Models of Decision Making and Ethical Considerations in Organizations

Management Fundamental 1
Management Fundamental
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Management Fundamental 2
Introduction
The purpose of this paper is to critically analyze and examine the process of
decision making in organizations and companies that carry out business activities,
consultation and other goals and objectives. The process of decision making is critical
to any organization while determining policies, procedures, standards, practices and
judgments to be formulated and implemented. The main focus of this report is to
examine three decision-making models that can be applied by the management team of
any organization to initiate programs and policies. In that connection, we also focus on
ethical considerations in the decision-making process to satisfy the requirements of
ethics and codes of conduct. For the case of ethical consideration, the paper will focus
on a case study at Fair Work Ombudsman to consider the requirements of decision
making by organizations. Finally, recommendations and summary of the decision-
making process will be incorporated to guide organizations on how to make viable
judgments and feasible decisions in the future. The main recommendation in decision
making involves making decisions that are most productive to the organization.
Models of Decision Making
There are three main models used in decision making by managers in the
different organization regardless of goals and objectives of a company. Typically,
decision making refers to a process of selecting and making choices through
identification of decision, collecting relevant data and information, assessment of
necessary optional resolutions to facilitate the process of achieving goals and
objectives. Through the process of step-by-step decision making, managers can make
deliberate, thoughtful and organized decisions through analysis of various alternative
(Gerd, 2015). The decision-making models are rational or classical model, bounded
rationality model also known as administrative man model and intuition decision-making
model. In addition to these models, there is another model called retrospective decision
model also known as an implicit favorite model which will not be considered in this case.
Through analysis of these models, we will evaluate ethical considerations in the
decision-making process.

Management Fundamental 3
First, we evaluate the rational or classical model in the decision-making process.
Typically, rational model refers to a method used by selecting systematically all possible
choices and alternatives that are based on facts and reasons. In that connection, the
model is applied by managers and business organizations to make choices that
correspond to overall objectives. In that case, managers apply a series of analytical
steps to examine facts and reasons on alternatives to determine the most viable
alternative (Holmes et al., 2015). A business manager would as well apply this model to
observe all possible outcomes before deciding the most probable course of action to
undertake. For example, managers employ rational decision-making model to figure out
which project is most viable when compared to some projects (Gerd, 2015). This
decision-making process will be applied by business managers to provide guidelines on
how to proceed with new projects thereby ensuring success.
This model also considers ethical considerations in making decisions. The
decision-making process should adhere to all ethical considerations to avoid
compromising human aspects, rights, obligations, and privileges. For that reasons,
managers can use this model to make ethical decisions. In this model, managers have
sensitized that ethical and unethical decision making in an organizational context poses
a series of far-reaching implications since business activities are performed through
many transactions (Franz et al., 2010). It also involves many stakeholders from different
areas. In that connection, managers will be able to make ethical decisions because
rational decision-making process will enable them to collect data concerning the
particular business transaction. Again, the model will facilitate the step-by-step process
to verify all matters at hand in an ethical manner.
The second model to be considered is called bounded rationality model also
known as administrative man model. This model is used as an idea followed by
individuals to make decisions based on the limitation of tractability of the decision
problem. In this case, the decision maker is required to seek a satisfactory solution
rather than considering the optimal process in achieving solutions (Krugman et al.,
2012). The theory of bounded rationality model was initiated by an economist called
Herbert Simon. This theory states that people are not inclined to collect data needed in