Rational Decision Making in the Pharmaceutical Industry

2075 WordsMar 18, 20119 Pages
Decision making may be regarded as the voluntary choice between the viable available options using judgement so as to reach agreement on a course of action. This is central to the organization; it underpins and directs organizational activity leading inevitably to its successes or failures. Of key importance to decision making is the relevance of or lack there of, of rationality. The question however to be asked in order to answer this question is what is meant by “rational” and how can one substantiate that decisions made does follow the rational ideal or not. One must also ask why would organizations choose or be forced to take decision choices other than what is evidently rational or logical. In the exploration of why decision makers…show more content…
Behavioural decision theory implies that, because attractiveness promotes wishful thinking and articulation enhances vividness and availability, the more a strategic option is discussed, the more certain is it that an option is apt to appear increasingly attractive and to raise the aspirations of executives considering it. Such was the case with BMD, the subject of chapter 2 of the reader by E K. Valentin. The judgement of executives may be further distorted as they seek confirmation bias, which entails the seeking of data to support emerging or firmly entrenched commitments and beliefs while avoiding contrary information. In doing so, options put forward for decisions although not necessarily rational or in the interest of an organization, are made into decision hinged on political aspirations and miscalculations. Wishful thinking occurs when the probability of a specified event is overestimated because it is desirable or that has been described in colourful detail tend to be perceived as likely more that factual for example as is the case with decisions about patent protection in the pharmaceutical industry. Patent protection is also a key aspect of decision making in the pharmaceutical industry. Patent protection is a legal guarantee that the product’s profitability will be protected from open
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