Drawbacks That May Result from the Rational Models - Literature review Example

Although Rational Decision-making Models might Suggest what People ought to do, they are a Poor Guide to what People Actually do Rational decision-making models receive recognition as an effective guide to decision-making. Many leaders face the compulsion of relying on such models in an effort to make wise decisions that have maximum benefits to the organization. The rational decision-making models qualify as scientific approaches to decision-making that rely on a multi-step process in an effort to identify the best solution. According to Laing (2013, p. 65), rrational decision-making relies on rigorous research as well as analysis of the available information and facts before making the final decisions. Many companies place emphasis on the efficiency of rational decision-making models because of the fact that they have their basis on facts. Although it is debatable how much information and facts proves sufficient in the rational decision-making models, proponents argue that the establishment of facts serves in the elimination of some alternatives while leaving the ones that present multiple benefits. Without doubt, the rational decision-making models have been in use for quite some while, and many critics of these models have highlighted some of the drawbacks associated with rational decision-making. Woiceshyn (2011, p. 315) highlights that, proponents of the rational decision-making model have highlighted that the initial step, which is identification of the problem is of critical importance. There is a salient need for leaders and managers abiding by this model to identify the specific problem at hand. Failure to identify the specific problem is a sign that an effective solution may prove impossible. All the facts surrounding the problem need proper recognition. When managers understand the problem clearly, it becomes easier for them to move to the next step. The second step in rational decision-making models is identification of the decision criteria. After identification of the problem, leaders and managers should be able to define descriptive traits or qualities as well as criteria that should define the way forward. Decision criteria are often variables that significantly affect the outcome of the decision-making process. All the stakeholders of the organization need proper consideration in the identification of the decision criteria. For example, a company should consider how a certain decision is likely to affect the employees, the customer, the quality of the products and the services as well as the changes in its reputation. Identifying these variables is highly important because it determines the factors that define the direction of decision-making. Martin and Parmar (2012, p. 300) asserts that, usually, organizations define decision criteria depending on organizational culture, values, and ethics. Therefore, different organizations or individuals making decisions may identify a diverse range of variables for a similar problem. After the identification of the decision criteria, the decision makers embark on allocating weights to each identified criterion. This step involves creating a priority list that identifies the most important variables in accordance with their effects. For example, a company may rank the effect on customers as a priority depending on how the decision is likely to alter the customer perception of either the organization or its products. After allocation of weights to the criteria, decision makers develop a range of alternatives, which represent potential solutions to the identified problem. A rigorous brainstorming exercise is of critical importance in the identification of alternatives. The next step focuses on a critical evaluation of the identified alternatives. The decision makers should consider the consequences of each alternative identified. The final step involves the identification of the best alternative for those evaluated. Usually, organizations may choose to indulge in intensive research in the identification of the criteria as well as the alternatives. The six steps highlighted above only form the outline of the rational decision-making models as highlighted by Hyyrylainen and Viinamaki (2008, p. 1223). According to Daft (2011, p. 220), the main objective of rational decision-making models is to provide decision makers, especially leaders and managers with a guideline that they can rely on during the decision-making process. Notably, leaders face the compulsion of making critical decision regarding the organization. Evidently, the decision that leaders make have far-reaching effects on the organization and its stakeholders. Therefore, there is the pressure of making the best decision that will present maximum benefits to the organization and its stakeholders. Rational decision-making models emerge as a form of help to leaders who faced confusion when under the pressure to make decisions. These models define specific steps that leaders can take in the process of decision-making. Depending on the problem identified, decision makers need to search for relevant information that will influence the final decision. Rational decision-making models demand that decisions should depend on facts and relevant information. As highlighted by Rahman and de Feis (2009, p. 48), some decision makers may indulge in statistical analysis, modelling analysis, and other quantitative techniques in an effort to identify the best alternative for the problem at hand. The procedure followed in rational decision-making proves to be sequential with each step proving to be important for the e next one. These structured forms of decision-making help some leaders to have a clear definition of the way that they make decisions. Proponents of rational decision-making models opine that following this sequential approach serves to minimize errors, assumptions, and distortions. Moreover, rational decision-making models purpose to register consistency, reduce the potential risks as well as uncertainties that may emerge from some alternatives. The alternatives identified as the final decision presents the minimal risks and uncertainties and the maximum benefits in accordance with the criteria identified. Business leaders face the compulsion of making ethical and rational decisions because they are well aware of the fact that their decisions will have multiple implications, especially for customers, competitors, shareholders, employees, and even suppliers. If they make wrong decisions, the negative effects will result, a factor that can compromise their individual reputation and that of the organization, these explains why many business leaders have been receptive of the rational decision-making models because they appreciate the fact that these models promise a measure of consistency and logic. Leaders who need to exhibit accountability often prefer the rational decision-making models in an effort to exhibit discipline and evaluate different risks critically before making a decision. Worth noting is the fact that following the rational decision-making models, requires time and a rigorous consideration of a diverse range of data. According to Malakooti (2012, p. 748), the steps described above need time if the models are to be effective. Opponents of the rational decision-making models opine that some business decisions are often quick decisions. This introduces a sense of urgency in the decision-making process. Without doubt, the sense of urgency contradicts the time required for a step-to-step approach as outlines in the rational decision-making models. Businesses face the compulsion of seizing opportunities just as soon as they emerge, before competitors take advantage of them. This explains why many business leaders have eventually made poor decisions if they opt for the rational decision-making processes during such urgency. Individuals