Decision Making

In psychology, decision-making is regarded as the cognitive process resulting in the selection of a belief or a course of action among several alternative possibilities. Every decision-making process produces a final choice that may or may not prompt action.


The thought process of selecting a logical choice from the available options.
When trying to make a good decision, a person must weight the positives and negatives of each option, and consider all the alternatives. For effective decision making, a person must be able to forecast the outcome of each option as well, and based on all these items, determine which option is the best for that particular situation.

People often find it hard to make decisions - inevitably we all have to make decisions all the time, some are more important than others.  
Some people put off making decisions by endlessly searching for more information or getting other people to offer their recommendations.  Others resort to decision making by taking a vote, sticking a pin in a list or tossing a coin.
Regardless of the effort that is put into making a decision, it has to be accepted that some decisions will not be the best possible choice.  This page examines one technique that can be used for effective decision making and that should help you to make effective decisions now and in the future. 
Although the following technique is designed for an organisational or group structure, it can be easily adapted to an individual level.
What is Decision Making?
In its simplest sense: 'Decision Making is the act of choosing between two or more courses of action'.  However, it must always be remembered that there may not always be a 'correct' decision among the available choices. 
There may have been a better choice that had not been considered, or the right information may not have been available at the time.  Because of this, it is important to keep a record of all important decisions and the reasons why these decisions were made, so that improvements can be made in the future.  This also provides justification for any decision taken when something goes wrong.
Hindsight might not be able to correct past mistakes, but it will aid improved decision making in the future.

Effective Decision Making


Although decisions can be made using either intuition or reasoning, a combination of both approaches is often used.  Whatever approach is used, it is usually helpful to structure decision making in order to:
·         Reduce more complicated decisions down to simpler steps.
·         See how any decisions are arrived at.
·         Plan decision making to meet deadlines.


Stages of Decision Making
Many different techniques of decision making have been developed, ranging from simple rules of thumb, to extremely complex procedures.  The method used depends on the nature of the decision to be made and how complex it is.
The method described here follows seven stages:
1.    Listing all possible solutions/options.
2.    Setting a time scale and deciding who is responsible for the decision.
3.    Information gathering.
4.    Weighing up the risks involved.
5.    Deciding on values, or in other words what is important.
6.    Weighing up the pros and cons of each course of action.
7.    Making the decision.


1. Listing Possible Solutions/Options
In order to come up with a list of all the possible solutions and/or options available it is usually appropriate to work on a group (or individual) problem-solving process. This process, could include brainstorming or some other 'idea generating' process (see our page: Problem Solving for more information). 
This stage is important to the overall decision making processes as a decision will be made from a selection of fixed choices.  Always remember to consider the possibility of not making a decision or doing nothing and be aware that both options are actually potential solutions in themselves.


2. Setting a Time Scale and Deciding Who is Responsible for the Decision
In deciding how much time to make available for the decision making process, it helps to consider the following:
·         How much time is available to spend on this decision?
·         Is there a deadline for making a decision and what are the consequences of missing this deadline?
·         Is there an advantage in making a quick decision?
·         How important is it to make a decision?  How important is it that the decision is right?
·         Will spending more time improve the quality of the decision?
Also see our page: Time Management.
Responsibility For The Decision
Before making a decision, it needs to be clear who is going to take responsibility for the decision.  Remember that it is not always those making the decision who have to assume responsibility for it.  Is it an individual, a group or an organisation?  This is a key question because the degree to which responsibility for a decision is shared can greatly influence how much risk people are willing to take.
If the decision making is for work then it is helpful to consider the structure of the organisation that you are in.  Is the individual responsible for the decisions he or she makes or does the organisation hold ultimate responsibility?  Who has to carry out the course of action decided?  Who will it affect if something goes wrong?  Are you willing to take responsibility for a mistake?
Finally, you need to know who can actually make the decision?  When helping a friend, colleague or client to reach a decision, in most circumstances the final decision and responsibility will be taken by them.  Whenever possible, and if it is not obvious, it is better to make a formal decision as to who is responsible for a decision.  This idea of responsibility also highlights the need to keep a record of how any decision was made, what information it was based on and who was involved.  Enough information needs to be kept to justify that decision in the future so that, if something does go wrong, it is possible to show that your decision was reasonable in the circumstance and given the knowledge you held at the time.

3. Information Gathering
Before starting on the process of making a decision, all relevant information needs to be gathered. 
If there is inadequate or out-dated information then it is more likely that a wrong decision might be made.  Also, if there is a lot of irrelevant information then the decision will be difficult to make, it will be easier to become distracted by unnecessary factors. 
There is a need for up-to-date, accurate information on which to make decisions.  Such information needs to be gathered so that a well-informed decision can be made.  The amount of time spent on information gathering has to be weighed against how much you are willing to risk making the wrong decision.  In a group situation, such as at work, it may be appropriate for different people to research different aspects of the information required. For example different people might be allocated to concentrate their research on costs, facilities, availability, and so on.
You may find the pages in our Study Skills section useful during the information gathering stage of decision making. Our pages: Effective Reading and Note-Taking may be of particular relevance.


