The different decision-making models you need to know — and their pros and cons

Big or small, decisions have the power to alter things at both a micro and a macro level. Here, we’ll explore some of the most prevalent decision-making models, including their pros and cons to see which could be the correct approach for your management style.


The mark of any good manager is being able to make the right decision at the right time, even in less-than-ideal circumstances. Regardless of sector and industry, it’s an important element of any management role, having the potential to impact employees as well as the direction a company might take going forward.

Big or small, decisions have the power to alter things at both a micro and a macro level. Whether it’s the snacks served at a meeting or a change in company culture, management has a lot to weigh up when it’s crunch time. There are a number of different decision-making models that managers can employ when needed

Here, we’ll explore some of the most prevalent decision-making models, including their pros and cons to see which could be the correct approach for your management style.

The Rational Model

 

Often cited as the classical approach, the rational model of decision-making is the most commonly used method, and typically consists of the following steps:

  • Identification of the problem or opportunity
  • Gathering and organising relevant information
  • Analysing the situation
  • Developing a range of options
  • Evaluating and assigning a value to each option
  • Selecting the option you feel is the best
  • Acting decisively on that option
Putting her all into project

Pros

The rational model allows for an objective approach that’s based on scientifically obtained data to reach informed decisions. This reduces the chances of errors, distortions and assumptions, as well as a manager’s emotions, that might have resulted in poor judgments in the past.

This means that, due to the step-by-step methodology, decision-makers are equipped to deal with difficult problems in complex environments.

Cons

The process is sometimes constrained by insufficient information, which creates problems if a manager has to consider, and then evaluate, any alternatives they need to reach a decision.

Time limitations can also be an issue. Since there’s a lot of information needed, the necessary time for observation, collection and analysis is also essential. In a fast-paced business environment where time is crucial, the rational model is somewhat limited.

It’s also an approach that tends to err on the side of caution. By limiting decision making based on what’s only available, you may not be able to take the risks necessary for success.

Who uses it?

Larger innovation companies in Sweden, such as Volvo and Ericsson, adhere to the rational model, using structured processes in order to manage their processes, often collaborating with a huge amount of people, all with differing expertise.

Man is pondering something in office

The Intuitive Model

 

Compared to the objective judgments of the rational model, the intuitive decision-making model is much less structured and opts for more subjective opinions – though it’s not simply based on gut feelings. Rather, it takes into consideration the following:

  • Pattern recognition – seeing patterns in events and information, and using them to figure out a course of action
  • Similarity recognition – seeing similarities in previous situations and recognising the cause and effect of a given situation.
  • Salience – understanding the importance of information and the way it can affect personal judgment.

Pros

Compared to the rational model, intuitive decision making allows for quick decisions to be reached, while a degree of gut feeling means managers can eliminate counter-intuitive ideas in reaching their decision.

Since it takes into account the person’s emotions, it ensures that positive feelings are used to their advantage, leveraging them as a way to motivate you through the process.

As opposed to the structure of the rational model, which progresses through steps, the intuitive model opts to see everything as a bigger picture. As a result, intuition can help managers to integrate pieces of isolated data, facts and figures in order to form a cohesive vision of what needs to be done.

Project manager meeting

Cons

The intuitive model leans heavily on a person’s experience and judgment. As a result, emotions and bad or insufficient experience may end up clouding judgment and make for poor, impulsive decisions.

Who uses it?

Intuition and its model of thinking can’t really be quantified in any measurable way. Nevertheless, the use of gut instinct has its fair share of proponents, none more so than perhaps Malcolm Gladwell, the author and public speaker who has written at length on the idea.

When we think of leaders who trusted their instincts, we think of people like Henry Ford of Bill Allen, the CEO of Boeing in the 1950s, who bet $16 million in order to achieve civilian air travel as we know it today. We can even see it in the present, with people like Uber CEO Travis Kalanick, a controversial figure who stuck to his guns despite heavy resistance to charging customers more for the service.

The Recognition Primed Model

 

A combination of the two above models, the primed model of decision making begins when a manager quickly assesses a situation, compares it to past situations, recognises patterns and creates a mental ‘action script’ which runs through the scenario up until its conclusion.

This then leads to two options:

  • The decision-maker finds no flaw in their scenario and sets about their chosen course of action as outlined by the script they devised.
  • The decision-maker encounters a problem in their action script. They then start over with a different script, repeating the process until a scenario successfully plays out.

An experienced decision-maker will have more developed recognition patterns, with more past scenarios to draw from to form their action script. Less experienced decision-makers, meanwhile, may look more towards troubleshooting the mental scenarios instead.

Woman is pensive

Pros

Since rational and intuitive reasoning is used, it provides a degree of mental simulation from your predictions. From here, you can prevent problems should they arise because they’ve been played out mentally beforehand.

Cons

Inexperienced managers may opt for this model when one of the other two models would be more appropriate in certain situations, such as for non-critical decisions.

The trial-and-error approach makes it relatively time-consuming. If time is of the essence, a manager may pick the first course of action, which may be unsatisfactory.

Who uses it?

As well as in business, the model is highly effective for leaders affiliated with firefighters, search and rescue units and other emergency services.

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