BS 309 Module 2 Decision Making Model

Decision making
refers to making choices among alternative courses of action. Individuals

throughout organizations use the information they gather to make a wide range of decisions.
These decisions may affect the lives of others and change the course of an organization.
Therefore, increasing effectiveness in decision making is an important part of maximizing
your effectiveness at work.
Because many decisions involve an ethical component, one of the most important
considerations in management is whether the decisions you are making as an employee or
manager are ethical. Here are some basic questions you can ask yourself to assess the ethics
of a decision.
 Is this decision fair?

 Will I feel better or worse about myself after I make this decision?
 Does this decision break any organizational rules?
 Does this decision break any laws?
 How would I feel if this decision was broadcast on the news?
Types of Decisions
Not all decisions have major consequences or even require a lot of thought. For example,
before you come to class, you make simple and habitual decisions such as what to wear, what
to eat, and which route to take as you go to and from home and school. You probably do not
spend much time on these mundane decisions. These types of straightforward decisions are
termed programmed decisions; these are decisions that occur frequently enough that we
develop an automated response to them. The automated response we use to make these
decisions is called the decision rule. For example, many restaurants face customer complaints
as a routine part of doing business. Because this is a recurring problem for restaurants, it may
be regarded as a programmed decision. To deal with this problem, the restaurant might have a
policy stating that every time they receive a valid customer complaint, the customer should
receive a free dessert, which represents a decision rule.
However, decisions that are unique and important require conscious thinking, information
gathering, and careful consideration of alternatives. These are called nonprogrammed
decisions.
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Decision making can also be classified into three categories based on the level at which they
occur. Strategic decisions set the course of organization. Tactical decisions are decisions
about how things will get done. Finally, operational decisions are decisions that employees
make each day to run the organization. For example, remember the restaurant that routinely
offers a free dessert when a customer complaint is received. The owner of the restaurant
made a strategic decision to have great customer service. The manager of the restaurant
implemented the free dessert policy to handle customer complaints, which is a tactical
decision. And the servers at the restaurant are making individual decisions each day
evaluating whether each customer complaint received is legitimate to warrant a free dessert.
Making Rational Decisions
The rational decision-making model describes a series of steps that decision makers should

consider if their goal is to maximize the quality of their outcomes. In other words, if you want
to make sure you make the best choice, going through the formal steps of the rational
decision-making model may make sense.
Let’s imagine that your old, clunky car has broken down and you have enough money saved
for a substantial down payment on a new car. It is the first major purchase of your life, and
you want to make the right choice. The first step, therefore, has already been completed—we
know that you want to buy a new car. Next, in step 2, you’ll need to decide which factors are
important to you. How many passengers do you want to accommodate? How important is
fuel economy to you? Is safety a major concern? You only have a certain amount of money
saved, and you don’t want to take on too much debt, so price range is an important factor as
well. All of the potential options for purchasing your car will be evaluated against these
criteria. Before we can move too much further, you need to decide how important each factor
is to your decision in step 3. If each is equally important, then there is no need to weight
them, but if you know that price and gas mileage are key factors, you might weight them
heavily and keep the other criteria with medium importance. Step 4 requires you to generate
all alternatives about your options. Then, in step 5, you need to use this information to
evaluate each alternative against the criteria you have established. You choose the best
alternative (step 6) and you go out and buy your new car (step 7).
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Of course, the outcome of this decision will be related to the next decision made; that is
where the evaluation in step 8 comes in. For example, if you purchase a car but have nothing
but problems with it, you are unlikely to consider the same make and model in purchasing
another car the next time!
Making Intuitive Decisions
The intuitive decision-making model has emerged as an important decision-making model. It

refers to arriving at decisions without conscious reasoning. When we recognize that managers
often need to make decisions under challenging circumstances with time pressures,
constraints, a great deal of uncertainty, highly visible and high-stakes outcomes, and within
changing conditions, it makes sense that they would not have the time to formally work
through all the steps of the rational decision-making model. To an outside observer, it may
seem like they are making guesses as to the course of action to take, but it turns out that they
are systematically making decisions using a different model than was earlier suspected.
Research on life-or-death decisions made by fire chiefs, pilots, and nurses finds that these
experts do not choose among a list of well-thought-out alternatives. They don’t decide
between two or three options and choose the best one. Instead, they consider only one option
at a time. The intuitive decision-making model argues that, in each situation, experts making
decisions scan the environment for cues to recognize patterns (Breen, 2000; Klein, 2003;
Salas & Klein, 2001). Once a pattern is recognized, they can play a potential course of action
through to its outcome based on their prior experience. Due to training, experience, and
knowledge, these decision makers have an idea of how well a given solution may work. If
they run through the mental model and find that the solution will not work, they alter the
solution and retest it before setting it into action.
Making Creative Decisions
In addition to the rational decision making and intuitive decision making, creative decision
making is a vital part of being an effective decision maker. Creativity is the generation of
new, imaginative ideas. With the flattening of organizations and intense competition among
organizations, individuals and organizations are driven to be creative in decisions ranging
from cutting costs to creating new ways of doing business. Please note that, while creativity
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is the first step in the innovation process, creativity and innovation are not the same thing.
Innovation begins with creative ideas, but it also involves realistic planning and follow-
through.
The five steps to creative decision making are similar to the previous decision-making
models in some keyways. All the models include problem identification, which is the step in
which the need for problem solving becomes apparent. If you do not recognize that you have
a problem, it is impossible to solve it. Immersion is the step in which the decision maker
thinks about the problem consciously and gathers information. A key to success in creative
decision making is having or acquiring expertise in the area being studied.
Then, incubation occurs. During incubation, the individual sets the problem aside and does
not think about it for a while. Currently, the brain is working on the problem unconsciously.
Then comes illumination or the insight moment, when the solution to the problem becomes
apparent to the person, usually when it is least expected. This is the “eureka” moment like
what happened to the ancient Greek inventor Archimedes, who found a solution to the
problem he was working on while he was taking a bath. Finally, the verification and
application stage happen when the decision maker consciously verifies the feasibility of the
solution and implements the decision.

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BS 309 Module 2 Decision Making Model

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Decision making

refers to making choices among alternative courses of action. Individuals

 Is this decision fair?

Making Rational Decisions

The rational decision-making model describes a series of steps that decision makers should

Making Intuitive Decisions

The intuitive decision-making model has emerged as an important decision-making model. It

Making Creative Decisions

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