In the corporate world, managers are inundated with decisions ranging from daily operational issues to long-term strategic planning. For instance, developing new products, allocating firm’s resources, creating daily and weekly goals or establishing an advertising campaign. As a result of the rapid changes in the business environment, it is essential that managers understand different decision-making models. These models can range from rationalistic, scientific to less structured, perceptual, intuitive decision-making styles. In disagreement with the title, it is advised that managers consider both approaches when making decisions. Furthermore, knowing how and when to use both rational and perceptual approaches is critical for…show more content… Gigerenzer’s research explains in order to get accurate predictions; simple forecasting procedures should be adopted instead of general statistical methods (Gigerenzer 2015). In other words, a less structured decision-making model is preferred over complex ones. Both views are valid when considering quick decision-making and in situations that provides insufficient information. Occasionally, managers are required to make quick decisions or deciding under pressure; hence, perceptual decision-making is more suitable. A manager who has had experience with a similar type of problem can act quickly without having to rely on a step-by-step approach. According to Gigerenzer, the approach uses simple rules and makes short cuts that help to make decisions. While, rational decision-making, in this case, takes a longer time to conduct thereby is not appropriate.
However, perceptual decision-making is limited if it is the only approach used by the manager. The views of…contradict those of Ariely and Gigerenzer by suggesting perceptual or heuristic decision-making introduces elements of bias (citation). These biases can include personal bias, cognitive bias and
Due to its subjective nature, the outcome of the decision remains uncertain to the manager of the corporation. Thus, if rational decision-making is considered, managers will be more secured about the decision that was made.
Due to the limitations of perceptual decision-making, managers are also