Managing Decision Making Assignment Example | Topics and Well Written Essays - 1000 words

Managing Decision Making - Assignment Example    Literature Review & Summary of Research Findings- Simon's Model of Decision According to classical decision making theory, individuals need to gather information regarding the emergent issue, then search for plausible alternativeness which can be used in order to address the issue and then select the most optimal alternatives (Bechara and Damasio, 2005). But, Simon (1979) criticized the classical decision making approach by stating that model doesn’t correspond with real world decision dilemmas. One needs to understand the key steps in Simon’s decision making model in order to criticize or appreciate it in context to research works of different research scholars. Bechara and Damasio (2005) stated that there are three phases in Simon’s decision making model such as, 1- intelligence phase, 2- design phase and 3- choice. Intelligence Phase- in the intelligence phase, individuals formulate the problem or decision statement by comparing the current process status with historical data or reference points. In this phase, individuals gather information from external environment without knowing exact outcome of such information crunching. Design Phase- in this phase, individuals try to formulate the probable alternatives to address the decision statement by considering the gathered information from macro environment. Decision makers need to analyze the information collected from external environment in order to generate alternative approach to the problem statement. Choice- in this phase, individuals select the most feasible alternative in order to address the decision problem or take decision. Important thing to remember that, the most potential alternative to the decision problem might not be the most feasible one hence decision makers must take care while selecting potential choice. There is no doubt that Simon’s decision model is based on the concept of bounded rationality. Simon (1979) pointed out that rational decision making becom es difficult due to various reasons such as lack of knowledge about all the alternatives, uncertain events, inability to calculate consequences, lack of knowledge about the consequence of particular decision, human behavioural limits etc. Due to such shortcomings, rationality of any decision making is subjected to be bounded hence a decision cannot be optimized. Sent (2005) supported the bounded rationality model of Simon and stated that although rationality might be the goal for decision making but ability of the decision maker is limited due to cognitive (such as personal values, lack of computational ability, reflexes and lack of knowledge) as well as exogenous factors (uncertainty regarding the outcome of decision). DellaVigna (2009) stated that the concept of bounded rationality is very much pertinent in context to modern day business problems while Bromiley (2005) appreciated decision making model of Simon for its usability in investment decision making and behavioral economic s. However, there are other group of research scholars such as Campitelli and Gobet (2010) and Levinthal (2011) who criticized Simon’s decision making model for lacking in depth. Levinthal (2011) stated that decision makers need to create representation in explicit or implicit manner while making deductive reason