The perspective of decision making

The decision making process involves evaluatinga scenario from different angles, orperspectives, in order to identifysolutions that will lead to the desired outcome.87Three mainperspectives on decision making are rationality,limited rationalityand intuition. Rationaldecision making meansmanagers make sustainable solution that maximizes value under theconditions of specific limitations. Whenmanagers take rational decisions but are limitedfrom their ability toprocess information, thispresents rational limited decision taking.Whereas intuitive decision making iswhen the decisions are taken based on experience, feeling and accumulated judgment. The right solving of problems is mainly intuitive anddecision takingresults from the unclear mixture of experience, immagination, intellegenceand feeling joined with conscience.

Depending from the nature of problem, the manager may take different type ofdecisions. When we have to deal with structural problems the decision making isprogrammed while when we have to deal with unstructured problems it is not programmed.Managers try to takegood decisions because theywill be judged based on the results of thosedecisions. It is known that managers often disregard regulations and norms when they haveto take decisions underrisk and uncertainty. An attention also must be paid to the context ofdecisions that means to analyse the structure of organisation and its organisation culture.

Attitude to risk on decision making

Risk management is difficult process and its purpose is to save property, capital orprofit of organisation bydecreasing the potentialof loses. Risk management may be defined as making decision for the activities by whichwould be decreased theprobability and theconsequences of unpleasant effects that may be done only through identifying and assessingrisk.Researches tried to study the role of risk in theirfield of interest. According to researches P. Slivic89(2000) and P. More (1983)90people percept therisk in different waysdepending from the field of work. One valuable definition for risk in the decision makingfield introduced authors H. Raiffa and R.DLuce91, who make the distinction of threeconditions that managers are faced with while taking decisions:

1.Security-accurate decision making because results of each alternative are knowntherefore managers may take secure decisions.

2.Risk–each action leadsto one of specific results, where results of alternatives cannotbe evaluated. The ability of determining probability may be the result of previous experienceor of secondary information.

3.Unsecurity-actions may lead to a group ofconsequences, but where theprobabilityof result is completelyunknown. For decision maker the securityand justification for settlingan alternative is missing.

In generally managers are not inclined to accept risk. Some studies showed thatmanagers do not accept that risk by which theyare faced with is inseparable with situationand they simply move its acceptance by considering it as controllable issue.