§ The principles involved in managerial decision making and effective problem solving.

The Rational Decision Making emerges from Organizational Behavior. The process is one that is logical and follows the orderly path from problem identification through solution. The Rational Decision Making is a seven step model for making rational and logical reasons: Define the problem
The very first step which is normally overlooked by the top level management is defining the exact problem. Though we think that the problem identification is obvious, many times it is not. The rational decision making model is a group-based decision making process. If the problem is not identified properly then we may face a problem as each and every member
· It assumes a rational, reasonable, non – political world. The Bounded Rational Decision Making Model: a realistic approach
The Rational Decision Making Model, amongst its many assumptions assumes that there is a single, best solution that will maximize the desired outcomes.
Now, the bounded rationality model says that the problems and the decisions are to be reduced to such a level that they will be understood. In other words, the model suggests that we should interpret information and extract essential features and then within these boundaries we take a rational decision.
The model turns towards compromising on the decision making process though it is a structured decision making model. The decision maker takes the decision or is assumed to choose a solution though not a perfect solution but “good enough” solution based on the limited capacity of the group leader to handle the complexity of the situation, ambiguity and information. The steps involved in the decision making are alike to the rational decision making process the model assumes that the perfect knowledge about all the alternatives are not possible for a human being to know. Hence, based on the limited knowledge he takes a good enough knowledge though not a perfect decision.
To cut the long story short we can say that the decision that is taken is rational but is taken in a bounded area and the choice of alternatives is though not perfect is nearer to the perfect decision. In