Optimal Decision-Making Strategies for Managers: Navigating the Rational, Behavioral, and Practical Approaches

Abstract

Instructor’s Name Making decisions by managers is a constant norm in problem solving and executing organizational goals. The decisions significantly impact organizational performance and its stakeholders. Decision making is one of the most primary functions in the modern management and a critical aspect that requires understanding of the various managerial decisions and the context in which decisions can be made (Burko 2021). There are various decisions including; tactical, strategic, and managerial decisions. Strategic decisions occur at the highest level of the organization and define organizational objectives and strategies. Tactical decisions are executed in achieving organizational objectives and goals while operational decisions entail customer relations in service delivery. Decision making is not easy and entails choices and selecting between the alternative courses of action. Managers use various decision-making approaches to quicken the process. Managers consider the cost and benefits of the approach, the advantages and disadvantages, and alignment with their preferences (Games & Romao 2017). There are various types of decision making and managers have different tactics based on the problem. There are those decisions managers make based on their intuition and personal experience, and there are those that a manager bases on problem evaluation and execution of rational and logical facts in the final process. This essay will discuss three types of decision-making approaches including the rational, behavioral, and the Practical approach. Rational approach entails the use of observational and analytical steps in a review of relevant facts and ideologies in a systematic manner before choosing a particular course of action. this approach assumes that managers are well equipped and informed in making the best decisions. This decision-making approach takes a process: (1) Stating the situational goal, to be used as a standard of measure in making a decision. (2) Identification of the problem, which helps collect information to achieve the desired goal. Reliable ad accurate information is needed here to avoid making wrong decisions. (3) Determining the decision type whether it will be a programmed or non-programmed decision. (4) Generating Alternatives based on the decision type, education level, professionalism, experience, and the nature of the situation. (5) Evaluation of alternatives based on costs and benefits, strength and weaknesses, and preferences. According to (Carboni &Russu 2018), managers consider various aspects such as the social, economic, and ecological factors that possibly influence the outcomes of the decision. (6) Choosing an alternative. This is the most crucial step in the decision-making process. It requires high levels of competency and professionalism in deducing logical facts. The managers set contingency plans to secure them if their alternative is rendered inappropriate. (7) Implementing the plan. After the decision is formally accepted the decision is put into action by the authorities and communicated to the relevant individuals. Support and enough resources are provided to enforce the decision. Implementation requires commitment, resilience, resources, and skills and knowledge. (8) Control. This aspect entails measuring the outcome with the desired goals and if it does not align, decision makers begin the decision-making process. Rational decision making has numerous strengths since it takes a series of evaluation to prove validity and embrace accuracy. The approach does not succumb to pressure, emotions, and bias it embraces an intensive analysis. However, the process is tedious and requires a lot of time and resources. Behavioral approach of decision making is where managers are doomed to bounded rationality due to factors they cannot avoid and make decisions for the common good on the organization. Hebert A Simpson, a prolific economist uses behavioral approach in attempt to explain real life situations (McLanahan 2021). With this approach, managers do not have full information. they have simplified and limited views of the problematic situation and have no capacity to process influences of the environment and technology on their problem to enhance intensive and exhaustive search of the problem. With this claims the managers use two concepts; bounded rationality, and satisfying course of action. Bounded rationality entails taking a course of action limited to their mental capacity, resources, time, and...