and a formal procedure of analysis over intuition and subjective. This model of the rationality of decision-making predicts that the decision maker has the perfect information, resources, and has cognitive ability to evaluate each alternative against others. The people will make choices that will maximize benefits and minimizes cost. For instance, many people want to get the most valuable products at the least possible price and benefits of a certain product.  This model makes unrealistic assumptions, particularly about a person’s capability to possess information for making decisions. Individual rationality is restricted by their capability to conduct analysis and reflect through competing alternatives. The more complex a decision, the greater are the limits to make rational choices (Hoefer & Green Jr, 2016). Researchers in decision-making have identified three categories, which seem to influence the way people make decisions: Representative heuristic, adjustment, Availability heuristic, and anchoring. In the case of representative heuristic, make the decision-maker evaluate the possibility of occurrence of an event depends on experiences of similar events. The initial value considerably influences the procedure of the adjustment irrespective of the rationality in the alternative of the initial value. The availability heuristic is probably to be available in the memory of heuristic of the decision maker (Groeneveld, Müller, Buchmann, Dressler, Guo, Hase & Liebelt, 2017).

Rational Decision-Making and Bounded Rationality

The reality in decision-making lies in the aspect of everyday conditions, as decisions are part of broader activities, which decision maker try to achieve. The decision-making was going on outside the meaningful relationship, as in reality, it is the point of accomplishing the broader objectives. It has been noted that decisions are part of the larger tasks comprising of the issues identification, acting for goals achievement, and understanding of meaningful solutions, and effects assessment. Decision making, in reality, is the aspect of maintaining and guiding the constant movement of behaviour focussed towards the set of objectives and not set of alternative dilemmas. It is frequently affected by the structure of the business and environment than by system itself. It is a combined function of people experience and knowledge appropriate for the task (Calabretta, Gemser & Wijnberg, 2017). It is frequently going on in stressful situations. It is mainly caused by time pressure, threat, conflicting or incomplete facts, negative physical conditions, interference, performance pressure, team coordination, multi-information sources, high workload, and rapidly changing the environment. They determine conditions and factors in decision-making, which frequently decide the type of the decision and their outcomes. The reality is affected by various factors i.e. cultural and social background, which influences the connection among people, included in the process of decision-making and delivers the cultural framework to operate comfortably. About the structure of the organization, various factors alter the reality of decision-making in the organization. The amount of time available to make a decision for a given problem is determined by the environment. Ideal decision-making and the decision theory are disposed to picture the process, as one in which it is free of restrictions of resources and time operate by them. The reality of the decision-making process is a range of practical concern positively influenced by the cultural, organizational, and social environment (Li, Ashkanasy & Ahlstrom, 2014).

With the broad theme of Rationality versus reality in decision-making, there are significant problems in studying the nature of decision-making. From the description, it is agreed that decision-making is a part of life, survival, and success. With respect of decision-making, the influence of distress on people has been shown to affect the manner in which people identify situations, the level of decision risk tolerance, the motivation, and the nature of the information people exhibit. It has identified both positive and negative impacts, which reflects the mood that tends to be stable over time (K. Roehrich, Grosvold & U. Hoejmose, 2014).

Factors Influencing Decision-Making

People high in positivity tend to deliberate alertness, encouragement, and enthusiasm. These influences are probably less stable, predictable, and reliable and are stronger to the decision-making process. It is based on scientific data that permits decision-making, reduces the probabilities of distortions, guesswork, errors, biasness, assumptions, and all main causes of inequitable or poor judgment (Harvey, Madison, Martinko, Crook & Crook, 2014). Such a knowledge and information based theory encourages high quality and reliable decisions and reduces the uncertainties and risk linked to decisions. This approach influences the decision-making method with reliability, discipline, and logic.  It also allows the decision-maker to reach at the optimal conclusion. The methodology satisfies to addressing complex issues and considering all concepts of the issue with all potential solutions before making a final decision. This approach can likely to perceive risky situations effectively and efficiently with perceptions of work attitude and job performance (Leder, Horlitz, Puschmann, Wittstock & Schütz, 2017).  

People high in negativity tend to have a poor outlook, dissatisfaction, distress. This approach needs careful consideration and reflection of information, data, and consumes time, which makes unsuitable for fast decisions. Moreover, delay in making and executing a decision may leads to reduction in the perceived benefit of such an alternative solution. As such, this approach utilizes mostly in making policy decisions and long-term rather than short-term operational decisions. It tends to affect more systematically, analytically, and prone to make biased choices when decisions are more relevant to the decision maker (Joseph-Williams, Elwyn & Edwards, 2014).  

