Decision process models

Decision process consist identify and define the essence of the decision situation, identification of alternative possibilities, the choice of the best of them and putting it into effect.

Models

There are two basic models: classic and managerial decision-making process.

Classic model

It is based on the belief in the possibility of optimizing the decision. It is believed that rational and systematic actions helps to find relevant solutions to the problems. Managers should try to get full information about the situation and create proper conditions to eliminate uncertainty.

In this model, managers should:

• gain complete and accurate information
• eliminate uncertainty,
• assess everything rationally and logically,
• make optimal decision

Classic decision-making model involves several basic steps of actions carried out in the correct order. The conditions assumed in the classic model, are in fact rare. In the activities of the managers there are mistakes, and information are usually incomplete. Managers do not always behave rationally and logically.

Managerial model

It is also known as behavioural or administrative model. It assumes that decision makers are characterized by limited rationality. This is the tendency to strive not only to optimize decision, but rather to gain satisfaction. This means that managers are limited by their values, skills, and unconscious reflexes. There are also limited by incomplete information and knowledge. You can say that although they are seeking for rationality, their rationality has distinct limits. On the other hand, it can be noted that taking decisions tend to self gratification, to choose the first option that meets a minimum standard of the expected sufficiency.

In this model, managers:

• use an incomplete and imperfect information
• are restricted in their rationality,
• tend settle for a first acceptable solution,
• take a decision which could serve the interest of the organization or not.

Examples of Decision process models

1. Rational Model: This model is based on the idea that the decision-maker is rational and has the ability to analyze the situation, identify all available options, evaluate those options against a set of criteria, and make the decision that yields the best outcome. This model is often used in business settings.
   • For example, a business manager may use the rational model when deciding which supplier to use for a particular project. The manager will identify all possible suppliers and evaluate them against criteria such as cost, quality, reliability, and past performance. The manager will then make a decision based on the supplier that is deemed to be the best overall choice.
2. Intuitive Model: This model is based on instinct and experience rather than rational analysis. The decision-maker relies on their intuition and gut feeling to make decisions without analyzing all available options. This model is commonly used in emergency situations when time is of the essence and a decision needs to be made quickly.
   • For example, a firefighter may use the intuitive model when responding to an emergency situation. The firefighter must make quick decisions in order to save lives and property, so they rely on their experience and intuition to make the best decision in the moment.
3. Satisficing Model: This model is a combination of the rational and intuitive models. The decision-maker seeks to find an option that is "good enough" rather than the optimal choice. This model is often used when there is a limited amount of time or resources available.
   • For example, a project manager may use the satisficing model when deciding which tasks to prioritize. The manager may identify all possible tasks and evaluate them against criteria such as cost, benefit, and difficulty. The manager then selects the tasks that are "good enough" to meet the project’s objectives, even if they are not the optimal choices.

Advantages of Decision process models

Decision process models offer a comprehensive approach to making decisions and help organize a logical, systematic path to finding the best solution. Some of the advantages of decision process models include:

• Increased clarity and transparency in decision-making. Decision process models provide a clear framework for understanding the various elements involved in making a decision, allowing stakeholders to see the logic behind the decision-making process.
• Improved accountability. Decision process models create a clear record of the decision-making process and the rationale behind each decision. This can help to reduce the potential for bias or conflicts of interest in decision-making.
• Enhanced efficiency. By providing a structured process for making decisions, decision process models help to eliminate unnecessary steps and reduce the time taken to make decisions.
• Improved decision outcomes. By following a structured decision-making process, decision-makers are more likely to identify the best possible solution to a given problem. This can help to ensure that decisions are based on sound reasoning and maximize the potential for positive outcomes.

Limitations of Decision process models

The limitations of decision process models include:

• The lack of consideration for emotional, environmental, and cultural factors when making decisions. This can lead to decisions that are not in line with the values of the organization or the needs of its stakeholders.
• They may not take into account all of the potential risks associated with a decision, which can lead to costly mistakes.
• They may not be able to account for unknown or unpredictable factors that may have an impact on a decision.
• They are limited in their ability to provide accurate predictions about future outcomes.
• The models can be overly complex, making them difficult to implement in practice.
• The models may be too rigid and unable to adjust to changing circumstances.
• They may rely too heavily on assumptions about the environment in which the decision is being made.

Other approaches related to Decision process models

The other approaches related to decision process models are:

• Analytic Hierarchy Process (AHP): This is a model used to make decisions based on multiple criteria. It helps to compare and prioritize different options to determine the best course of action.
• Multi-Criteria Decision Analysis (MCDA): This is a model which uses quantitative and qualitative criteria to assess different alternatives. It helps to identify the most suitable option based on the criteria defined.
• Delphi Technique: This is a model which involves obtaining the opinions of experts on a particular decision. It helps to identify the best course of action based on the feedback of experts in the field.
• System Dynamics Modeling: This is a model which uses a system of equations and feedback loops to model the behavior of a system. It helps to identify the impact of different decision alternatives on the system.

In summary, there are many approaches related to decision process models, such as Analytic Hierarchy Process, Multi-Criteria Decision Analysis, Delphi Technique, and System Dynamics Modeling. Each of these models can be used to help make better decisions based on the specific criteria needed for a particular decision situation.

Decision process models — recommended articles

Decision making — Conditions of decision-making — Impact of information on decision-making — Rating process — Rational decision making — Selection process in conditions of certainty and uncertainty — Behavioral aspects of decision-making — Analysis of preferences — Operational decision

References

• Ramser, P. (1993). Review of Decision Making in Action: Models and Methods. American Psychological Association.