In bounded rationality model rather than searching

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In bounded rationality model, rather than searching for the most optimal or best solution, we go forsearching an acceptable solution. By nature, this is adescriptive modelas it describes how decisionmakers actually arrive at identification of solution to the problem.5.5.3Implicit Favourite ModelThis model is more common in non-routine problems with non-programmed solutions. In many nonroutine situations, we encounter situation where (based on our perception) some alternative appearto be satisfactory on the based of past knowledge and experience. For example, a student issearching for job. He has number of alternatives. But with past knowledge, some job opportunitiesappear to be favourite, which are called implicit favourites.. The ‘favourite option’ is kept in mind,but simultaneously other options ar alternatives are also examined, and satisfactory solution iscompared to the favourite solution identified earlier. Thus most satisfactory alternative is identifiedand named as ‘confirmation alternative. This perception based situation was projected by Soelberg(1967) At this stage, the student evolves some decision rules that brings out that the implicitfavourite was superior to the confirmation candidate. This may have been done though perceptualdistortion of information about the two alternatives. Our own perceptions tend to support theimplicit favourite choice, which is announced as the decision.5.5.4Quantitative Approach for Decision-MakingIn most situations, decision alternatives are analysed and compared with each other using nonquantitativetechniquesassufficientdataisnotavailableregardingthelikebenefitsandrisks/disadvantage associated with each alternative.
46 |P a g e©2016 London School of International Business. All rights reserved.However, through use of modelling and scale based measurement, the qualitative parameters maybe measured on a quantitative scale. This approach facilitates quantitative analysis of decisionalternatives and deciding most optimal solution. Appropriate software can also be developed for usein such situation for carrying out quantitative analysis of qualitative parameters.5.6Risks & Uncertainty in Decision-MakingConventional theories and models of organisational decision making make two fundamentalassumptions: firstly it is possible to have complete information regarding decision alternatives; andsecondly the outcome of various alternatives can be predicted on the basis of available information.The first problem relate toproblem complexity posing riskin any assumption. The second problemrelate touncertainty of outcomein any alternative is implemented. There decision makers have toface three situations due to level of available information: (a) decision under certainty, (b) decisionunder uncertainty, and (c) decision under risk.Decision Making under Certainty:Insuchasituation,amanagerhasperfectknowledgeaboutvariousdecision-alternatives. He also has full knowledge about possible outcome of each alternative.Therefore,insuch

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