4. Weighing up the Risks Involved
One key question is how much risk should be taken in making the decision? Generally, the amount of risk an individual is willing to take depends on:
·         The seriousness of the consequences of taking the wrong decision.
·         The benefits of making the right decision.
·         Not only how bad the worst outcome might be, but also how likely that outcome is to happen.
It is also useful to consider what the risk of the worst possible outcome occurring might be, and to decide if the risk is acceptable.  The choice can be between going 'all out for success' or taking a safe decision.


5. Deciding on Values
Everybody has their own unique set of values - what they believe to be important.
Many people decide to buy a car for themselves but different people buy different cars based on their own personal values.  One person might feel that price is the most important feature, whereas another person might be more concerned with its speed and performance.  Others might value safety, luggage space or the cars impact on the environment or a combination of these features.
Depending on which values are considered important, different opinions may seem more or less attractive.  If the responsibility for a decision is shared it is possible that one person might not have the same values as the others.  In such cases, it is important to obtain a consensus as to which values are to be given the most weight.  It is important that the values on which a decision is made are understood because they will have a strong influence on the final choice.
People do not make decisions based on just one of their values.  They will consider all their values which are relevant to the decision and prioritise them in order of importance. If you were to buy a car, what would be the five most important factors to you?


6. Weighing up the Pros and Cons
It is possible to evaluate the pros and cons of each possible solution/option by considering the possible advantages and disadvantages. 
One aid to evaluating any solution/option is to use a 'balance sheet', weighing up the pros and cons (benefits and costs) associated with that solution. For example, a small business that regularly hires vehicles from an external company might consider buying a vehicle for their exclusive use.
Using the question: "Should we buy a vehicle?" - the business could list the pros and cons of the purchase in the following way:
Pros
Cons
Saving on hire charges
Cost of purchase
Would make it easier to organise staff travel
Potential driver(s) could require training
Will always be available
Insurance and maintenance costs

However, it may be useful to rate each of the pros and cons on a simple 1 to 10 scale (with 10 high - most important to 1 low - least important):
Having listed the pros and cons, it may be possible to immediately decide whether the option of buying a vehicle is viable.


Pros
Cons
Saving on hire charges
9
Cost of purchase
6
Would make it easier to organize staff travel
7
Potential drivers could require training
4
Will always be available
6
Insurance and maintenance costs
8
Total
22
Total
18


In this case the cons (disadvantages) have the lower score while the pros (benefits) are higher and purchase of a car is therefore a strong possible choice.

In scoring each of the pros and cons it helps to take into account how important each item on the list is in meeting values.  For example, if the most important value was the potential saving, then the fact that a particular car has high insurance and maintenance costs will increase its score on the con side. 
This balance sheet approach allows both the information to be taken into account as well as the values, and presents them in a clear and straight forward manner.


7. Making the Decision
There are many techniques that can be used to help in reaching a decision.  The pros and cons method (as above) is just one way of evaluating each of the possible solutions/options available.
There are other techniques which allow for more direct comparisons between possible solutions.  These are more complicated and generally involve a certain amount of calculation.  These can be particularly helpful when it is necessary to weigh up a number of conflicting values and options.
For example, how would you decide between a cheap to buy but expensive to run car and another more expensive car, that is more economical to keep on the road?
Intuitive Judgements:  In addition to making reasoned decisions using the techniques shown above, in many cases people use an intuitive approach to decision making.  When making a decision many influences, which have not been considered, may play a part.  For example, prejudice or wishful thinking might affect judgement.  Reliance is often placed on past experience without consideration of past mistakes.  Making a decision using intuition alone should be an option and not done merely because it is the easy way out, or other methods are more difficult.
Intuition is a perfectly acceptable means of making a decision, although it is generally more appropriate when the decision is of a simple nature or needs to be made quickly.  More complicated decisions tend to require a more formal, structured approach.  It is important to be wary of impulsive reactions to a situation and remember to keep a record of the decision for future reference, no matter whether the decision was made intuitively or after taking a reasoned approach.
If possible, it is best to allow time to reflect on a decision once it has been reached.  It is preferable to sleep on it before announcing it to others.  Once a decision is made public, it is very difficult to change.


Summary
Decision making is the act of choosing between a number of alternatives.  In the wider process of problem solving, decision making involves choosing between possible solutions to a problem.  Decisions can be made through either an intuitive or reasoned process, or a combination of the two.  There are usually a number of stages to any structured decision making.




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