![]() Managers often don’t have access to all the information they need.Early alternatives and solutions are quickly adopted because of perceptual limitations.This is the version of decision making that occurs most often in organizations, because the assumptions of this model are much closer to the truth: The bounded rationality model assumes numerous organizational and individual factors restrict rational decision making. ![]() And that’s why we have the bounded rationality model. But we know that those assumptions can’t all be met. In a perfect world, where all of those assumptions are met, this model is how the decision making process works best. Managers are capable of eliminating misperceptions and biases.Managers are looking to make the best possible decision.Managers are aware of all alternative options and are equipped to evaluate them properly.Managers have all the information about the situation.The goal of the rational decision making model is to eliminate possibilities for error and biases. You make a plan to check in at the thirty day mark to see if customers’ ratings have improved. You get the budget approved and post for those two jobs. You decide to hire the two additional members for the housekeeping staff, understanding that your customers view quality in clean rooms and common spaces. ![]() A member of your operations team has suggested providing a continental breakfast for business travelers in response to the increase in that customer type. One of your employees has suggested two additional members for the housekeeping staff, as the current level of staff is having difficulty keeping up with the increase precipitated by an office building opening up down the street. Every employee suggestion, every operations recommendation should be in front of you, and you consider each option carefully. Once you have all your alternatives on the table, you can start to make a choice. You wait on operations for recommendations on extra perks. You look over your employees’ reports on quality. You ultimately want to create a lengthy list of alternatives and not decide on one too quickly. And maybe you consult with operations on additional perks that can be incorporated into the guest experience without giving away too much margin. Perhaps you decide that all customer-facing staff report daily on quality issues. This is the stage where you look to determine and understand the root causes of your issue. Your objective is 100% happiness, 100% five-star ratings. You don’t want to see customers complaining about anything online. What criteria will your solution have to meet? Clearly, you want to start getting better ratings from customers. They no longer feel they’re getting good value for their money. It turns out that customers’ unhappiness coincides with a recent increase in rates. You and your team sit down and read the last twenty or thirty customer reviews on three different travel sites. ![]() You need to find a way to earn better customer ratings. This will surely damage your team’s efforts to generate new business. Customers are rating their experience at your property online, and they’re not happy. ![]() Let’s start right at the top of the rational decision making model. You need to make a decision about next steps to solve this issue. Suddenly, you notice that customers are rating your property two and three stars instead of the customary five stars you and the team are used to earning. Let’s say that you’re the general manager at a nice hotel. There are eight steps in the rational decision making process: The model encourages the decision maker to understand the situation, organize and interpret the information, and then take action. The rational decision making model assumes decisions are based on an objective, orderly, structured information gathering and analysis. Let’s take a look at the five best known of those decision making models. That said, researchers have studied the decision-making process as much as anything else, and they’ve come away with some different ideas and models that help us understand how we can make decisions more carefully and successfully. Well, we wouldn’t be writing songs about making decisions if it were an easy task. When it comes to making a decision, in business or in life, how can you be sure you’re doing the right thing? Sadly, while they understand your pain, they don’t always sing you to the correct resolution. Literature, poetry and pop culture provide plenty of sympathy for your plight. If you’re struggling to make a decision, you’re in good company. “Two roads diverged in a yellow wood,” Robert Frost pointed out. “Should I stay or should I go now?” The Clash asked. “To be or not to be: that is the question.” Hamlet lamented. ![]()
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