Question

How effective is rational decision-making for business decisions?

How can it conflict with transformational or visionary leadership goals?

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Answer 1

Rationality in every decision making of business is integral to successful carrying of its operations. It acts as a benchmark to choose between the options based on the critetia of rationality for making effective decisions.

Rational decision making refers to making use of critical and structured thought process and analytical and calculated approach, through which decisions taken demonstrate genuinity, reasonability, logic and critical thinking.

Therefore for ensuring that each decision proves effective and efficient for the organisation it is necessary that decisions are analysed and evaluated in terms of rationality so that their true impact is known and choices are made only after being observant of its outcome.

Rationality in decision making enables the businesses to optimize the decision choices so that the choice ultimately made provides the maximum amount of utlity.

The choice made through applying the rational decision making tends to satisfy the objectives, preferences and goals of organization in a much better manner as the process of rational decision making involved taking into consideration the problem areas, anticipating risks in advance , being observant of changes that might take place and then comparing the alternatives on the basis of cost benefit analysis then only taking a decision.

Rationality will further ensures that decisions are in logical consistency, based on facts and unbiased of the circumstances prevailing. It aims to eliminate the uncertainty involved and promotes a deep analysis of the choices in light of what can happen not what is expected to happen.

Transformational or visionary leadership goals aims at transitioning the organization from that of the current state to the advanced or an improved one. These goals are actually the result of dynamic environment which keeps on changing and brings with it the risk of becoming obsolete and lacking behind in efficiency or competition. This transformational leadership goals aims at advancing to the latest techniques , methods without taking much into consideration the facts whether the change benefits the organization in short and long term ,or are they really going to improve the organization.

So these leadership goals tend to take the organization towards the latest methods so that it stays current and aloof of competition, but rational decision making rather first looks at the rationale of changing to latest method by analysing and evaluating the transitioning process to ensure it is reasonable for every party on which it outs impact.

Transformational goals look at the process , while rational decision making rather looks at the consequences or outcome in advance and compares it with the present scenario to ensure it really improves the organization in every manner.

Rational decision making thus can conflict with transformational or visionary leadership goals because of the differences in the nature of making a decision and looking at factors , before making a decision.

For instance transformational leadership will consider upgrading to new machine just because it is the latest technique of performing a job and is undertaken by most of the competitors in the industry and also yields better productivity, but the rational decision making will rather first evaluate the decision of introducing new machine in light of its impact on each area of organization and its likely consequences which might defeat the likely reason of introducing the machine.

E. G transformational leadership goal will see, "that the machine will increase productivity by double" thus should be introduced for increasing effeciency and will also increase knowledge base.

While rational decision making will also see beyond this, it will see the possible resistance from employees that could be faced while its implementation , the turnovers, decrease in employee loyalty, forceful termination as the machine will replace some staff and the long term impact of all such factors which will eventually undermine the benefits from introducing the new machine.

So rational decision making addresses to each fact in logical sense and then only makes one.

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