RATIONAL DECISION MAKING AND FIRM PERFORMANCE: EMPIRICAL EVIDENCE FROM SMEs IN THAILAND
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Published:
Dec 27, 2019
Keywords:
Rational decision making Performance SMEs Decision making
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Abstract
The purpose of this paper is to investigate the effects of rational decision making on business performance of the SMEs in Thailand. This research was conducted by using questionnaires as research instruments for collecting data from 247 executives of the SMEs in Thailand. The research found that the rational decision making in aspect of identifying problem, gathering information and evaluating alternatives (EA) are significantly and positively correlated to the firm’s overall performance. This research can be used as a guideline for the SME executives to create a business strategy and make an effective decision on business in order to improve their firm’s performance.
Article Details
How to Cite
Yu, B., & Raksong, S. (2019). RATIONAL DECISION MAKING AND FIRM PERFORMANCE: EMPIRICAL EVIDENCE FROM SMEs IN THAILAND. Panyapiwat Journal, 11(3), 163–177. retrieved from https://so05.tci-thaijo.org/index.php/pimjournal/article/view/232470
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Research Article
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References
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Bingham, C. & Eisenhardt, K. (2011). Rational Heuristics: the ‘Simple Rules’ that Strategists Learn from Process Experience. Strategic Management Journal, 32(13), 1437-1464.
Blenko, M., Mankins, M. C. & Rogers, P. (2011). Decide and Deliver: Five Steps to Breakthrough Performance in Your Organization. USA: Bain & Company.
Calabretta, G., Gemser, G. & Wijnberg, N. (2016). The Interplay between Intuition and Rationality in Strategic Decision Making: A Paradox Perspective. Organization Studies, 38(3-4), 365-401.
Daft, R. (2010). Management (9th ed.). Mason, Ohio: South-Western Cengage Learning.
Das, T. & Teng, B. S. (1999). Cognitive Biases and Strategic Decision Processes: An Integrative Perspective. Journal of Management Studies, 36(6), 757-778.
Dean, W. J. & Sharfman, M. P. (1993). Procedural rationality in the strategic decision-making process. Journal of Management Study, 30(4), 587-610.
Dehaghani, M. V. & Badiei, A. (2014). The role of rational decision-making in the improvement of financial performance of Mellat Bank of Isfahan city. WALIA Journal, 30(S1), 55-62.
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Hair, J. F., Black, W. C., Babin, B. J. & Anderson, R. E. (2010). Multivariate Data Analysis (7th ed.). New Jersey: Prentice Hall.
Hammond, J., Keeney, R. & Raiffa, H. (1998). The Hidden Traps in Decision Making. Retrieved July 19, 2017 from hbr.org
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Institute for Small and Medium Enterprises Development. (2017). SMEs statistic report. Retrieved July 19, 2017, from https://203.154.140.77/sme/Report [in Thai]
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Kaufmann, L., Meschnig, G. & Reimann, F. (2014). Rational and intuitive decision-making in sourcing teams: effects on decision outcomes. Journal of Purchasing & Supply Management, 20(2), 104-112.
McGregor, L. (2010). Improving the quality and speed of decision making. Journal of change management, 2(4), 344-356.
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Shadmehr, R., Huang, H. J. & Ahmed, A. A. (2016). A representation of effort in decision-making and motor control. Current Biology, 26(14), 1929-1934.
Skýpalová, R. & Blaskova, V. (2015). Development of the corporate social responsibility concept in Small and Medium-Sized Enterprises. Prague Economic Papers, 25(3), 1-17.
The Center for Economic and Business Forecasting. (2017). SMEs Competitiveness Index. Retrieved July 20, 2017, from https://cebf.utcc.ac.th/upload/index_file/file_th_270d29y2017.pdf
Zeni, T. A., Buckley, M. R., Mumford, M. D. & Griffith, J. A. (2016). Making sense of ethical decision making. The Leadership Quarterly, 27(6), 838-855.
Anderson, B. F. (2002). The three secrets of wise decision making. USA: Single Reef Press.
Arevuo, M. (2013). The Impact of Decision-Making Biases on Strategic Management. Retrieved July 16, 2017, from https://medium.com/@mikko_arevuo/the-impact-of-decision-makingbiases-onstrategic-management-4a925932ff6b
Avino, Z. B. (2013). Top management team diversity, quality decisions and organizational performance in the service industry. Journal of Management and Strategy, 4(1), 113-123.
