Page 75 - DMGT402_MANAGEMENT_PRACTICES_AND_ORGANIZATIONAL_BEHAVIOUR

Management Practices and Organisational Behaviour

Notes and effort looking for an ideal personality. According to Hitt, Middlemist and Mathis,
satisficing can occur for various reasons:
(a) Time pressure.

(b) A desire to sit through a problem quickly and switch to other matters.
(c) A dislike for detailed analysis that demands more refined techniques.
(d) To avoid failure and mistakes that could affect their future in a negative way.
Satisficing decisions make progress toward objectives, and this progress can be made
while continuing to search for the better decision. In other words, satisficing, by recognizing
the internal as well as external limitations under which decision-makers operate, provides
a flexible approach where objectives can be achieved more easily. The Figure 3.4 below
indicates the factors leading to bounded rationality and satisficing decisions.

Figure 3.4: Factors Leading to Bounded Rationality and Satisficing Decisions

Information External Factors Time and
Processing Cost Limits
Abilities (Internal)

Organizational Personal
Objectives DECISION MAKER Factors

Satisficing Decisions

Evaluation: Does the bounded rationality model more realistically portray the managerial
decision process? Research indicates that it does. One of the reasons that managers face
limits to their rationality is because they must make decisions under risk and time pressure.
The situation they find themselves in is highly uncertain and the probability of success is
not known. The model also highlights the importance of looking into the behavioural
aspects in the decision-making process. This knowledge certainly helps in understanding
how and why managerial decisions have been made.
3. The Optimizing Decision-making Model: While making a decision under this model, an
individual should follow the following six steps:

1st Step – Ascertain the need for a Decision: The first step requires recognition that a decision
needs to be made. A decision needs to be made when there exists a problem. In other
words, there is a disparity between some desired state and the actual conditions and the
decision-maker recognizes this.
2nd Step – Identify the Decision Criteria: Once an individual has determined the need for a
decision, the criteria that will be important in making the decision must be identified. The
second step is important because it identifies only those criteria the decision-maker considers
relevant. If a criterion is omitted from this list, we treat it as irrelevant to the decision-
maker.

3rd Step – Allocate Weights to the Criteria: The criteria listed in the previous step are not all
equally important. It is necessary, therefore to weigh the factors listed in the above-
mentioned step in order to prioritize their importance in the decision. All the criteria are

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