3.1 Rational decision making

It can be tempting to view all decision making as a formal and rational process, and perhaps this is how you do it yourself.

An example of a ‘rational process’ for arriving at a decision is described by Max H. Bazerman in Judgement in Managerial Decision Making, in terms of the following steps:

1. Define the problem
2. Identify the decision criteria
3. Weight the criteria
4. Generate alternatives
5. Rate each alternative on each criterion
6. Compute the optimal decision.

More sophisticated versions of such processes allow for the calculation of probabilities for different possible outcomes associated with each alternative and the weighting of the perceived benefit of those outcomes by their probability.

Unfortunately however, humans are not always so inherently logical or rational. While we may think that our decision making processes are based on logic and optimising outcomes, the reality is somewhat different.