DECISION MAKING MODELS

WHAT IS DECISION MAKING:

The process of selecting a logical option from different options is called a decision making
process. It is used to take action to generate a particular result. It is usually considered to be
a rational and logical thinking process.
The first thing you should be aware of is the importance of critical thinking and its direct impact
on effective decision making. Critical thinking can be defined as rising what is subconscious in a
person's reasoning to the level of conscious recognition. Good leaders are usually critical
thinkers as they understand the mechanics of reasoning and are able to use this to manage the
unconscious influences that contribute and affect their decision-making process.
Generally, critical thinkers:

Continually question their own and other people's assumptions, reasons, motivations, and
outlook

Do not focus on contradicting others when questioning but focus on their reasoning and
perspective

Answer questions by asking more questions

TYPESOF DECISION MAKING:

There are two different ways of decision making:

Programmed/ routine decision making:These are routine decisions which are made
several times by managers. These are made by following several rules and principles.
Example: Deciding to reorder office supplies.

Unprogrammed /urgent decision making:

These are not routine decisions and have to make on some urgent basis or due to some unusual
situations that have not been often addressed. These decisions are made based on information,
and a mangers intuition, and judgment. Intuition and experience are major factors in these
decisions.
Example: Should the firm invest in a new technology?

DECISION MAKING MODELS:

Decision-making model describes the method a team will use to make decisions. The most
important factor in successful decision-making is that every team member is clear about how a
particular decision will be made. Who will be making the decision? How will team members be
involved? Knowing these things allows team members to be fully informed participants in
discussions - "Will we be giving input to the team leader so he can make the decision?" or "Will
we need to discuss this topic and come to agreement during this meeting?"
Classical model of decision making:
It is a prescriptive model that tells how the decision should be made. It assumes that managers
have access to all sort of information which is needed to reach a decision. This assumes that
managers are logical and rational and suppose that all decisions made will be in the interest of
the organization.
Rational model of decision making:

Rational decision making models involve a cognitive process where each step follows in a
logical order from the one before. It is based on thinking through and weighing up the
alternatives to come up with the best potential result. Rational decision making is itself a
multi-step process, from problem identification through solution, for making logically sound
decisions. It actually provides a structured and sequenced approach to decision making. Using
such an approach can help to ensure discipline and consistency is built into a decision making
process.
The process of rational decision making favors logic, objectivity, and analysis over subjectivity
and insight.
The approach follows a sequential and formal path of activities. This path includes:

The rational model assumes that:

An individual has full and perfect information on which to base a choice.

Measurable criteria exist for which data can be collected and analyzed.

An individual has the cognitive ability, time, and resources to evaluate each alternative
against the others.

The rational-decision-making model does not consider factors that cannot be quantified, such
as ethical concerns or the value of altruism. It leaves out consideration of personal feelings,
loyalties, or sense of obligation. Its objectivity creates a bias toward the preference for facts, data
and analysis over intuition or desires.

Identifying a problem or opportunity:

The first step is to recognize a problem or to see opportunities that may be worthwhile. A rational
decision making model is best employed where relatively complex decisions have to be made.

Gathering information:

What is relevant and what is not relevant to the decision? What do you need to know before you
can make a decision, or that will help you make the right one?

Analyzing the situation:

What alternative courses of action may be available to you? What different interpretations of the
data may be possible?

Developing options:

Generate several possible options. Be creative and positive.

STRENGTHS AND WEAKNESSES OF THE RATIONAL DECISION

MAKING MODEL:
The main strength of a rational decision making model is that it provides structure and discipline
to the decision making process.
It helps ensure we consider the full range of factors relating to a decision, in a logical and
comprehensive manner. However, we should always remember that whilst the model
indicates what needs to be done, its often how things are done that characterizes effective
decision making.
Paul C. Nutts research illustrates that bad decisions were usually bad because two things were
missing:
Adequate participation of stakeholders in the decision making process;
Sufficient time spent generating a range of possible solutions.
Too often those who should have been involved werent, and solutions were proposed and acted
upon too quickly. Often with disastrous effects!
A second weakness arises if we attempt to use the model in isolation. This is particularly
important where complex or important decisions are involved.
The principle assumption of the rational decision making process is that human beings make
rational decisions. However, there are numerous factors which determine our decisions, many of
which are not rational. In many situations decisions have to be made with incomplete and
insufficient information.