When decision makers are faced with a simple problem and few alternative courses
of action, and when the cost of searching out and evaluating alternatives is low, the
rational model provides a fairly accurate description of the decision process.^9 However,
such situations are the exception. Most decisions in the real world do not follow the
rational model. For instance, people are usually content to find an acceptable or rea-
sonable solution to their problem rather than an optimizing one. As such, decision
makers generally make limited use of their creativity. Choices tend to be confined to the
problem symptom and to the current alternative. As one expert in decision making has
concluded: “Most significant decisions are made by judgment, rather than by a defined
prescriptive model.”^10
In the following sections, we identify areas where the reality of decision making con-
flicts with the rational model.^11 None of these ways of making decisions should be con-
sidered irrational; they are simply departures from the rational model that occur when
information is unavailable or too costly to collect.Problem Identification
Most of the decisions that get made reflect only the problems that decision makers see.
Problems do not arrive with flashing neon lights to identify themselves. One person’s
problemmay even be another person’s acceptable status quo.So how do decision makers
identify and select problems?
Problems that are visible tend to have a higher probability of being selected than
ones that are important.^12 Why? We can offer at least two reasons. First, it’s easier to
recognize visible problems. They are more likely to catch a decision maker’s attention.
This explains why politicians are more likely to talk about the “crime problem” than the
“illiteracy problem.” Second, remember that we are concerned with decision making in
organizations. Decision makers want to appear competent and “on top of problems.”
This motivates them to focus attention on problems that are visible to others.
Do not ignore the decision maker’s self-interest. If a decision maker faces a conflict
between selecting a problem that is important to the organization and one that is impor-
tant to the decision maker, self-interest tends to win out.^13 This also ties in with the
issue of visibility. It is usually in a decision maker’s best interest to attack high-profile
problems. It conveys to others that things are under control. Moreover, when the deci-
sion maker’s performance is later reviewed, the evaluator is more likely to give a high rat-
ing to someone who has been aggressively attacking visible problems than to someone
whose actions have been less obvious.Bounded Rationality in Considering Alternatives
When you considered which college or university to attend,
did you look at every possible alternative? Did you carefully
identify all the criteria that were important to your deci-
sion? Did you evaluate each alternative against the criteria in
order to find the school that is best for you? The answer to
these questions is probably “no.” But don’t feel bad, because
few people selected their educational institution this way.
It is difficult for individuals to identify and consider every possible alternative avail-
able to them. Realistically speaking, people are limited by their ability to interpret,
process, and act on information. This is called bounded rationality.^14
Because of bounded rationality, individuals are not able to discover and consider
every alternative for a decision. Instead, they identify a limited list of the most obvi-
ous choices. In most cases, these will include familiar criteria and previously tested
solutions. Rather than carefully reviewing and evaluating each alternative in great detail,
individuals will settle on an alternative that is “good enough”—one that meets an296 Part 4Sharing the Organizational Vision
bounded rationality Limitations
on a person’s ability to interpret,
process, and act on information.
Do people really
consider every
alternative when
making a decision?