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Approaches to Decision Making Paper

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Approaches to Decision Making Paper

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May 12, 2013

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Approaches to Decision Making Paper

A health care organization is experiencing increased costs for staffing and overhead. Management must determine how to reduce costs without compromising patient care and safety. This paper will explore rational decision-making and bounded rationality, two decision-making approaches that the health care organization can use for determining how to reduce costs. This paper will also explain why making a group decision is better than a decision by an individual, as well as list the advantages and disadvantages of group decision-making.
According to Robbins, DeCenzo, and Coulter there are three decision-making approaches. These three approaches are rational decision-making, bounded rationality, and intuitive decision-making. In order for management of the health care organization to determine how to reduce costs they can use rationality or bounded rationality. Making a rational decision requires complete knowledge of the problem, all possible solutions, and the consequences of each solution. The decision maker must use logic and objectivity to determine which solution option will achieve the company’s goal. Rational decision-making will be challenging for the managers because it is unrealistic to analyze every detail of each solution option and the associated risks of each. Using bounded rationality will allow the management team to satisfice, or come up with a solution that is “good enough” (Robbins, DeCenzo, & Coulter, “Chapter 3, Foundations of Decision Making, What is Bounded Rationality,” 2011). Rational will still be used, however it will be done within the bounds of management’s ability to process information (Robbins, DeCenzo, & Coulter, “Chapter 3, Foundations of Decision Making, What

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