Rationality versus reality in decision-making permits for making an informed and structured decision, and reduces the risk of failures in the organization. In addition, most of the time success and survival depends on being the pioneer in the field, which may find wide acceptance. The unavailability of information or data causes decision-makers to choose for more conventional and secure alternatives. It can help them to deal with severe problems in a difficult environment.  It also enables effective leaders the opportunity to develop their skills and capability in problem-solving and appropriate decision-making. It always applies a clear understanding and thought process to all decision making processes in leadership situations (Cheung & Heine, 2015).

Attribution theory delivers a framework to evaluate the decision process and predicted to make stronger desire, ability, and optimize to make a potential contribution. Among the existing disciples, ethics is adopted for the study of decision-making as many business decisions are expected to affect shareholders in different ways and will express ethical values. It is expressed that ethical decisions are more profitable and the outcome of those decisions are made an important difference in their lives and to the life of others. Ethical decision-making is significantly involves in a relationship with employees, customers, shareholders, and suppliers. This involves decision in its ethical, social, and professional behaviour context (Yacout & Vitell, 2018). Social expectations of profession and professional code of conduct are taken to be the norms, values, and principles. They address ethical decision making in business as providing the goals and objectives for right conduct. It is argued that both forms of utilitarian evaluates individual actions and decide the morality of a decision by predicting its situations. Ethical decision-making can be effectively used to bring success and growth in organizations. It is predicted that employees should not make rational decision-making, as reality is more powerful. Ethical behaviour and decision-making are expected from a position of trust. The decisions are made through informed lens and concepts such as values, intuition, and experience. It focuses mainly on the contribution of the matters that are associated with the attribution dimensions of the concerned organization. It is evident that rationality versus reality in decision-making is a concept for understanding effective decision making, which is beneficial and profitable for the organization (Levitt, Farry & Mazzarella, 2015).  

References

Calabretta, G., Gemser, G., & Wijnberg, N. M. (2017). The interplay between intuition and rationality in strategic decision making: A paradox perspective. Organization Studies, 38(3), 365-401

Cascetta, E., Carteni, A., Pagliara, F., & Montanino, M. (2015). A new look at planning and designing transportation systems: A decision-making model based on cognitive rationality, stakeholder engagement and quantitative methods. Transport policy, 38, 27-39

Cheung, B. Y., & Heine, S. J. (2015). The double-edged sword of genetic accounts of criminality: Causal attributions from genetic ascriptions affect legal decision making. Personality and Social Psychology Bulletin, 41(12), 1723-1738

Groeneveld, J., Müller, B., Buchmann, C. M., Dressler, G., Guo, C., Hase, N., & Liebelt, V. (2017). Theoretical foundations of human decision-making in agent-based land use models–A review. Environmental modelling & software, 87, 39-48

Harvey, P., Madison, K., Martinko, M., Crook, T. R., & Crook, T. A. (2014). Attribution theory in the organizational sciences: The road traveled and the path ahead. Academy of Management Perspectives, 28(2), 128-146

Hoefer, R. L., & Green Jr, S. E. (2016). A rhetorical model of institutional decision making: The role of rhetoric in the formation and change of legitimacy judgments. Academy of Management Review, 41(1), 130-150

Joseph-Williams, N., Elwyn, G., & Edwards, A. (2014). Knowledge is not power for patients: a systematic review and thematic synthesis of patient-reported barriers and facilitators to shared decision making. Patient education and counseling, 94(3), 291-309 

1. Roehrich, J., Grosvold, J., & U. Hoejmose, S. (2014). Reputational risks and sustainable supply chain management: Decision making under bounded rationality. International Journal of Operations & Production Management, 34(5), 695-719

Leder, J., Horlitz, T., Puschmann, P., Wittstock, V., & Schütz, A. (2017). Comparing immersive virtual reality and powerpoint as methods for delivering safety training: Impacts on risk perception, learning, and decision making. Safety Science, 111, 271-286

Levitt, D. H., Farry, T. J., & Mazzarella, J. R. (2015). Counselor ethical reasoning: Decision?making practice versus theory. Counseling and Values, 60(1), 84-99

Li, Y., Ashkanasy, N. M., & Ahlstrom, D. (2014). The rationality of emotions: A hybrid process model of decision-making under uncertainty. Asia Pacific Journal of Management, 31(1), 293-308

Sen, A. (2017). Rational behaviour. The new Palgrave dictionary of economics, 34(6), 1-14

Snead, K. C., Magal, S. R., Christensen, L. F., & Ndede-Amadi, A. A. (2015). Attribution theory: a theoretical framework for understanding information systems success. Systemic Practice and Action Research, 28(3), 273-288

Yacout, O. M., & Vitell, S. (2018). Ethical consumer decision?making: The role of need for cognition and affective responses. Business Ethics: A European Review, 27(2), 178-194