Decision Making Models

Decision making models are all about making good judgements. There are judgements that are
emotional, spur of the moment, horseback or back of envelope - a quick decision. There are also the
rational informed kind. The rational informed kind are the ones that most of us want to make. Even if
that kind of decision takes longer. That is especially true when it comes to business decision making
where dollars are on the line. You probably know that the majority of businesses fail. The biggest
reason for that failure is making bad decisions. The tools here can help you make good decisions.

It's not hard to define what a decision is. It is the process of concluding what decision needs to be
made and finding feasible alternatives. It is then the act of choosing one out of all of those possible
alternatives. When you chose an alternative, you make a commitment. You have rejected all of the
other alternatives. You have decided

Applying The
Decision Making Model In Five Steps
1. State The Problem - The first and arguably the most important step in the decision making model
in five steps is to identifying the problem. Until you have a clear understanding of the problem or
decision to be made, it is meaningless to proceed. If the problem is stated incorrectly or unclearly
then your decisions will be wrong.

2. Identify Alternatives - Sometimes your only alternatives are to do it or don't do it. Most of the
time you will have several feasible alternatives. It is worth doing research to ensure you have as
many good alternatives as possible.

3. Evaluate The Alternatives - This is where the analysis begins. You must have some logical
approach to rank the alternatives. Two such logical approaches are discussed at Example Of A
Decision Matrix and at Sample SWOT Analysis. It is important to realize that these analysis methods
are only one of the five steps in the decision making model.

4. Make A Decision - You have evaluated your alternatives. Two or more of your high ranked
alternatives may be very close in the evaluations. You should eliminate all of the alternatives that
were low ranked. Now it is time to go back and examine the inputs you made to evaluation criteria
for the close high ranked alternatives. Do you still feel comfortable with the inputs you made? When
you have made any changes it is time for some subjection. You have eliminated the alternatives that
do not make logical sense. Now it is time to let your subconscious work. Review all the details of the
remaining high ranked close alternatives, so they are completely clear in your mind. Completely
leave the project alone for a few days. When you return to the project, the decision will likely be very
clear in your head. This only works if you have done your homework!

5. Implement Your Decision - A decision has no value unless you implement it. If you are not good
with implementation, then find someone that is. Part of the implementation phase is the follow up.
The follow up ensures that the implementation sticks.
 Various Types of Decision-making Models
Pure rationality model is the most rational decision-making model, but an unrealistic one because it assumes
decision-makers have unlimited time, all necessary resources, and complete knowledge when making
decisions. It assumes politics-administration dichotomy in which the former identifies goals for the latter to
achieve (Gianakis, 2004). The disjointed incrementalism model developed by C.E. Lindblom is a less rational
model because it assumes partisan mutual adjustment or "muddling through" and the comparison of several
immediately available alternatives (Lindblom, 1959)will produce satisfactory results. The bounded rationality
model is less rational than the pure rationality model but more rational than the incremental model. It is
defined by Simon as “the achievement of given goals subject to subjective constraints” (Simon, 1982).

1. Evans, E. (2004) Thatcher and Thatcherism, New York : Routledge

2. Gianakis, G.A. (2004) Decision Making and Managerial Capacity in the Public Sector, In: Holzer, M., Lee,
Public Productivity Handbook, New York, Marvel Dekker Inc, P.43

3. Gortner, H. F. (2001) Values and ethics. In: Cooper, T.L., ed. Handbook of Administrative Ethics. New
York: Marvel Dekker.

4. Lindblom, C. E. (1959) The science of muddling through. Public Admin. Rev. 19(1):79-88

5. Lindblom, C.E. (1965) The intelligence of democracy: Decision making through partisan mutual
adjustment. New York: Free Press

6. March, J. G., Olsen, J. P. (1987). Organizational learning and the ambiguity of the past. In: March J. G.,
Olsen, J. P., eds. Ambiguity and Choice in Organizations. 2nd ed. Bergen, Norway: Universitatsforlaget

7. Selten, R. (2002) Bounded Rationality, Cambridge Mass.: MIT Press

8. Simon, H.A. (1976) Administrative Behaviour: A Study of Decision-Making Processes in Administrative

9. Simon, H.A., (1982) Models of Bounded Rationality Volume 2 Behavioural Economics and Business
Organization, London, The MIT Press

10. Simon, H.A. (1997) Administrative Behaviour, New York: The Free Press

11. Weber, Max (1947) The Theory of Social and Economic Organization, Talcott Parsons, ed., New York:
Oxford University Press

What is decision making??

Decision making can be regarded as the mental processes (cognitive process) resulting in the
selection of a course of action among several alternatives. Every decision making process
produces a final choice.[1] The output can be an action or an opinion of choice.

Decision-Making Steps
When in an organization and faced with a difficult decision, there are several steps one can take to ensure the
best possible solutions will be decided. These steps are put into seven effective ways to go about this decision
making process (McMahon 2007).

The first step- Outline your goal and outcome. This will enable decision makers to see exactly what they are
trying to accomplish and keep them on a specific path.

The second step- Gather data. This will help decision makers have actual evidence to help them come up with
a solution.

The third step-Brainstorm to develop alternatives. Coming up with more than one solution ables you to see
which one can actually work.

The fourth step-List pros and cons of each alternative. With the list of pros and cons, you can eliminate the
solutions that have more cons then pros, making your decision easier.

The fifth step - Make the decision. Once you analyze each solution, you should pick the one that has many
pros, and the one that everyone agrees with.

The sixth step-Immediately take action. Once the decision is picked, you should implement it right away.
The seventh step - Learn from, and reflect on the decision making. This step allows you to see what you did
right and wrong when coming up, and putting the decision to use.

Seven step decision making model

The seven step model was designed for choosing careers and may be classed as
a rational decision making model. The seven steps are designed to firstly identify
the frame of the decision. Based on the information available, alternatives are
generated. Further information is then gathered about these alternatives in order to
choose the best one.

The 7 steps

 Identify the decision to be made - exactly what are you trying to decide?
 Know yourself - what are your strengths, weaknesses, skills, values and
interests
 Identify options - list the various choices so far
 Gather information and data - about each alternative
 Evaluate options that will solve the problem, pros, cons and risks of
each alternative
 Select the best option- may be necessary to loop back and gather more
info
 Develop a plan of action - and implement it!