who have excelled in propelling their organizations to success have highlighted that there were times when they took risks. This means that leaders may often make decisions that seem risky in accordance with the rational decision-making in the hope that such risks will be beneficial to the organizations. This compels such leaders to rely on their instincts rather gather information before they choose to take advantage of an opportunity. Moreover, the business front requires innovation if organizations are to remain with a remarkable market share. This means that business leaders may choose to launch new products in the market without any prior analysis of the consequences of launching a new product. Evidently, launching a new product into the market seeks to satisfy a specific need identified in the target market. As highlighted by Holton III and Naquin (2005, p. 270), it is impossible to have adequate information of data that can determine the reception of the product by the customers before its official launch. In such situations, the rational decision-making models may serve to hinder some leaders and mangers from venturing into new products and services. Therefore, it is evident that there are some situations, which the rational decision-making models prove insufficient if the leader has to make the best decision. Critics of the rational decision-making process have highlighted that it focuses on profit maximization and bottom-line orientation. Many business leaders will only consider the potential returns in terms of profits when making a decision and justify it accordingly. However, rational decision-making models often fail to consider human relationships. Organizations that focus on the rational decision-making model have often become profit minded without considering the organizations relationships with all its stakeholders. If the rational decision-making model eliminates the value of interpersonal relations, it may eventually disregard the intellectual capital of the organization. Emerging research findings place emphasis on a combination of both rationality and intuition in decision-making as highlighted by Zaraté and his colleagues (2008, p. 78). Moreover, moral principles deserve a place in decision-making if it is to produce the best effects. Rational decision-making models place emphasis on the use of information in an effort to evaluate different alternatives that can serve as a potential solution to the problem. However, this means that rational models often assume that decision makers have the access to sufficient information on evaluating the alternatives. However, the reality is that decision makers lack access to all the relevant information and knowledge of the facts that surround problems. There is evidence that decision makers cannot gather enough information that can make them analyse future consequences of a certain alternative. Therefore, rational decision-making models cannot allow decision makers to settle for the optimum solution. According to the bounded rationality theory, it is impossible for a decision maker to identify the optimum solution because the available information is often limited. In addition, decision makers do not have sufficient time to analyse different alternatives and their consequences. As highlighted by De Vos (n.d, p. 440), the emphasis on rationality is contrary to the real capacity of human beings to use their cognitive abilities. Therefore, the level of rationality only depends on the cognitive ability of the decision makers. This means that a rational decision to one individual may represent the worst option for another individual. Actually, several human factors serve as limitations for effective rational decision-making. Therefore, many leaders following this model may end up making poor decisions based on their perceptions of economic and social factors and their personal ethics. Without doubt, human beings are unable to achieve rationality of a high level because biases and personal beliefs often cause illusions hindering rationality and the level of logic. This only means that rational decision-making models have their limits. They may not prove to be dependable in some certain critical situations. McCaughey and Bruning (2010, p. 48) assert that, when a decision maker allows personal beliefs and biases to overshadow rationality, then the decision made is not rational. Many of the decision makers do not realize that their personal belief systems affect their perception of issues. Researchers have highlighted that human beings only seek to maximize utility. Other researches have proved that utility is highly subjective. This serves as a drawback for rational decision-making because of the subjectivity of utility. In addition, Lewis (2007, p. 68) highlights that, in a team of decision makers, a crisis may arise because each decision maker vies the alternatives differently. Each of the decision makers may be seeking self-interests, a common aspect that defines the behaviour of human beings. Even if that is not the case, their views of utility maximization may be very diverse. There is evidence that many decision makers following the rational decision-making model only settle for the minimum acceptable solution as long as the decision maker identifies one effective solution, then decision-making follows. This proves to be a challenge in a complex problem, which depends on multiple variables. In such a case, it may prove extremely difficult for the decision makers to evaluate the potential solutions that take into considerations the entire variable involved. In such a situation, lack of information inadequate time and increased costs hinder the effective evaluation of the alternatives. Therefore, decision makers settle for poor choices because of the limitations above. As highlighted by Morçöl (2007, p. 78), other problems require solutions that incorporate multiple goals. Effective decision-making in such cases requires that the final decision should represent a simultaneous maximization of all the goals. Such cases may prove to be highly difficult because a diverse range of information is required as well as a high level of rationality. In accordance with the bounded rationality theory, it is impossible for human beings to exhibit remarkable rationality and they often have limited access to information. Other situations that prompt leaders to make poor decisions when making rational decisions are those involving problems and alternatives that may pose effects on a diverse range of areas. For example, some decisions may present positive benefits to the profits of an organization while having an adverse effect in a different department of the organization. Such a situation may confuse the decision makers prompting them to overlook the critical adverse effects that may result from a decision. For example, leaders may opt for an alternative that is cost effective to the organization, and overlook future effects of such a decision. As identified by Baur (2013, p. 563), there are cases of organizations that have made such decisions and regretted in the future. The same decision may present adverse effect to the organization after a while compromising its business and reputation. This means that, the rational decision-making models may not be as effective as proponents have presented them to be. After a close analysis of the rational decision-making model and the drawbacks that may result from the rational models, it emerges that leaders need to rely on a variety of decision-making models depending on the situation. Evidently, there are situations that work perfectly well with the rational models. However, decision makers should be well aware of the limitations of these models. Moreover, some decisions require leaders to use their personal experience and intuition, proving the rational model ineffective. 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