Assuming that a problem has more than one potential

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Unformatted text preview: , most people respond by reducing the problem to a level at which it can be readily understood, due to limited information­processing capability. As a result, people seek solutions that are satisfactory and suff icient. This is called bounded rationality (Simon, 1947). Individuals operate within the confines of bounded rationality. They construct simplified models that extract the essential features. How does bounded rationality work? Once a problem is identified, the search for criteria and alternatives begins. The decision maker will identify a limited list made up of the more conspicuous choices, which are easy to find, tend to be highly visible, and they will represent familiar criteria and previously tried­and­true solutions. Once this limited set of alternatives is identified, the decision­ maker will begin reviewing it. The decision­maker will begin with alternatives that differ only in a relatively small degree from the choice currently in effect. The first alternative that meets the “good enough” criterion ends the search. The order in which alternatives are considered is critical in determining which alternative is selected. Assuming that a problem has more than one potential Sikkim Manipal University 106 Perception Unit 8 solution, the satisficing choice will be the first acceptable one the decision­maker encounters. Alternatives that depart the least from the status quo are the most likely to be selected. Intuitive decision making It is an unconscious process created out of distilled experience. It operates in complement with rational analysis. On one hand, some researchers consider it a form of extrasensory power or sixth sense, and on the other hand, some believe it is a personality trait that a limited number of people are born with. Eight conditions when people are most likely to use intuitive decision making are: · when a high level of uncertainty exists · when there is little precedent to draw on · when variables are less scientifically predictable · when “facts” are limited · when facts do not clearly point the way to go · when analytical data are of little use · when there are several plausible alternative solutions to choose from, with good arguments for each · when time is limited, and there is pressure to come up with the right decision Decision making process A. Problem Identification Problems that are visible tend to have a higher probability of being selected than ones that are important. Visible problems are more likely to catch a decision­maker’s attention. If a decision­maker faces a conflict between selecting a problem that is important to the organization and one that is important to the decision­maker, self­interest tends to win out. The decision­maker’s self interest also plays a part. W hile selecting a decision to solve a problem, decision maker puts more importance to his/her self­interest over the organizational interest. Sikkim Manipal University 107 Perception Unit 8 B. Alte...
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