Ayyagari, M., Kunt, A. D. & Maksimovic, V. (2014). Who creates jobs in developing countries?. Small Business Economics, 43(1), 55 -99.
Bingham, C. & Eisenhardt, K. (2011). Rational Heuristics: the ‘Simple Rules’ that Strategists Learn from Process Experience. Strategic Management Journal, 32(13), 1437-1464.
Blenko, M., Mankins, M. C. & Rogers, P. (2011). Decide and Deliver: Five Steps to Breakthrough Performance in Your Organization. USA: Bain & Company.
Calabretta, G., Gemser, G. & Wijnberg, N. (2016). The Interplay between Intuition and Rationality in Strategic Decision Making: A Paradox Perspective. Organization Studies, 38(3-4), 365-401.
Daft, R. (2010). Management (9th ed.). Mason, Ohio: South-Western Cengage Learning.
Das, T. & Teng, B. S. (1999). Cognitive Biases and Strategic Decision Processes: An Integrative Perspective. Journal of Management Studies, 36(6), 757-778.
Dean, W. J. & Sharfman, M. P. (1993). Procedural rationality in the strategic decision-making process. Journal of Management Study, 30(4), 587-610.
Dehaghani, M. V. & Badiei, A. (2014). The role of rational decision-making in the improvement of financial performance of Mellat Bank of Isfahan city. WALIA Journal, 30(S1), 55-62.
Dye, R., Sibony, O. & Truong, V. (2009). Flaws in strategic decision making: McKinsey Global Survey results. Retrieved July 17, 2017, from https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/flaws-in-strategic-decision-making-mckinseyglobal-survey-results
Evans, G. W., Honkapohja, S. & Mitra, K. (2010). Does Ricardian equivalence hold when expectations are not rational? Retrieved October 24, 2017, from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1601311
Flueler, T. & Blowers, A. (2007). Quality in decision making process, Insights, COVARN 2 WPs project, pp.13-15.
Hair, J. F., Black, W. C., Babin, B. J. & Anderson, R. E. (2010). Multivariate Data Analysis (7th ed.). New Jersey: Prentice Hall.
Hammond, J., Keeney, R. & Raiffa, H. (1998). The Hidden Traps in Decision Making. Retrieved July 19, 2017 from hbr.org
Hastie, R. & Dawes, R. M. (2000). Rational choice in an uncertain world: The psychology of judgment and decision making. Thousand Oaks, CA: Sage Publication.
Institute for Small and Medium Enterprises Development. (2017). SMEs statistic report. Retrieved July 19, 2017, from https://203.154.140.77/sme/Report [in Thai]
Juliusson, E., Karlsson, K. & Garling, T. (2010). Weighing the past and the future in decision making. European Journal of Cognitive Psychology, 17(4), 561-575.
Kaufmann, L., Meschnig, G. & Reimann, F. (2014). Rational and intuitive decision-making in sourcing teams: effects on decision outcomes. Journal of Purchasing & Supply Management, 20(2), 104-112.
McGregor, L. (2010). Improving the quality and speed of decision making. Journal of change management, 2(4), 344-356.
Neuman, W. L. (2006). Social Research Methods Qualitative and Quantitative Approaches. Toronro: Peason.
OSMEP. (2007). SMEs definition. Retrieved January 20, 2018, from https://www.sme.go.th/upload/mod_download/%E0%B8%99%E0%B8%B4%E0%B8%A2%E0%B8%B2%E0%B8%A1%20SMEs.pdf [in Thai]
Robbins, S. P. & Judge, T. A. (2015). Organizational behaviour (15th ed.). New York: Peason.
Schermerharm, J. R., Hunt, J. G. & Osborn, R. N. (2011). Organizational behaviour (11th ed.). New York: Wiley.
Shadmehr, R., Huang, H. J. & Ahmed, A. A. (2016). A representation of effort in decision-making and motor control. Current Biology, 26(14), 1929-1934.
Skýpalová, R. & Blaskova, V. (2015). Development of the corporate social responsibility concept in Small and Medium-Sized Enterprises. Prague Economic Papers, 25(3), 1-17.
The Center for Economic and Business Forecasting. (2017). SMEs Competitiveness Index. Retrieved July 20, 2017, from https://cebf.utcc.ac.th/upload/index_file/file_th_270d29y2017.pdf
Zeni, T. A., Buckley, M. R., Mumford, M. D. & Griffith, J. A. (2016). Making sense of ethical decision making. The Leadership Quarterly, 27(6), 838-855.
