3.3 Decision Making
3.3.2 Decision Making Theories
78 the explicit structure such as when people have the capability of managing settings with complexity without having to convert them by a specific function is an implicit structure of mental information process that differs from the known techniques of analytical process (Julmi 2019).
In Simon’s view on intuition, the efficacy of either intuition or analytical decision making cannot be gauged and also the view does not acknowledge the possibility of the mental process occurring concurrently as opposed to in a systematic order. Moreover, the view intuition is rational is attributed to the fact that it incorporates analytical process but recognizes the habitual element (Julmi 2019). In the view,
familiarity acknowledgment is linked to past decisions that are methodologically formulated but present studies indicate that familiarity is connected to concurrent mental processing (Julmi 2019).
79 In this theory, the selections denote the partialities and the theory is described by two approaches. Firstly, is the analytical method in which decision makers initially decide on the selection and then relate to their anticipations by checking the utilities only while the second is synthetic scrutiny where decision makers combine the estimates for utilities and their possibilities to find a choice and is applied when
decision makers understand their wants, the manner to attain them and the selections to pick (Oliveira 2007). Notably, decision-making scenarios are different and thus
dissimilar utility illustrations and research has shown that people change their decision measures with time and decision scenarios (Embrey 2019)
Rational Choice Theory
Rational choice theory is a general phrase encompassing a number of models that are used to explain the social phenomena as the results of individual actions that can be understood to be rational (Wittek, 2013). Ganti (2019) conceptualizes the rational theory by explaining that people depend on rational calculations to achieve results that are in line with their personal objectives. Fundamentally, decisions based on this theory give individuals the best satisfaction or benefit considering the available choices. Notably, people utilizing this theory are suited by the results of the choices they make because they are in the highest self-interest (Ganti, 2019).
The rational choice theory is widely used by the mainstream academic theories and assumptions; the supposition suggests that individuals are in a state where they constantly strive to optimize their gains while simultaneously minimizing the losses that they are likely to face. The specific elements of this theory include the person’s
preferences, belief, and constraints (Wittek, 2013). The term preferences refer to both the positive and the negative evaluations that are attached to the possible results of a
80 choice by the people. Preferences can have several bases, for example, the tastes for food or any other things that are culturally transmitted. Belief refers to the relations between the cause and the effect; this includes the perceived possibility that a person’s actions will give a different possible result (Wittek, 2013). For example, one thinking that pursuing a particular academic course (A) has high chances of securing him or her a job than pursuing course B. Constraints refer to the limit of the specific actions done by an individual, for example, the amount of money one has will determine the quality and quantity of items one will buy when he or she goes out for shopping.
Like all theoretical conceptualizations, the rational choice theory founded on a number of assumptions. Over time researchers have identified three prominent
suppositions of this theory (Wittek, 2013). The first assumption poses that individuals are motivated by innate selfish desires or preferences (Wittek, 2013). Secondly, the rational choice theory poses that individuals seek to maximize their own utility; and thirdly, individuals carry out their decisions and respective actions independently depending on full information available to them (Wittek, 2013).Notably, there exist several variants of this theory depends on the degree to which the suppositions of the neo-classical model are held where the rational choice explanation is in “thin” versus the sociological ones, in which the above-mentioned strict assumptions get relaxed. The differences manifest themselves in three ways: (1) the type of rationality, (2) preference and; (3) individualism assumptions.
Rationality
The neo-classical economics (Thin versions of rational choice theory) make assumptions of full rationality. This is in the sense that persons must be fully informed about all the alternatives, the possibilities for their results, the consequences of their
81 decisions (Glen, 2011). As respects the discernment or handling of the data, there are no intellectual constraints (Glen, 2011). Individuals settle on choices dependent on the estimations that look to profit them as far as expense and choose an elective that brings forth the most noteworthy anticipated utility. Models of bounded rationality, for
instance, serve to loosen up the accompanying suppositions: Selective consideration has a constraint on the sum and sort of data, and restricted data handling abilities lead to satisficing as opposed to amplifying (Glen, 2011); the suspicion that individuals have an inclination of tolerating arrangements that are "adequate." The later "thick" social judiciousness models do give explicit conditions under which conditions expansion of increase and other reasonability attributes contained in full-or limited discernment methodologies will control human basic leadership, and under which conditions different procedures, for example, learning or programmed reactions, will manage conduct (Ganti, 2019).
Preference
In the “thin” models of the theory, individuals are perceived to be selfish and egoistic, struggling towards material gain maximization (Wittek, 2019). The selfishness in this setting is typically the one that is an advantage where one defies the guidelines so as to fulfill the needs of their targets (Glen, 2011). “Thicker” variants of the theory make an assumption that a person’s behavior can be inspired by social preferences; this means that they are concerned with the well-being of other people. The benefits
struggled for by individuals as per this theory are not necessarily materialistic, but also psychological and social benefits (Ganti, 2019).
82 Individualism
Every one of the clarifications of the balanced decision hypothesis depends on the suspicion that each clarification of societal level outcome needs a conduct
hypothesis of individual acts as the ground. This is what has grown to be known as
“individualism.” In the methodological individualism, relevance is not attached to the social structures as behavioral constraints (Wittek,2019). This follows the fact that all the information that is required is encompassed in the subjective meanings or the objective prices of goods. In the structural individualism, social and institutional connectedness is considered as being the conditions that affect the behavior and the decisions of a person (Wittek, 2019).
