Decision making models fall into two general categories: rational and intuitive. These two broad categories provide variations to arrive at a decision in any situation. The rational decision-making model includes the Vroom-Jago system and a seven-step process. Recognition-primed decision-making models are considered intuitive methods. Managers and leaders often combine rational and intuitive models when faced with a problem or opportunity.
Rational decision making models employ a structured approach that is orderly and logical. A sequence of steps starts with identifying the problem or situation at hand, followed by compiling all the facts and information necessary to create a solution. Next, the data is analyzed for various options to determine which action might achieve the desired result. The final step in rational decision making involves acting on the preferred option and setting aside adequate resources to make it work.
Decision making models are tools that help individuals and organizations make better choices. There are a variety of different models available, but all share a common goal: to improve the quality of decisions. Some common Decision making models include the rational decision making model, the bounded rationality model (the satisficing model), Vroom-Yetton decision model, recognition-primed decision making model, and the intuitive decision making model. Each of these models has its own strengths and weaknesses, but all can be useful in the right situation. The key is to understand when to use each model and how to apply it in a way that will produce the best results. With the right decision making model, organizations and individuals can make choices that are more informed, efficient, and effective.
A decision-making model is a structured process used to guide teams to make decisions. Each decision-maker model uses different methods to help you analyze and overcome a particular challenge. Because decision-maker models take different approaches, they’re useful for people with different learning styles or time constraints.
Creative decision model
The creative decision model uses original ideas to create innovative solutions that achieve goals or overcome obstacles. This involves thinking through a situation and inventing a solution without referencing similar situations.
Often, you can use this model for situations you haven’t experienced before, like new projects or production issues. Using the creative decision model typically requires flexible thinking to create successful, unique solutions. You may follow these steps when using the creative decision-making model:
- Define your goal or obstacle: You may not have experience with your goal or obstacle, so it’s useful to define it as clearly as possible to help you understand what you need to do. This may involve meetings with your team or other colleagues, like business partners or managers.
- Consider relevant information: Do research on the challenge you need to solve to learn everything you can about it. This includes trying to find any similar projects, reports or companies that may inspire your ideas.
- Consider the information over time: You can choose how long to consider the information, but it’s helpful to take at least a day to think about your challenge passively. To do this, you may brainstorm ideas, talk with colleagues or make a word-association list.
- Create a usable solution: With the creative decision model, your idea may come naturally after a period of thinking about your goal or obstacle and the information relevant to it. Think through your solution logically to make sure it’s usable for your situation.
- Finalize your decision and take action: After considering the details of your solution, you may finalize your decision with your team and take action to solve your challenge. It’s helpful to have a draft or presentation of your creative solution to explain it to your team more easily.
Recognition-primed decision model
The recognition-primed decision model, created by Gary A. Klein in his book “Sources of Power,” uses quick thinking and prior experience to make decisions, often in fast-paced environments.
Team leaders may use this model to assess the basics of a situation and create a potential solution and then think through the solution to determine if it’s usable. This may require you to have a lot of experience with the goal or obstacle for you to create a suitable solution. The following steps can help you use a recognition-primed decision model:
- Define your goal or obstacle: Clearly define the goal or obstacle your team wants to achieve or overcome to make it easier for you to create a solution quickly. While the idea can be broad, try to identify the most important thing you need to decide.
- Consider relevant information and similar situations: Using your prior experience, quickly assess the situation and determine what information or prior situations can help you make a usable solution. If you have time, do more research on how to solve your goal or obstacle.
- Create a potential solution: Create at least one potential solution using your prior experience or additional knowledge about the situation. To quicken your decision process, try to create a generic solution so you can change or add details as you think through it.
- Consider if the solution works: Think through your solution to determine if it can really solve your challenge. Start by considering the most obvious issues and then consider the smaller details of the solution.
- If needed, change the solution: Your first solution may not produce the best outcomes, so change details about it if you need to. This may involve adding new actions to your solution, making it more specific or changing it altogether.
- Finalize your decision and take action: Once you’re confident in your solution, finalize the decision with your team and take action. In a fast-paced situation, you may have to change your solution again if you learn new information while taking action.
Rational/Classical decision model
The rational decision-making model focuses on using logical steps to come to the best solution possible. This often involves analyzing multiple solutions at once to choose the one that offers the best quality outcome.
