Decision Making Models Overview: Which One Fits Your Organization Best?

Posted on May 31, 2024 at 12:05 PM

Decision-makers are keen to use decision making models to help them choose what is best for their teams and the organization as a whole, ensuring transparent decision-making processes.

Decision making models are useful for leaders in an organization who have constraints related to limited time or available information.  They serve as a key tool that helps them streamline their decision-making processes.

In the following article, we explain the strategic decision making models.

What are the five decision making models?

The main strategic decision-making models are categorized into five types:     

1- Rational decision making model:

In this model, the decision maker arrives at the best possible solution using reasoning that entails analyzing several solutions.     

This approach provides visibility into whether the team has more time to conduct research and hold meetings, so you can generate a set of potential solutions within a structured framework.     

Of course, following this model requires several steps, including:

•  Determine the goal or issue:

The desired goal begins by defining the consequences involved in the solution so they can be understood.

•  Determine process standards:

 This requires collecting information, possessing analytical skills, and engaging in critical analysis to find the appropriate solution.    

•  Create a list of options:

Here, the team must develop and rank some alternative options, preferably supported by evidence, to achieve the goal or solve the complex problem and anticipate potential outcomes.

•   Select the best option:

The best option is chosen based on the proposed alternatives and the role of each of them in achieving success for the company.

2- Intuitive decision model

This model is considered one of the most prominent models of administrative decision making.  When used; decisions are based on feelings rather than logical thinking.     

Managers also benefit from the opportunity to enroll in management training courses in London to gain experience on how to use the intuitive decision model productively when time does not allow for research and planning.  Thus, they can make informed decisions quickly and effectively.  

This approach is used as follows: 

•   Identify potential biases:

When considering potential solutions;  the decision maker must assess how the decision will impact both the team and the company.  

• Identify a simple solution:

After collecting basic data, the best solution that facilitates solving the company's problems or achieving its objectives is determined.

•  Take action:

After choosing the solution; the company and executives will be notified of the decision, so that appropriate measures can be taken.

3- Recognition Primed Model

Management training courses provide business leaders with risk management skills that enable them to evaluate and analyze the fundamentals of a circumstance and create a solution relevant to the matter at hand.    

RPM is based on recognition-based decision theory (RPD).   This model includes three basic steps:

•   Identify the problem:

It means recognizing that there is a problem that needs to be solved, and this includes ethical problems in the work environment.    

•  Generating possible solutions:

The nature of problem solving involves referring to past situations and experiences, to serve as a consulting document for finding a workable solution.   

•  Choosing the best solution:

 That is, choosing the most appropriate solution from among the solutions proposed in Step 2.

4- Vroom-Yetton model

Designed by Viktor Fromm, this model aids people in deciding which approach to take in different conditions and whether they can address these factors individually or collectively!  

This model includes a decision tree with 7 questions, describing the decision-making process method that must be aligned with the 5 aspects described by this model.

1. Should the absolute best option be chosen (maximization), or can a good option that meets the minimum criteria (satisfactory) be accepted?    

2. Is team participation important for rational decision-making, for example?

3. Is there enough information available to consumers?

4. Are the alternatives clear?

5. Will deciding without the team’s opinion cause unexpected problems?

6.  Do all team members have the same goal?

7.  Is the final decision of your team adequately safeguarded?     

Additionally, credit management has strengthened the financial protection of companies. This is achieved by applying the Vroom-Yetton model, which allows leaders to make effective decisions based on specific criteria and a comprehensive analysis of the financial situation and potential risks.

5- Bounded rationality model

Although this model is ideal, it does not deny the existence of restrictions or obstacles that make the systematic decision-making process almost impossible, such as uncertainty about the proposed solution.

This model is suitable for making decisions that would not have significant consequences for quality if the resulting solution did not work.   

The most important feature of this model is that teams can benefit from it by making quick decisions that do not take much time.

 In conclusion, 

Assuming a leadership role requires the leader to understand the various decision making models and when each model can be implemented.     

In general, each decision-making model describes a series of steps through which individuals confidently make decisions that impact the organization only positively.