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Business Behavior In a Changing World


Decision-making is a process that is assumed important in every field of life and is referred to such mental or cognitive processes that results in the selection of specific course of action in particular scenario. Thus, every decision making process produces ultimate choice and the output can either be action or opinion of choice. According to Ranyard et al (1997), decision-making process aims to identify and choose substitutes based on the values and priorities of the decision maker. However, decision-making process is not problem solving process as some of its decisions are not problem oriented but output of the decision-making can lead to solution of a problem. 

Different models and processes have been offered to understand the way human being are involved in decision-making process. Rational model is the mode in which decision makers are to accept the value maximizing calculations along with alternatives to meet the organization goals and objectives. According to Bell and Raiffa (1988), decision-making is a rational process, which includes establishment of objectives, availability of alternatives and evaluation of tentative decision making for more consequences that are possible. Moreover, rational model of decision–making process involves cognitive process in which various steps are taken in a logical order while thinking through and weighing the alternatives to make best-expected result. According to Roth and Mullen (2002), there are certain factors of decision-making model that are required to accomplish the rational process of decision-making. The factors of decision-making process are defined as reasonable identification of the problem, sensible identification of decision criteria weight the criteria, summing up the alternatives, and optimal decision-making approach (Connolly 2000).

Factors of Decision-making Process and Descriptive Model of Decision-making

The descriptive model of decision-making that investigates the way human makes decisions has concluded that decision-making process is affected by different factors that exist in the environment. Organizations are engaged in day-to-day base decision-making process due to significance of decision-making process and requirements (Daft, 2009). Additionally, within organizations, managers, being important part of organizational management, are constantly engaged in making decisions to solve organization problems. Thus, decision-making process is of great significance in the organization involving process of evaluation of problem or situation, consideration to alternatives and following up requisite actions (Shapira 2002). However, decision-making process in organization is like decisions that are made by individuals but there are certain differences in the decision-making process of organization, as they are needed to involve appropriate and efficient implementation of strategic plans to achieve the desired business objectives (Koehler and Harvey, 2004). According to Shapira (2002), different factors can effectually influence the decision-making process such as individual differences including age and gender, differences of faith and values, group relationship and organization power relationship and political behavior. According to Roth and Mullen (2002), the factors that affect the decision-making process can be both individual and group difference; in this regard, it is explained that decision-making that is likely to be taken by whether individual or group, their differences of attributes can affect the decision-making process. It is further argued that if subject of the decision-making is an individual, the decision can be affected by his experience, cognitive biases, and personal belief. However, these personal traits do not include socioeconomic factor that is defined as the most relevant factor that affects the decision-making process. The rational process of decision-making that identifies different steps as significant aspect to make decision, for ongoing process, the decision maker is required to use his personal attributes including cognitive biases, faith and values, and nature of relationship with effected factor of decision-making. This can better be understood by the example of an individual who intends to make decision through making a choice out of number of alternatives. While choosing one alternative as solution of his problem, he will surely consider his previous life experience as well as beliefs. If in his previous life, he had no good or pleasant experience is related to that alternative, he will definitely not choose the alternative as his decision outcome.

With respect to decision-making in organization, it is observed that choice process involved is affected by satisfying rather than optimizing. Therefore, the factors individual personality and values, group relationships, organizational power relationships and political behavior they all can have significant effects on the decision-making. According to Daft (2009), the culture that prevails in the organization is composed of individual personality and values, and group relationship. These signify the organization power relationship in an organization; while together organizational culture affects the decision-making process in the organization. It is argued that the decisions made within organizations affect various stakeholders including employees, management, suppliers, customers and shareholders. However, customers, suppliers and shareholders have great influence on the decision-making of the organization but the process of decision-making is largely affected by the employees and management levels of the organization. According to Connolly (2000), decision-making process within any organization has profoundly effects on the employees and in most cases; employees are involved in the decision-making process. Moreover, organizations are group of individuals and individuals reflect their personal traits in their decisions they make. 


According to Pennings (1986), personality traits of an individual shape, the behavior especially within an organization and certain behavior of individual contribute to determine the behavior of individual matters in the organization. While arguing the effects of personality differences and values on the decision-making, Shapira (2002) defines that personality is considered as total sum of the ways individual reacts to and interacts with others. The reaction of a person in an organization determines the needs and desire of him. Thus, organizations tend to come up with such decision that is less likely to be rejected by large group of individuals in the organization.

According to Robbins et al (2008), group relationship exists within every organization and these relationships are very much affected by the group dynamics such as group behavior, values and attitudes to certain situation. As defined by Salaman (2001), group relationships within organizations are very strong in terms of their effects on the organizational process. However, group relationship is the important part of organizational culture but group relationship is separated at the point of decision-making process in the organization. Moreover, power relationship within organization is viewed as intervening process in the development of organization, attributes of group relationship can affects as group decision that is characterized as a multi-phased process.  In the multi-phased process, organizations employ multiple bases of power and the interaction dynamics affect the power relationship within organization (Robbins et al 2008). The effects of the individual personality and values, group relationship, organizational power relationship and political behavior are assessed on the decision-making process within organization. According to Roth and Mullen (2002), however, organizations are keen to accomplish the satisfaction rather than optimization, based on descriptive model of decision-making different factors that influence this process can make the process to deviate the rational model of decision-making.

As identified above, the rational model of decision-making involves the rational or reason based decision-making process. It is further based on utilization of cognitive skills such as understanding and identification thus rational model suggests the decision-making process to be done through cognitive process. Factors that influence the decision-making in the organization, on the other hand, are deviant to suggestive model as making decision based on behavior, relationship, power and other political behavior actually eliminates the core purpose of rational model of decision-making (Shapira 2002). It can be understood by the example of a decision that is to be made within organization and important gain of the decision can be achieved in the form of financial benefits but, the individual in charge to make decision personally is not in favor of the decision due to his value-based conflict, he will not make the decision. Other example of such deviation is those group dynamics that exist within organization in the form of intangible group values, behavior and attitude by supporting or opposing influence the decision-making in the organization. Such approach to decision-making is unlikely to rational model of decision-making that does not fulfill the reasoning requirement for decision-making process.


This paper identified decision-making process within organization and rational model of decision-making that is based on cognitive biases. Moreover, descriptive decision-making model is found as organizational decision-making model in which decisions are made to satisfy rather than optimize. However, the aim of the paper was to analyze the factors critically that affect the decision-making process in the organization the analysis shows that organizations is the composite of different individuals who together make groups. Individuals and groups with their personal as well as group traits can have great influence on the decision-making process of organization. Although such influence is found deviant to rational model because such influence on the decision-making process can have negative effects on the outcomes of the decision. Moreover, organizational power relationship and political behavior are such organizational dynamics that prevent the rational approach for decision-making while irrational approach for making decision can remarkably lead to unexpected and uncertain result of decision within organization (Robbins et al, 2008).


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