Critics of the Rational Choice Theory
Indeed, even with the above data, the levelheaded decision hypothesis, been rebuked by different commentators that the balanced decision hypothesis has a few issues related to it. The principal analysis of this hypothesis is the way that it is
excessively individualistic. As indicated by Crossman (2019), the hypothesis neglects to clarify and assess the way that enormous social structures exist. This is concerning the way that there are social structures which can't be decreased to the demonstrations of people and along these lines, it must be clarified utilizing various terms (Crossman, 2019).
The second set of critics argue that the rational choice theory there is a problem with explaining collective action (Crossman, 2019). In explaining this critique,
Crossman (2019) poses the question “if the individuals’ actions are based on the calculations of personal profit or benefit, why would they ever choose to do something that will benefit others more than themselves?” The third critique is that the theory that
83 does not give an explanation as to why other people seem to accept and adhere social norms of behavior which cause their activities to be selfless or to have a feeling of a sense of duty that overrides their own interests (Crossman,2019).
Attribution theory
The attribution hypothesis is a mental hypothesis whose design is an endeavour to clarify individuals' conduct (Grimsley, 2018). The originator for this hypothesis is Bernard Weiner (1935). McLeod (2012) while characterizing the hypothesis cites Fiske and Taylor (1991, p 23) that "Attribution hypothesis manages how the social perceiver utilizes the data to land at causal clarifications for occasions. It looks at what data is accumulated and how it is consolidated to frame an easy-going judgment." This hypothesis is owing to the way that individuals are dependably guileless analysts who endeavour to persistently comprehend the social world (McLeod, 2018). As indicated by this hypothesis, each individual will need to comprehend why they do a few go about just as why other individuals do what they do. It is an incredible model that decides whether an individual's conduct brought about by inner or outer components; therefore, it is a significant model when one needs to achieve a choice in employment choice. The attribution to which conduct an individual has is identified with three factors to be specific: peculiarity, consistency, and accord (Robbins, Judge, Millet and Boyle 2011).It helps us in the explanation of the persons taking part in a job interview, both the
interviewers and the interviewees. Silvester (1997) showed that, for the interviewers, the theory can be important in that it helps explain the ratings that are given to the
interviewees by them. The understanding of the causes of certain behaviours can have an effect on the judgment and consequently on the acts of the employees and even the employers in an organization.
84 Heider put forward two major ideas that form an integral part of this theory, the dispositional (internal causes) and the situational (external causes). The dispositional attribution generally blames the cause of a person’s certain behavior to some of his or her internal characteristics, and not external forces. A person’s behavior is often attributed to their own personality, beliefs, and motives (McLeod, 2018). According to McLeod (2018), situational attribution is the process where the cause of a certain behavior is assigned to a situation or an event that is outside the person’s characteristic or his or her control. These external factors include situational or environmental features.
Attribution of a person’s behavior is a three-step process: first, it must be observed that someone’s behavior is his own behavior or it is a behavior of someone else; secondly, an observation must be made to determine whether the behavior that is being observed is intentional or not and; the behavior is attributed. While someone’s behavior is being attributed, the three things that must be considered include the following:
Is the behaviour a result of an external or an internal cause?
It must be observed to ascertain when the causes of the person’s behaviour are internal or external. Internal causes as far as attribution are concerned are the factors that are attributable to the individual that is being observed (McLeod, 2018). If an employee is promoted and other employees not, one is likely to believe that the reason for that employee’s promotion is the exemplary work that he or she has done during his or her past employment. By believing so, that person will have just attributed the internal causes to the person’s promotion. Facades causes are those components that are outside of the person who is the subject to the perception (McLeod, 2018).
85 Social Choice Theory
Kenton (2018) defines this theory as “an economic theory that considers whether a society can be ordered in a way that reflects the individual’s preferences.” The theory was developed by Arrow (1951). This hypothesis offers a conversation starter with respect to whether it is conceivable to get a standard that assembles the inclinations, decisions, votes, and choices in a way that fulfils the negligible criteria to for what ought to be viewed as a decent guideline. The theory puts all of the individual’s choices into consideration, and not just the political ones. Arrow (1951) gives five specific conditions which must be met by a society’s choices in order for them to be regarded as reflecting the choices of its individuals. The conditions include responsiveness,
universality, non-imposition, independence of irrelevant alternatives and non- dictatorship.
Positive political theory
Smith and Banks (1999) lay forth an explanation that the theory “is concerned with the formal theory of preference aggregation for collective choice.” The theory is general in that it covers the classes of aggregation methods including the famous majority and unanimity rule and also focuses on the degree to which any given aggregation method is guaranteed result in what is deemed as best alternatives.
Belief system model theory
There is a general belief system which can be termed as a deep-rooted belief or ideology. This theory is based on the widespread belief that in decision making, beliefs and ideologies play a very significant role to influence the kind of decisions reached by an individual. This follows that if decisions are to be rational, then they are not
supposed to be subjected to the influence of beliefs and ideology. This argument,
86 however, does not stand the test or reality. If the ideology or belief is of a pervasive nature, then the person making the decision has to place significant weight to it and give priority to it in his or her decision-making process. For a communist nation, the
policymakers won't settle on such a choice because of the way that such an arrangement will without a doubt be infringing upon the standards and conventions of socialism, in spite of the fact that sanity is sought after of such infringement.