The Meeting of 'Gut' and "Head' Essay

Managers within organizations are faced with the challenges daily of making excellent decisions. In everyday life we are challenged in making sound decision, decision that will last for a life time. Folk often wonder after making a decision if it was the right choice, will it affect the people around me, was this a good choice for my family, and will the decision affect them. In order to be an effective manager you have to possess the skill of outstanding decision making skills. In order for one to be successful within their personal life they may also need to possess an understanding of effective decision making. The decision- making process should be one that makes a positive change. Can the decision making process work

The decision making process includes cognitive processes that eventually lead to a choice in action while taking into consideration the alternative possibilities (Allen, Dorozenko, & Roberts, 2016). Not all choices have to lead to an action. The values and preferences of the person making the choice also comes into play when making the final decision. Problem-solving to obtain a certain goal or satisfactory by a solution is the main reason people go through the decision making process (Stefaniak, & Tracey, 2014). This process has many factors that end with one final result or solution. The decisions made can be rational or irrational and can be determined by explicit or tacit knowledge (Qingyao, Dongyu, & Weihua, 2016). Since the decision making process can be very difficult at time, psychologists have viewed the process in different perspectives to get a better understanding (Rossi, Picchi, Di Stefano, Marongiu, & Scarsini, 2015). The different perspectives include; psychological, cognitive, and normative or communicative rationality.

Kahneman’s article is an analysis of intuitive thinking and how it guides our decision-making. Although primarily aimed at the field of psychology, it is an interdisciplinary article with applications in economic theorising. Kahneman attempts to differentiate between two systems of thought, one of intuition (system 1) and one of reasoning (system 2), and argues that many judgements and choices are made intuitively, rather than with reason (a slower and more deliberate process). Intuitive decision making, which encompasses heuristics, although generally more efficient and rapid, makes the agent potentially subject to errors due to framing effects or violations of dominance. The analysis of the studies and theoretical situations also provides criticism of the commonly held model of the rational agent within economics. The article also further conceptualises Kahneman’s theory, the Prospect Theory (Kahneman & Tversky, 1979), which has descriptive applications of people’s choice in decision-making situations involving risk and known probability of outcomes. These situations are typically unexplained by the more normative rational agent model.

It feels as if we rarely have situations with sufficient data to make decisions clear and absolute. Maybe those situations do occur frequently, but because they are obvious, we don’t even register them as decisions. Leadership hinges on effective decision making and judgement calls. That includes gathering information for analysis when available, but also recognizing how not to be caught in analysis paralysis. Effective leaders constantly evaluate the situation, recognize the benefits, risks, and constraints and move forward. Nothing impedes an organization more than inability to commit to a path forward.

Rational decision is a state of being agreeable to reasons. The correct decision is not just reasoned but it is also optimal for solving a problem. Mr Weekes, the operation manager, employed series of analytical steps to review possible outcomes for problems by discussing it with managers to come up withdevise particular courses of action.

Rohrtech’s Board did effectively use rational decision-making paradigm at the end of the case when they decided to replace Devine with O’Grady as chief operating officer. The decision does not appear to be taken with much thought but the best solution was definitely not found. The rational decision-making paradigm cannot easily be applied to reality because people cannot be perfectly rational (McShane, Steen, & Tasa, 2015). The Rational Choice Decision-Making Process outlines a

A further aspect of leadership, which can also be believed to have a direct link with communication, is decision-making. Both leadership styles are similar in the way that ideas need to be stored before making a business decision. In an autocratic work place “decisions are made independently with little or no input from the rest of the group” (Riley, 2012 n.p.). However, in a democratic society “employees have greater involvement in decision making” (Riley, 2012 n.p.). Both these types of leadership have their benefits and disadvantages with respect to decision-making. In his research on different types of leadership, Joseph, (n.d.) stated that autocratic leadership style could be effective in a business environment as decisions can be made quickly without consulting with workers. According to Cherry, (n.d.) this type of leadership would be advantageous in situations such as the military where decisions need to be taken quickly. Though quick decision-making can be beneficial, it could be argued that it can lead to a demotivated workforce. Employees’ motivation decreases

The rational decision-making model describes a series of steps that decision makers should consider if their goal is to maximize the quality of their outcome. In other words, if you want to make sure that you make the best choice, going through the formal steps of the rational decision-making model may make sense. The following are the steps taken to come to a rational decision: 1. Identify the problem, 2. Establish decision criteria, 3. Weigh decision criteria, 4. Generate alternatives, 5. Evaluate the alternative, 6. Choose the best alternative, 7. Implement the decision, 8. Evaluate the decision.

The concept of ‘rationality’ has been talked through the centuries. According to Grey (2013), rationality is a big question because of this proposition which has the meaning and difficulties seem to be defining of a whole set of issues which have resonated through both organisation theory and practice ever since. And rationality is the basis of a decision, rational decision makers are objective and logical, they reach the goal that maximises the value. Not only rationality is important to organisations, and also it can be identified in various kinds of management theories. This essay will introduce the different aspects of the concept of ‘rationality’ and make explanations that how these are recognised in different management theories.

Leader’s choices and actions are the result of the leader’s experiences (Bennis & Goldsmith, 1997). Leadership in organizations is driven by uncertainty. How leaders make decisions based on that uncertainty determines the performance of an organization (Hatch, 1997). Decisions are made on the basis of information available about various environmental variables. However, the variables are many and complex in nature. They may be related to political, economic, social, or other unknown variables. It is not possible to study all such variables in depth because of inadequate information or data. This leads to inaccuracy in decision-making.

A study published in the winter 1997 volume of Business Strategy Review suggests the major factor in a decisions success is the decision process itself. The study, by Paul Nutt, suggests that poor decision making

Effective decision-making is very important on how probability can be applied therefore effective decision-making must be rational. As mentioned before, people who are deciding rationally are attempting to reach goals in a systematic way. They make sure

Parker’s budgeting decision is a good example of an individual acting with bounded rationality. This term was introduced by Simon in 1957 (as cited in Tolbert & Hall, 2008) to argue that normative models of decision making, which assume fully rational and objective judgement (Teale, Dispenza, Flynn & Currie, 2003), are unrealistic because human rationality is limited. Parker’s judgement may have seemed rational to him, but it was not rational for the organisation, a subtle distinction about rationality made by Storing (as cited in Tolbert & Hall, 2008). Parker’s judgement was also not rational in that he did not have all available knowledge and awareness of risk, which are the conditions of normative models (Teale et al, 2003) and the “official theory” of management (Anthony, as cited in Teale et al, 2003, p. 14). For example, Parker did not know about the variations in the terrain when he made his decision, and he also assumed that the assistant workers could work at the same physical rate that he could. Both of these limitations were factors resulting in a risk to on-time task completion.

This report will discuss about the approach to rational decision making process. It discusses how an everyday problem faced by management can be tackled by using

Neil Hastie’s belief that most organizations decision making is a lot of trial by error. In a sense that could be true, but good decision making comes from the top and makes it way down. Let’s not lose sight on what decision making really is; finding a logical choice of decisions from available options. A CEO or even management of any kind of organization would have to be good at decision making. If you were to turn Neil’s statement about decision making into a positive one, then one would agree that an organization or whoever is running the organization would need to keep an open-mind. Keeping an open-mind would include training, presenting timely information and everyone’s wide assortment of data-mining tools. (Haag & Cummings, 2009).