The Six-Step Rational Decision-Making Model 1. Define the problem. 2. Identify decision criteria 3. Weight the criteria 4.

Generate alternatives 5. Rate each alternative on each criterion 6. Compute the optimal decision Identify decision criteria Once a decision maker has identified the problem, he or she needs to identify the decision criteria that will be important in solving the problem. In this step, the decision maker is determining whats relevant in making the decision. It brings the decision makers interest, values and personal preferences into the process. Identifying criteria is important because what one person thinks is relevant, another person may not. Weight the criteria The decision maker weights the previously identified criteria in order to give them the correct priority in the decision. Generate alternatives The decision maker generates possible alternatives that could succeed in resolving the problem. No attempt is made in this step to appraise these alternatives, only to list them. Rate each alternative on each criterion The decision maker must critically analyze and evaluate each one. The strengths and weakness of each alternative become evident as they compared with the criteria and weights established in second and third steps.
Compute the optimal decision Evaluating each alternative against the weighted criteria andselecting the alternative with the highest total score.

Assumptions of Model 1. Problem clarity; (The decision maker is assumed to have complete information regarding the decision situation.) 2. Known options (Identify all the relevant criteria and can list allthe viable alternatives. The decision maker is aware of all thepossible consequences of each alternative.) 3. Clear preference (The criteria and alternatives can be rankedand weight to reflect their importance) 4. Constant preferences (The specific decision criteria are constantand that weights assigned to them are stable over time) 5. No time or cost constraints 6. Maximum payoff Part 2 - Improving Creativity in Decision Making Creative Potential Get out of the psychological ruts most us getinto and learn how to think about a problem in divergent ways. Three-Component Model of Creativity Expertise (The foundation of all creative work) knowledge of a subject were necessary conditions for us to be able to make creative contributions to the fields. The potential for creativity is enhanced when individuals have abilities, knowledge, proficiencies, and similar expertise in their fields of endeavor. Creativity Skills (The ability to use analogies to see the familiar in a different light. apply an idea from one context to another)Intelligence, independence, self-confidence, risk taking, and internal locus of control, tolerance for ambiguity and perseverance in the face of frustration. Intrinsic task motivation (The desire to work on a task) interesting, involving, exciting, satisfying, or personally challenging these factors would be affecting the task motivation. This would turn creativity potential into actual creative ideas. Five organizational factors can impede staff creativity: 1. Expected Evaluation [Focusing on how staffs work is going to be evaluated] 2. Surveillance [Being watched while staffs are working] 3. External motivators [Emphasizing external, tangible rewards 4. Competition [Facing win-lose situations with peers]

5. Constrained choice [Being given limits on how staffs can do their work.] Part 3 - How Decisions Are Actually Made in Organization People are usually content to find an acceptable or reasonable solution to their problem rather than optimal one. Consequently, decision makers generally make limited use of their creativity. Choices tend to be confined to the neighborhood of the problem symptom and to the neighborhood of the current alternative.Most significant decisions are made by judgment, rather than by a defined prescriptive model. Bounded Rationality When a staff considered which college to attend, they will not look every viable alternative nor identify all the criteria that were important in decision. Instead of optimizing, staff probably satisfied. When faced with a complex problem, most people respond by reducing the problem to a level at which it can readily understand. The limited information-processing capability of human beings makes it impossible to assimilate and understand all the information necessary to optimize. So people satisfied; that is, they seek solutions that are satisfactory and sufficient. Because the capacity of the human mind for formulating and solving complex problems is far too small to meet the requirements for full rationality, individuals operate within the confines of Bounded rationality. They construct simplified models that extract the essential features from problems without capturing all of their complexity. Individuals can then behave rationally within the limits of the simple model. Once a problem is identified, the search for criteria and alternatives begins. But the list of criteria is likely to be far from exhaustive. The decision maker will identify a limited list made up of the more conspicuous choices. These are the choices that are easy to find and that tend to be highly visible. In most cases, they will represent familiar criteria and previously tried-and-true solutions. Once this limited set of alternatives is identified, the decision maker will begin reviewing them. But the review will not be comprehensive not all of the alternatives will be carefully evaluated. Instead, the decision maker will begin with alternatives that differ only in relatively small degree from the choice currently in effect. Following along familiar and will-worn paths, the decision maker proceeds to review alternatives only until he or she identifies an alternative that is good enough one that meets an acceptable level of performance. The first alternative that meets the good enough criterion ends the search. So the final solution represents a satisfying choice rather than an optimal one. The order in which alternatives are considered is critical in determining which alternative is selected. Remember, in the fully rational optimizing model, all alternatives are eventually listed in hierarchy of preferred order. Because all alternatives are considered, the initial order in which they are evaluated is irrelevant. Every potential solution gets a full and complete evaluation. But this isnt the case with bounded rationality. If we assume that a problem has more than one potential solution, the satisfying choice will be the first acceptable one the decision maker encounters. Decision makers use simple and limited models, so they typically begin by identifying alternatives that are obvious, ones with which they are familiar, and hose not too far from the status quo.Solutions that depart least from the status quo and meet the decision criteria are most likely to be selected. A unique and creative alternative may present an optimizing solution to the problem, but its unlikely to be chosen because an acceptable solution will be identified well before the decision maker is required to search very far beyond the status quo.