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Rational and irrational decision is best for the organization - Research Paper Example

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While rational decision making refers to the process of reaching a decision through a well thought-out and reasoned process, irrational…
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Rational and irrational decision is best for the organization Grade (10th, Nov. Rational and irrational decision is best for the organization
There are different situation where either rational or irrational behavior can be applied to suit the management decisions of an organization. While rational decision making refers to the process of reaching a decision through a well thought-out and reasoned process, irrational decision making refers to the process of making a decision without reasoning or without a clear mental analysis and judgment (Knights & Willmott, 2007). The situations where rational decision making is appropriate for a manager include:
Policy and rules formulation
Under circumstances where the rules and policies that will guide the operations of an organization are formulated, rational decision making is required (McGrew & Wilson, 1982). This because, formulation of rules and policies requires that the relationship between the organization and its stake holders, as well as its relationship with the outside world is well defined. This being the case, it becomes vital for the process of formulating such rules to apply the rational decision making model, where the issue at hand is clearly defined, the possible problem areas identified, alternatives weighed and a final decision reached (Niu & Zhang, 2009). Additionally, such a situation warrants rational decision making, since the policies and rules formulated form the basis of the organization’s operations.
Dispute resolution
This is yet another situation that calls for managers to apply rational decision. The process of resolving a dispute highly determines the welfare of the parties involved. Thus, reaching a decision that is not well evaluated and reasoned-out can be detrimental to the parties involved (Ariely, 2010). Therefore, it is essential that all the necessary procedures are followed while making such decisions, to ensure that the dispute is resolved amicably, without jeopardizing the interest or welfare of any of the parties involved. Thus, dispute resolution is an aspect of management where rational decision is not an option (Niu & Zhang, 2009).
Nevertheless, there are circumstances under which irrational decision is best for the organization. Such situations include:
When there are no alternatives
In a situation where a manager is faced by circumstances that dictates that he/she has to act in a certain way only, then irrational decision becomes the best for the organization (Ariely, 2010). For example, during a fire breakout within the organizations premises, the manager has no option but to let the employees free for their safety. This is because; the manager does not have an alternative of retaining the workers within the premises as he/she contemplates on the next move (Knights & Willmott, 2007). Another situation is when the business has to continue running, yet the available supplies comes at a higher price than normal, and there are no alternative supplies. The manager has to take them at such prices, since there lacks an alternative, meanwhile he/she contemplates on where to find cheaper subsequent supplies (Ariely, 2010).
Where the cost of evaluation exceeds the benefits
When the cost of formal and rational process of decision making is higher than the benefits obtainable, irrational decision is best for the organization (McGrew & Wilson, 1982). For example, while making a decision about repairing a window pane, yet the cost of convening a meeting will cost tea, travel and sitting allowances for the decision makers.
Ariely, D. (2010). Predictably irrational: The hidden forces that shape our decisions. New York: Harper Perennial.
Top of Form
Knights, D., & Willmott, H. (2007). Introducing organizational behaviour and management. London: Thomson Learning.
Bottom of Form
McGrew, A. G., & Wilson, M. J. (1982). Decision making: Approaches and analysis : a reader. Manchester: Manchester University Press in association with the Open University.
Niu, L., Lu, J., & Zhang, G. (2009). Cognition-driven decision support for business intelligence: Models, techniques, systems and applications. Berlin: Springer Verlag.
Watson, S. R., & Buede, D. M. (1987). Decision synthesis: The principles and practice of decision analysis. Cambridge [Cambridgeshire: Cambridge University Press. Read More
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