The Rational Decision Making Model

The case study, “Innovate or Liquidate? TLA” adapted by A J Sturdy from J M Corbett (Corbett, 1994) mainly draws onto the issues regarding decision making and how rational decisions are made by company executives in real life scenarios. All sorts of decisions are made by every one of us today and we usually try to make them as rational as possible in order to maximize utility. Our decisions vary in significance and are usually of low scale, period or risk but in this case study, the situation tends to be more sophisticated and a strategic decision is required to settle on a plan of action towards implementing the new TLA system. During the process, executives at Craven Breweries couldn’t arrive on a consensus towards a rational decision and this was due to limitations that included inadequate resources, uncertainty of mental capacities, emotional insecurities, group/social processes, politics and forecasting/analysing traps. Due to the various limitations encountered from the decision-making process towards implementing the TLA system, the organization should utilize different theories like the rational decision model and be fully aware of the ‘hidden’ traps within rational decision making in order to develop and improve their possible courses of action in the future.

            Poor decision-making might not only sabotage a business but also the careers as well. In most organizations including Craven Breweries Ltd, the process of decision-making requires the input of the leaders to help in ensuring that goals of the organization are made. Poor decision main might result from not weighing the options available rationally and this might lead to rushing into decisions (Hammond, Keeney & Raiffa, 2006).  In some instances bad decisions are made in the mind through preformed ideologies that certain activities are not running in the right ways (Hammond, Keeney & Raiffa, 2006).  From Jessica’s stand point at first, there are a number of traps in the decision making process that need to be addressed to ensure that all activities run smoothly and efficiently. Evidently, there are a number of disadvantages in not making appropriate decision. Jessica was not in line with the proposals concerning the TLA system (Corbett, 1994). She felt that in as much as the system is praised, it would be necessary to ensure that the cost of the system is   relatively in line with the presumed benefits.  She did not have factual information to approve her thoughts. Appropriate decision-making requires in depth thoughts beyond which the normal eyes intend to see.

            Deciding on the TLA System is a strategic decision that requires a relatively higher amount of time to ensure that all the activities are smoothly and efficiently. The decision might be costly and risky to the company if not taken into close consideration by most of the members of the executive (Corbett, 1994). The strategic decisions require tactical decisions to help in ensuring that all the activities of the organization are run smoothly and efficiently.

            Making decisions concerning the model requires rational thoughts and thus the rational decision making model. A rational decision making model  involves checking on the perceived problem or issue,  the determination of the objectives of the company, checking on the probable alternatives, determination of the criteria of comparing the two  systems involved and implementation of the new idea. The problem needs to be visible to the organization for it to consider taking in the TLA system. He current system have been said to have number of benefits. However, the system has been found to be about half a million dollar more expensive than the current system. The organization is an upcoming one and lacks may resources to take care of the demands of the system wholesomely. Jessica’s personal views also tend to influence her decision. The system has a number of presumed benefits that eve her competitors have ordered for it yet she still thinks that Craven Breweries Ltd should not get one. After being told of the probable costs that project might need, she continued saying that the board of directors are less likely to approve the idea.

            Toby acknowledged that there was a probability that the organization would have to spend more capital trying to make the TLA system work. However, the long term costs of the system would be more beneficial to the organization.  Jessica was convinced by Toby’s standing point and wet to the IT department for further clarification. The was not ready to give his point of view concerning the system as he felt that he was secluded in most of the It works. He felt that the departmental managers were not considering the department for IT softwares. The presumed profitability made the proposal go through for discussions after three months. However, there were different perspectives concerning the right procedures to take at a given time (Calabretta, Gemser & Wijnberg, 2017). The committee had felt that their regular It supplier was relatively expensive and they had to sought for a new alternative. However, the IT manager gave a proposal that changing the supplier would mean the organization would have to change all the It equipment including the softwares as the decision might threaten the incompatibility with the current systems.

            Having a preformed ideology concerning new decisions might hamper the ways through which individuals are likely to make the right decisions. Jeremy was not to the idea of implementing the new useful program and the board of directors realized it. He was replaced by Toby who was seen to have a greater view and open to decisions that revolve around It. Proper implementation of a given project requires having the right leadership (Haidar, 2015). Toby was well versed with the information concerning the project and could easily ensure that the idea is implemented. An open view in approaching a new ideas helps in the determination of whether a given idea might be useful to the organization or not (Sturdy, 2004 p.159). The rapidly growing technological advancements require individuals to understand the importance of having a rational thought on the new advancements. One needs to check on the presumed costs and benefits and try to make sure that they only adopt the useful ones.

In summary making appropriate decisions for organizations helps in ensuring that the organizations move forward. Decision making might be guided with the presumed costs and benefits or personal issues might influence it. Rational decision-making theories are useful in the making of decisions as it bases its arguments of facts and not feelings of the individuals involved in decision making. Rational decision making have convincing facts and this has help in explaining the importance of Craven company leaders leading to its adoption. Rational decision making procedures require well-trained professionals to help in ensuring that various projects at hand are run appropriately.

References

Buchanan, L. and O Connell, A., 2006. A brief history of decision making. Harvard business review, 84(1), p.32.

Calabretta, G., Gemser, G. and Wijnberg, N.M., 2017. The interplay between intuition and rationality in strategic decision making: A paradox perspective. Organization Studies, 38(3-4), pp.365-401.

Corbett, J M (1994) Critical Cases in OB, Macmillan, Case 21. (Adapted by Sturdy, A J (2018))

Haidar, A.D., 2015. Construction Program Management–Decision Making and Optimization Techniques. Springer.

Hammond, J.S., Keeney, R.L. and Raiffa, H., 2006. The hidden traps in decision making. harvard business review, 84(1), p.47-58.

Sturdy, A., 2004. The adoption of management ideas and practices: Theoretical perspectives and possibilities. Management Learning, 35(2), pp.155-179.