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Decision Making Models

Share this page: Share Webmail / Other The four different decision-making models are: - Rational - Bounded Rationality - Intuitive - Creative All of these methods vary in terms of how experienced or motivated a decision maker is to make a choice. Chosing the right approach will make you a more effective manager. Making Rational Decisions This involves a series of steps that decision makers should consider if their goal is to maximized the quality of their outcomes. In this model, the most critical step is "Generate Alternatives," which can be the most challenging. A lack of alternatives can easily lead to failure. Failure can also occur during the "Choose the Best Alternative" step, when too much information is available. When more and more time is spent on gathering information and thinking about it, but no decision actually gets made, this is called analysis paralysis. Analytical thinkers are prone to falling into this trap. Because of this, there comes a time when a decision-maker must make a "good enough" decision. We refer to this as Bounded Rational Decision Making. Here the decision-maker places limits on the amount of information or the number of options considered in order to make a good but timely decision. Making Intuitive Decisions This refers to the process of arriving at decisions with little or no conscious reasoning. Most managers will admit to makeing intuitive decisions at least sometimes. When time pressures, constraints on available information, or changing conditions make rational decision making impractical, managers will often rely on experience in order to make a quick, intuitive decision. Experts in a field will scan the environment/problem for cues to recognizable patters. Once the pattern is recognized, the decision-maker can then evaluate the potential outcomes of a decision based on prior experience. Making Creative Decisions The generation of new, imaginative ideas is the pervue of Creative Decision Making. The five steps to creative decision making are similar to the other decision models in some ways. All problem solving involves problem identification and immersion. However, a key to the success of creative decision making is the incubation step. During incubation, the individual sets the problem aside and does not think about it for a while. During this time the brain is working on the problem unconsciously until the illumination step finally arrives. The decision-maker finally verifies and tests the decision in the final stage of the process. Decision making is closely linked to the problem solving process. Both are critical skills for a manager to possess. In order to excel, a manager should be able to engage in all of the above types of decision making, as appropriate to the given situation. The above image is made available through: CreativeCommons.org Derivative by Athivia College (2010), Original materials: Erdogan, Berrin., Bauer, Talya., and Carpenter, Mason., Principles of Management. Retrieved Apr 15, 2010 from http://www.flatworldknowledge.com/node/28982. Erdogan, Berrin, Bauer, Talya, , and Mason Carpenter. Principles of Management. 1969 . Flat World Knowledge. 15 Apr, 2010.