$1.$ Rational Perspectives on Decision Making

Read the Management at Work scenario below. Then use your understanding of rational decision$-$making process to answer the questions about it$.$

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Management at Work

VoxSigns develops and maintains electronic billboards similar to this one in Times Square in New York. The company$$s CEO, Matt, heard that you have studied different decision$-$making perspectives and asked you for advice regarding an important decision. Matt must decide whether to lay off $20\%$ of the company$$s employees due to declining revenues. Matt wants you to help him make the best decision possible.

First, you explain the rational decision$-$making process to Matt by outlining the steps typically followed by effective decision makers.

In the following table, identify the order in which these steps are usually taken.

Decision$-$Making Steps

Order

Identify the alternatives.

Evaluate the results.

Select the best alternative.

Evaluate the alternatives.

Define the decision.

Implement the chosen alternative.

After you review the six steps with Matt, he asks for an example of how to evaluate alternatives as he decides whether VoxSigns should lay off employees. Which of the following is the correct example to give to Matt?

Even though it is a difficult decision, Matt would decide that VoxSigns should lay off employees as the best way to address the company$$s immediate need for cash.

Matt would articulate the specific issue to be decided: whether laying off employees is the best way for VoxSigns to address the financial pressure it faces.

Matt would make a list of ways the company might address its financial concerns, such as laying off employees, increasing customer prices, moving to a less expensive office space, or a combination of these ideas.

Matt would assess each option in terms of feasibility, satisfactoriness, and consequences; he will want to consider if the company is capable of implementing each option, as well as the resulting financial returns and other consequences $($such as lower employee moral for remaining employees$).$

While Matt likes the structure provided by the rational decision$-$making process, you caution him that it has some shortcomings. Why is the rational decision$-$making process difficult to apply completely in many situations? Check all that apply.

Managers may lack the resources to explore creative solutions.

Managers often make decisions that are not based on facts and logic.

Managers usually have time to research new and novel alternatives.

Managers do not always evaluate situations logically$.$