1. Welcome to
Organizational Behavior
Decision Making in Organization[ ]

2. What’s are the models
of decision-making…???

3. The first is the Rational Decision-
Making model…

4. This model assumes a perfect world in order to make decisions.
It assumes that there is complete information, that every
option has been identified and that there is a maximum
payoff.

5. The rational decision-making model relies on a number of
assumptions, including that the decision maker has complete
information, is able to identify all the relevant options in an
unbiased manner, and chooses the option with
the highest utility.

6. The second model is
Bounded Reality model…

7. This model represents more of the real world where it seeks
solutions that are the best, given the information that is
available.

8. Our limited information-processing capability makes it
impossible to assimilate and understand all the information
necessary to optimize. So most people respond to a complex
problem by reducing it to a level at which they can readily
understand it.

9. The third model is based
on intuition…

10. This is the non-conscious process that occurs as a result of
experiences that result in quick decisions.

11. For most of the twentieth century, experts believed decision
makers’ use of intuition was irrational or ineffective.

12. That’s no longer the case.38 We now recognize that rational
analysis has been overemphasized and, in certain instances,
relying on intuition can improve decision making.39 But we
can’t rely on it too much.

13. Because it is so unquantifiable, it’s hard to know when our
hunches are right or wrong. The key is neither to abandon
nor rely solely on intuition, but to supplement it with
evidence and good judgment.