Decision Making

Decision Making

1. Phases of decision making

   • Step 1: Identify the decision
     • You realize that you need to make a decision. Try to clearly define the nature of the decision you must make. This first step is very important.
   • Step 2: Gather Information for Weighing Your Options
     • When making good decisions it is best to gather necessary information that is directly related to the problem. Doing this will help you to better understand what needs to be done in solving the problem, and will help to generate ideas for a possible solution.
   • Step 3: Consider the Consequences
     • This step can be just as important as step one because it will help you determine how your final decision will affect yourself, and/or others involved.
   • Step 4: Make Your Decision
     • Now that you have identified your goal, gathered all necessary information, and weighed the consequences, it is time to make a choice and actually execute your final decision.
   • Step 5: Evaluate Your Decision
     • Once you have made your final decision and put it into action, it is necessary to evaluate the decision and the steps you have taken to ensure that it works. This final step is probably just as important as step one, if not more important, because it will help you to further develop your decision making skills for future problems. This step is also fundamental because it may require you to seek out new information and make some changes along the way.

2. Decision making models

   • Rational Model
     • The rational model suggests that decision making is a fairly straightforward three stage process. In Stage One, the decision maker must identify and define the problem; in Stage Two, alternative solutions are generated to solve the problem; in Stage Three, a solution is selected and implemented. Simple; concise; rational.
   • Bounded rationality model
     • is the idea that rationality is limited, when individuals make decisions, by the tractability of the decision problem, the cognitive limitations of the mind, and the time available to make the decision.
   • Carnegie model
     • Carnegie Model: The Carnegie model refers to the decision taken on the organization level, which includes many managers, and the final decision will be taken by all the managers collectively regarding the problems and the goals of the organization.
   • Incremental model
     • the incremental model breaks down the decision-making process into small steps. The process of then moving between the steps is known as muddling through and is based on the combination of experience, intuition, guessing, and using different techniques. This model was developed by Charles Lindblom. A small number of alternatives and consequences are considered at each stage of the decision-making process. As a result, the costs of making a decision are minimized. As each step is proposing only a small change; the immediate effect is minimal and usually not disruptive. Other benefits of the incremental model are its simplicity and flexibility.
   • Garbage Can model
     • The garbage can model is an irrational model of decision-making, which assumes that problems, solutions and participants are disconnected and exist as separate organizational streams. Choice opportunities are initiated by the organization, but none or few problems may be solved in the process and then only by chance.