Decision Making

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Group/Individual : Persuasion,decision,commitment -Rational Decision Making

Group/Individual Level

Persuasion, decision, commitment - Decision-making

Rational decision-making methods
A rational decision-making process is one that is logical and follows an orderly path from problem identification through to a solution. You need to be aware of three types of rational decision-making methods:

A rational, seven-step decision-making method: How to make a "perfect" decision

Define the problem. The first step in the technology adoption decision process is to define the problem, the need, or the opportunity. Although this may seem either trivial or obvious, quite frequently it is neither. Many of us have had the experience of essentially wasting days and weeks working to solve a problem and then finding out that various members of the group had different definitions of the problem leading to significantly different assumptions about the process. Everyone involved in the decision must have the same frame of reference in terms of the problem, the need, or the opportunity. It may even help to generate a formal problem statement.
Generate all possible solutions. The second step in the process is to generate all possible solutions. This involves active searches for information and alternatives. Group process techniques such as brainstorming and assigning someone to play "Devil's Advocate" are frequently helpful. Many new technologies get chosen and implemented without a thorough exploration of the alternatives. This can happen because the technology decision is dictated from a higher organisational level or because the new technology is perceived as the latest "thing" being used by "everyone." It is at this point in the process that technological gatekeepers become valuable. Information must be gathered from vendors and other users, at trade shows and from the trade and more academic publications. If you do not fully explore and become aware of your options, you cannot make an optimal decision.
Generate objective assessment criteria. After having clearly defined the problem, need, or opportunity and then gathering and exploring all of the relevant information and alternatives, you must then evaluate the information and the alternatives and anticipate the consequences of the various options open to you. It is very helpful at this point to establish objective criteria against which to compare the alternatives. This is also the point at which you need to establish the operational criteria against which you will measure the success or failure of the choice once implemented.
Choose the best solution from those generated in step 2 above, based on criteria generated in step 3 above. The fourth step is to select the best solution based on the evaluation and analyses conducted in step 3. Once the first three steps have been completed, this step should be relatively straight-forward. These four steps form the core of the rational decision-making method.
Implement the chosen alternative.
Evaluate the "success" of the chosen alternative.
Modify the decision and actions taken based on the evaluation done in step 6.

There are several assumptions, requirements or cautions for the success of the rational decision-making process that must be considered:

This process assumes that you have or can obtain adequate information, both in terms of accuracy, quality, and quantity, about the situation and the alternative technical innovations.

This process assumes that you have or can obtain substantive knowledge of the cause-and-effect relationships relevant to the evaluation of alternatives. In other words, it assumes that you have knowledge of all of the alternatives and all of the consequences of the alternatives.

This process assumes that you have or can generate a way of applying the values and interests involved in order to rationally and objectively judge the alternatives. That is, it assumes that you can somehow rank-order the alternatives or generate satisfactory decision-rules or criteria for choice.

We can derive, from these assumptions and requirements, several limitations of the rational decision-making model:

It requires a great deal of time.
It requires a great deal of information.
It assumes rational, measurable criteria are available and agreed upon.
It assumes accurate, stable, and complete knowledge of alternatives, preferences, goals, and consequences.
It assumes a rational, reasonable, non-political world.

The bounded rational process: A more realistic version
The rational decision-making model is also referred to as an optimising model of decision-making. Among its many assumptions is that there is a single, best solution that will maximise the desired outcomes. The bounded rationality model, however, suggests that people reduce problems and decisions to a level at which they can be understood. This model suggests that we interpret information and extract essential features, and then within these bounds, we behave rationally.

This process is also seen to be compromising, rather than as optimising. The decision-maker is assumed to choose a solution that is not quite the ultimately perfect choice or is assumed to choose the first solution that is "good enough" based on our limited capacity to handle complexity, ambiguity and information. The steps are basically the same seven discussed above, but it is assumed that we will not have perfect knowledge about all of the available alternatives or perfectly objective, rational and measurable criteria for choice or evaluation and feedback.

The Vroom-Yetton method of contingent decision-making
This method can be used to choose between individual and group decision-making strategies.

A good decision-making method under one set of circumstances, may not be considered so under other conditions. A classic contingency method of decision-making, was first proposed by Vroom and Yetton (1973) and later modified by Vroom and Jago (1988). The method suggests decision-makers should consider choosing from among five types of decision processes based upon a number of factors. The five decision process are:

Autocratic I (AI): Completely autocratic. You solve the problem or make the decision yourself using the information available to you at the present time.
Autocratic II (AII): Request specific information. You obtain any necessary information from team members/subordinates, then decide on the solution to the problem yourself. You may or may not tell subordinates the purpose of your questions or give information about the problem or decision you are working on. The input provided by them is clearly in response to your request for special information. They do not play a role in the definition of the problem nor in generating or evaluating alternative solutions.
Consultative I (CI): One-on-one discussion. You share the problem with the relevant team members/subordinates individually, getting their ideas and suggestions without bringing them together as a group. Then you make the decision. This decision may or may not reflect your subordinates' influence.
Consultative II (CII): Group discussion. You share the problem with your team members in a group meeting. In this meeting you obtain their ideas and suggestions. Then, you make the decision which may or may not reflect your subordinates' influence.
Group (GII): Consensual group decision-making. You share the problem with your team members/subordinates as a group. Together you generate and evaluate alternatives and attempt to reach agreement (i.e., consensus) on a solution. Your role is much like that of facilitator, coordinating the discussion, keeping it focused on the problem and making sure that the critical issues are discussed. You can provide the group with information or ideas that you have, yet you do not try to "press" them to adopt your solution and are willing to accept and implement any solution which has the support of the entire group.

Many people find this method is helpful, as it is prescriptive. In other words, if you answer the following seven yes/no questions in relation to the tree-diagram in the figure below, when you reach the end-point at the left, you will have chosen the appropriate decision-process from among the alternatives above. The seven questions must be answered in order from 1 to 7and followed across the tree-diagram from left to right:

Is there a quality requirement? Is the nature of the solution critical? Are there technical or rational grounds for selecting among possible solutions?
Do I have sufficient information to make a high quality decision?
Is the problem structured? Are the alternative courses of action and methods for their evaluation known?
Is acceptance of the decision by subordinates critical to its implementation?
If I were to make the decision by myself, is it reasonably certain that it would be accepted by my subordinates?
Do subordinates share the organisational goals to be obtained in solving this problem?
Is conflict among subordinates likely in obtaining the preferred solution?

Vroom-Yetton Decision-Making Method

For example, in the case where the quality requirement is low (e.g., the nature of the solution is not critical), you would choose the upper branch at point 1. If you then consider, in reference to question 4, that acceptance of this decision by subordinates is also not critical, the method suggests you should make the decision on your own (i.e., choose method AI). Alternatively at point 4, if acceptance is critical, you would consider question 5 regarding certainty of acceptance if you made the decision on your own. If people are likely to accept your decision, the method suggests once again making the decision on your own (i.e., AI). If, however, acceptance of your decision is not reasonably certain, the method suggests a consensual group method (i.e., GII) to help over come this.

[See related information in the Background Information on leadership.]

References
Vroom, V. H. & Jago, A. G. (1988). The New Leadership: Managing Participation in Organizations. Englewood Cliffs, N. J.: Prentice Hall.

Vroom, V. H. & Yetton, P. W. (1973). Leadership and Decision-Making. Pittsburgh: University of Pittsburgh Press.

(from http://www.implementer.com/implementer/web/step4_c/persuade-decrational.htm)

Since 27 Feb 2008