$$A$1.$ 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$$s CEO, Liz, heard that you have studied different decision$-$making perspectives and asked you for advice regarding an important decision. Liz must decide whether to lay off $20\%$ of the company$$s employees due to declining revenues. Liz wants you to help her make the best decision possible.

First, you explain the rational decision$-$making process to Liz 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

Select the best alternative.

Define the decision.

Identify the alternatives.

Implement the chosen alternative.

Evaluate the alternatives.

Evaluate the results.

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

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

Liz 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.

Liz would assess each option in terms of feasibility, satisfactoriness, and consequences; she 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$).$

Liz 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.

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

Managers cannot always obtain complete and accurate information.

Managers are limited by their values and unconscious beliefs.

Managers do not always evaluate situations rationally.

Managers usually have the resources to consider numerous alternatives.

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