Rational Decision Making in Business?




September 25, 2012

In business contexts, generally speaking, we believe we act as rational beings. The rise of Business Intelligence and the wonders of Number Crunching and Big Data make us believe we have entered the era of rational decision making.

It appears to me that this way of thinking is similar to what has been observed in the economic sciences. For long, men was thought of as a rational being, making rational choices. It has taken Kahneman, Tversky and others several decades to counter this supposition.

Could it be that the belief in a solely rational business logic is equally false? We have reasons to believe so. The good thing is, one can be a fan of Big Data but nevertheless keep in mind that:

Rationality is just like perfectionism: It can be nice to aim for, but attaining it may take too much effort.

PS: Please note that non-rational does not imply irrational.