[Solution] Behavioral Aspects of Decision Making
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Author: Sarah Bennett
Decision making often does not follow the classical, or rational, model. It can nonetheless be successful, because subjective factors also play a role in sound decision making. The administrative model addresses these factors that play a large role—sometimes beneficial, sometimes not—in real-world decisions.
The Administrative Model
The administrative model of decision making, developed by Herbert Simon, recognizes that managers make decisions under constraints that limit their ability to follow the ideal rational process:
Administrative Model of Decision Making
Classical Model
- Comprehensive information search
- Complete rationality
- Optimization (finding the best)
- Objective approach
Administrative Model
- Limited information search
- Bounded rationality
- Satisficing (finding what's "good enough")
- Influenced by values, habits, and politics
Behavioral Influences on Decision Making
Several behavioral factors affect how managers actually make decisions:
- Limited information: Management judgment is often limited by the quantity and quality of information managers have.
- Bounded rationality: Managers are also limited by bounded rationality, meaning that instead of using the purely logical approach assumed by the classical model, their thinking is influenced by values, unconscious reflexes, skills, and habits.
- Satisficing: When managers satisfice, they stop looking at alternatives once they've found one that is good enough, instead of examining alternatives until the best is found.
- Coalition formation: In organizations, people often form informal alliances to achieve common goals, which can influence the decision-making process.
Select the term that best completes the following sentence about the administrative model of decision making.
When a manager stops looking for alternatives as soon as she finds one that meets minimum criteria, the manager is .
View Explanation
Managers may not look for all possible alternatives before making a decision. Instead, they may examine alternatives only until they find one that is good enough and then choose that one. When a manager satisfices in this way, she may fail to consider better options.
Select the correct response for the following question.
What is the term for an informal alliance of people who seek a common goal?
- Coalition
- Division
- Department
- Team
View Explanation
An informal alliance among people to achieve a common aim is a coalition. Coalitions often form among a subset of people in a department, division, or team.
