Decision-Making Models

The field of organizational behavior has historically emphasized two alternative approaches to decision making as shown in Figure 9.3—classical and behavioral.¹⁴ The classical decision model views people acting in a world of complete certainty, whereas the behavioral decision model accepts the notion of bounded rationality and suggests that people act only in terms of what they perceive about a given situation.

Figure 9.3 Decision making viewed from the classical and behavioral perspectives.

Classical Decision Model

The classical decision model views the manager or team as acting rationally and in a fully informed manner. In a certain environment, the problem is clearly defined, all possible action alternatives are known, and their consequences are clear. This allows for an optimizing decision that gives the absolute best solution to the problem. This model nicely fits the five-step decision-making process described earlier. It is an ideal situation of complete information where the decision maker moves through the steps one by one in a logical fashion. And it nicely lends itself to various forms of quantitative decision analysis as well as to computer-based applications.¹⁵