Organizational Behavior (Stephen Robbins)

courses of action.^3 An opportunityoccurs when something unplanned happens, giv-

ing rise to thoughts about new ways of proceeding.

Whenever any of us make a decision, we have a process that we go through to help

us arrive at that decision. Some of us take a very rational approach, with specific steps

by which we analyze parts of the decision, others rely on intuition, and some just decide

to put two or more alternatives into a hat and pull one out.

Knowing how to make decisions is an important part of everyday life. Below we con-

sider various decision-making models that apply to both individual and group choices.

(Later in the chapter, we discuss special aspects of group decision making.) We start

with the rational model,which describes decision making in the ideal world, a situation

that rarely exists. We then look at alternatives to the rational model and how decisions

actually get made.

The Rational Decision-Making Process

The rationaldecision maker makes consistent, high-quality choices within specified

constraints.^4 These choices are made following a six-step rational decision-making

model.^5

The Rational Model

The six steps in the rational decision-making model are listed in Exhibit 9-1.

First, the decision maker must define the problem.If you calculate your monthly

expenses and find you are spending $50 more than your monthly earnings, you have

defined a problem. Many poor decisions can be traced to the decision maker over-

looking a problem or defining the wrong problem.

Once a decision maker has defined the problem, he or she needs to identify the criteria

that will be important in solving the problem. In this step, the decision maker determines

what is relevant in making the decision. This step brings the decision maker’s interests,

values, and personal preferences into the process. Identifying criteria is important

because people can have different ideas about what is rele-

vant. Also keep in mind that any factors not identified in this

step are considered irrelevant to the decision maker.

To understand the types of criteria that might be used

to make a decision, consider the many sponsorship requests

the Toronto-based Canadian Imperial Bank of Commerce

(CIBC) receives each year. In making a decision about

whether or not to support a request, the bank considers the

following criteria:^6

• Strategic fit with CIBC’s overall goals and objectives


• Ability to achieve youth customer–segment market-
  ing objectives


• Tangible and intangible benefits of the proposal,
  such as goodwill, reputation, and cost/potential
  revenue


• Organizational impact


• Business risks (if any)
  If the sponsorship request does not meet these criteria, it
  is not funded.
  The criteria identified are rarely all equal in importance.
  So the third step requires the decision maker to allocate
  weights to the criteriain order to give them the correct pri-
  ority in the decision.

294 Part 4Sharing the Organizational Vision

rational Refers to choices that
are consistent and value-maximizing
within specified constraints.

rational decision-making model
A six-step decision-making model
that describes how individuals
should behave in order to maximize
some outcome.

Making a Decision

1.

Define the

problem

2.

Identify the

criteria

4.

Develop

alternatives

3.

Allocate weights

to the criteria

5.

Evaluate the

alternatives

6.

Select the

best alternative

EXHIBIT 9-1 Steps in the Rational

Decision-Making Model

decision The choice made from
two or more alternatives.

problem A discrepancy between
some current state of affairs and
some desired state.

opportunity An occasion that
gives rise to thoughts about new
ways of proceeding.