Teams typically use the rational decision model when they have time for meetings and research, which allows them to create a list of potential solutions and discuss the pros and cons of each.
Features of Classical Model:
- Problems are clear.
- Objectives are clear.
- People agree on criteria and weights.
- All alternatives are known.
- All consequences can be anticipated.
- Decision makes are rational.
- They are not biased in recognizing problems.
- They are capable of processing ail relevant information
- They anticipate present and future consequences of decisions.
- They search for all alternatives that maximizes the desired results.
- Define your goal or obstacle: First, you must define the goal or obstacle you wish to achieve or overcome. Defining this helps you understand exactly what outcome your solution should produce.
- Determine the relevant information: For this step, consider delegating research tasks to your team or brainstorming during a team meeting. Determine what information about your goal or obstacle is relevant to finding a solution.
- Create a list of options: Using the relevant information, your team can create a list of potential options for solutions. Try to support your options with evidence for why they would solve achieve your goal or overcome your obstacle.
- Arrange options by their value: After creating a list of options, arrange them by their likelihood of success. Options that have a higher chance of success also have a higher value, while options with little evidence may have a lower value.
- Choose the best option: Consider the value of each option and how it can help your company succeed. With your team, come to a consensus about the best option for a solution using the information you’ve gathered.
- Finalize your decision and take action: Once your team decides on the best solution, clearly state your commitment to the solution and ask if any team members have concerns. After this, you can implement your solution in your company.
Intuitive decision model
Rather than logical reasoning, the intuitive decision model uses feelings and instinct to make decisions. Often, team leaders or managers use this model to make quick decisions when they don’t have a lot of time for research or planning.
The process of an intuitive decision is less structured and may use previous knowledge of similar goals or obstacles to determine a useful solution.
- Define your goal or obstacle: Even with little time, it’s important to define your goal or obstacle clearly, especially if you’re making a decision without your team. This can help you explain the decision and its effects later.
- Identify similar goals or obstacles: Brainstorm similar goals or obstacles you’ve encountered before and how you solved them. Use this information as a basis for creating your own solution.
- Recognize possible biases: Recognizing your biases is especially important when you don’t have input from your team. Consider how your decision may affect yourself, your team and your company as you think of potential solutions.
- Determine a usable solution: Determine the best solution using your prior experience and the values of your company. An ideal solution helps your company achieve its goals or overcome an obstacle while also benefitting your team and other employees.
- Finalize your decision and take action: After choosing a usable solution, you can alert your company and team of your decision. If you have to make the decision quickly, you may have to put it into action without discussing with your team.
Bounded Rationality Model or Administrative Man Model:
Decision-making involves the achievement of a goal. Rationality demands that the decision-maker should properly understand the alternative courses of action for reaching the goals.
He should also have full information and the ability to analyse properly various alternative courses of action in the light of goals sought. There should also be a desire to select the best solutions by selecting the alternative which will satisfy the goal achievement.
Herbert A. Simon defines rationality in terms of objective and intelligent action. It is characterised by behavioural nexus between ends and means. If appropriate means are chosen to reach desired ends the decision is rational.
Bounded Rationality model is based on the concept developed by Herbert Simon. This model does not assume individual rationality in the decision process.
Instead, it assumes that people, while they may seek the best solution, normally settle for much less, because the decisions they confront typically demand greater information, time, processing capabilities than they possess. They settle for “bounded rationality or limited rationality in decisions. This model is based on certain basic concepts.
- Sequential Attention to alternative solution:
Normally it is the tendency for people to examine possible solution one at a time instead of identifying all possible solutions and stop searching once an acceptable (though not necessarily the best) solution is found.
These are the assumptions that guide the search for alternatives into areas that have a high probability for yielding success.
Herbert Simon called this “satisficing” that is picking a course of action that is satisfactory or “good enough” under the circumstances. It is the tendency for decision makers to accept the first alternative that meets their minimally acceptable requirements rather than pushing them further for an alternative that produces the best results.
Satisficing is preferred for decisions of small significance when time is the major constraint or where most of the alternatives are essentially similar.
Thus, while the rational or classic model indicates how decisions should be made (i.e. it works as a prescriptive model), it falls somewhat short concerning how decisions are actually made (i.e. as a descriptive model).