Human Resources Rational decision making: Rational decision making brings a structured or reasonable thought process to the act

of deciding. The choice to decide rationally makes it possible to support the decision maker by making the knowledge involved with the choice open and specific. This can be very important when making high value decisions that can benefit from the help of tools, processes, or the knowledge of experts. He argued that the process of rationalization, once unleashed upon the world, transformed social life forever. By loosening the hold of custom and tradition, rationalization led to new practices that were chosen because they were efficient, rather than customary. Weber argued that because of the technical superiority of the bureaucratic form, it would come to dominate all forms of human organizations like an iron cage in which humans were eternally trapped. Four types of rationality lie at the heart of Webers theory of rationalization. Practical rationality is to be found in peoples mundane, day-to-day activities and reflects their worldly interests. In his terms, through practical rationality people seek the methodical attainment of a definitely given and practical end by means of an increasingly precise calculation of adequate means. Therefore, actors calculate all possible means available to them, choose the alternative that best allows them to reach their ultimate end, and then follow that line of action. All human beings engage in practical rationality in attempting to solve the routine and daily problems of life.

Theoretical rationality involves an increasingly theoretical mastery of reality by means of increasingly precise and abstract concepts (Weber, 1958, p. 293). Among other things, it involves logical deduction, the attribution of causality, and the arrangement of symbolic meanings. It is derived from the inherent need of actors to give some logical meaning to a world that appears haphazard (Kalberg, 1980). Whereas practical rationality involves action, theoretical rationality is a cognitive process and has tended to be the province of intellectuals.

Substantive rationality involves value postulates, or clusters of values, that guide people in their daily lives, especially in their choice of means to ends. These clusters of values are rational when they are consistent with specific value postulates preferred by actors (Kalberg, 1980). Substantive rationality can be linked more specifically to economic action. To Weber (1921/1968), economic action is substantively rational to the degree to which the provisioning of given groups of persons with goods is shaped by economically oriented social action under some criterion (past, present, or potential) of ultimate values, regardless of the nature of these ends. Thus, substantive rationality involves a choice of means to ends guided by some larger system of human values.

Formal rationality involves the rational calculation of means to ends based on universally applied rules, regulations, and laws (Kalberg, 1980). Formal rationality is institutionalized in such large-scale structures as the bureaucracy, modern law, and capitalist economy. The choice of means to ends is

determined by these larger structures and their rules and laws. In looking for the best means of attaining a given objective under formal rationality, we are not left to our own devices, but rather we use existing rules, regulations, and structures that either predetermine the optimum methods or help us discover them. This, clearly, is a major development in the history of the world. In the past, people had to discover such mechanisms on their own or with only vague and general guidance from larger value systems. Now, we no longer have to discover for ourselves the optimum means to some given end, because that optimum means has already been discovered: it is incorporated into the rules, regulations, and structures of our social institutions. Profits are the primary focus rather than issues of humanity

Rational decision making brings a structured or reasonable thought process to the act of deciding. The choice to decide rationally makes it possible to support the decision maker by making the knowledge involved with the choice open and specific. This can be very important when making high value decisions that can benefit from the help of tools, processes, or the knowledge of experts.

Characteristics of rational decision making

Choosing rationally is often characterized by the following:

Decision making will follow a process or orderly path from problem to solution. There is a single best or optimal outcome. Rational decisions seek to optimize or maximize utility. The chosen solution will be in agreement with the preferences and beliefs of the decision maker. The rational choice will satisfy conditions of logical consistency and deductive completeness. Decision making will be objective, unbiased and based on facts. Information is gathered for analysis during the decision making process. Future consequences are considered for each decision alternative. Structured questions are used to promote a broad and deep analysis of the situation or problem requiring a solution. Risk and uncertainty are addressed with mathematically sound approaches.

In the ideal case, all rational decision makers would come to the same conclusion when presented with the same set of sufficient information for the decision being made. This would suggest that collaborative decision making will often employ a rational decision making process.

Problems and limitations with choosing rationally

Most of the issues and limitations associated with rational choice result from falling short of the ideal proscribed in the full rational decision making model. Here are three areas that generate much of the concern.

1. Limits of human capabilities - The limits on our human ability to gather, process, and understand all the information needed to optimize a decision outcome make it impractical to meet the ideal except in very constrained or simple situations. We have limits in our ability to formulate as well as solve very complex problems. Our desire to optimize is also limited, and we will usually "saticfice", or be content with acceptable solutions when confronted with obstacles. 2. Limits on information and knowledge - The model assumes we should or can gather sufficient information in terms of quantity, quality, accuracy, and integrity. It also assumes that we have access to the required knowledge of the cause and effect relationships that are important to the evaluation of alternative solutions, particularly with respect to projecting future consequences. 3. Limits in time - Search for the optimum solution will generate a delay that could negatively impact the benefits of the chosen alternative. In essence, if the decision alternatives are not properly discounted for changes due to decision timing, the chosen alternative may not be optimum.

More on decision making models

As with any ideal, additional models have been developed to address the problems with realizing the full rational model. The Bounded Rationality model acknowledges our cognitive and environmental limits and suggests that we act rationally within these constraints. Many decision making theories are a result of looking at the consequences of bounded rationality. Rational ignorance takes a similar approach to looking at the cost of gathering information. In this model, it is suggested that if the cost to acquire information exceeds the benefits that can be derived from the information, it is rational to remain ignorant. This aligns with our concept of using decision value to limit the decision effort, ensuring an appropriate return from using a rational decision making process (See planning decision making).

The benefits of rational choice

Within the limitations described above, choosing rationally can provide a number of benefits that include:

Addressing complex decisions by breaking them down Characterizing decision problems and goals to ensure addressing all needs and desires Being aided by structured techniques, mathematics, and computers Ongoing improvement when codified in a process, procedure, or program A long list of decision making techniques and tools with proven usefulness A growing capability to analyze and access the information that can improve guidance based on the facts

While unable to meet the requirements of the full rational decision making model, this ideal serves as a valuable approximation that supports predictions and decision making with increasingly broad application. Rational approaches continue to provide the standard for effective decision making when considered in light of current limitations. Coping with complexity and information overload will place greater demand on enhancing capabilities that support rational choice.