Managerial and Organizational Decision Making

MANAGERIAL AND ORGANIZATIONAL DECISION MAKING

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According to rational choice theory, managerial and organizational decision making cannot be regarded as rational as great progress has been made in the entrepreneurial sector by entrepreneurship scholarship hence the neoclassical model is challenged as it has many narrow assumptions (Brunsson, 1982). According to the theory it has resulted into slow progress due to persistence of rationality neoclassical assumptions. Rationality cannot be functional if the decisions made are used to implement actions. This has resulted to irrationality which is an organization behavior major feature. Decision making in organizations tend to be irrational and irrationalities are requirements necessary for actions in the organization. Decision making mainly involves deciding on one alternative action from others. The growth and establishment of organization has added society hierarchy hence forces outside the actors determines the actions. Decision making perspective in democratic conventions seems almost imperative (Riabacke, 2004).

Three common methods are used to explain irrationality behavior employed by organization to make decisions. The first is a chauvinist explanation which states that people cannot behave rationally even having studied. Hence, the decision makers need to have scientists' knowledge and brain capacities so as to behave rationally which is impossible. The second is from psychological research which shows that certain irrationality varieties are human being characteristics which are inherited and cannot be changed through training ( The University of Chicago Booth School of Business, 2010). Consequently, complete rationality cannot be achieved even by the experts and suggests that only through computer programs or mathematical formula can full rational can be achieved. Practical restrictions are the third way of explaining irrational behavior in decision making by the managers and organization. This method argues that the decision makers have either more information or incomplete information which cannot allow rational decision making.

Decision making processes should not be solely designed according to decision-internal criteria as the rationality norms as it aims at an action. Consequently, the decisions should adapt the external action criteria as successful and appropriate actions are not achieved through rational decisions. Actions are achieved from decision when motivational, cognitive and committal aspects are incorporated. Decision makers' commitments to specific actions in the organization are shown by the decision. Organization should provide social and motivational links to actions from decision as decision-action process is difficult and complicated when several people are involved to make decisions (Preston et al, 1992).

Enthusiasm and strong motivation are required to overcome physical hindrances during the decision-action process. Actions aspect include motivation, thinking and commitment but their importance may vary with situation depending on the decision-action maker time horizon, the change degrees involving the actions and the relationships power within the organization. Motivation becomes important when there is no information required for the prediction of the action results, great activities are important or when great negative results are anticipated (Preston et al, 1992). Meanwhile it would be less important when complex actions are anticipated hence require extensive actors' collaboration. However decision processes that are effective do not comply with the rational decision making rules in the rational choice theory. Consequently analysis should be done on few alternatives, actions with positive results are the only to be considered and advance objective formulation should be discouraged.

Irrational behavior can form bases for organizational actions that are good. According to the rational theory, evaluation should be done on all possible alternatives which in organizational and managerial decision making is impossible. This is because managerial and organizational decision making involves evaluation of various alternatives which have positive impacts on the action. In addition, decision makers are required to consider all alternative results that are relevant to make rational decisions according to this theory (Brunsson, 1982). Both the negative and positive results are supposed to get same attention. This procedure however elicits uncertainty and conflicts are stimulated among the decision makers. Meanwhile negative and positive results are difficult to weigh them together. Uncertainty can be avoided by seeking support for a given view about an alternative. Positive results searching of an alternative has great priorities and there is suppression of negative consequences. This helps to increase commitment and create enthusiasm apart from avoiding uncertainty (Dunham, 2010). For example, to undertake innovative product-development projects in a company with great inclination, the decision makers collected arguments instead of specific goals in most of their discussions. However enthusiasm for projects was created which was necessary for them to overcome the difficulties.

Alternatives and their results should be evaluated in the rational choice theory according to predetermined criteria and objective form is more preferred. In the model the decision makers are obliged to begin with objectives and later establish the alternative effects on them. This however poses as a dangerous strategy from action viewpoint as inconsistent objectives are likely to be formulated by the decision makers making alternative assessment difficult (Xin, 2008). Inventing of objectives after consequences is the better strategy for producing action which is irrational and employed by managerial and organizational decision makers. The objectives are arguments, motivation instruments and not for investigation or choice criteria. Situations where the objectives are left out after indication by data that decision makers would not be promoted by the actions is an evidence of the argumentative role of objectives (Carter, R. & VanAuken H, 2005). For example the merger of Sweden's three largest steel companies' calculations showed the alternative that was no-change would be profitable as the chosen alternative. The decision makers shifted to harbor criteria from the profitable criteria favoring the alternative chosen.

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