The Process and Impact of Decision Making

Decision Making

Decision making is the process of selecting a course of action. It can be rational or irrational and involves both explicit and tacit knowledge.

Problems in decision making include false beliefs, illusory associations and selective information processing. Decision makers can also make errors in estimating probability, giving information that is readily available too much weight and over-analyzing missed opportunities.

Definition

In decision making, a person arrives at a conclusion by combining knowledge and experience. Often there is a need for deliberation or consultation before a decision is reached. The decision may be about an individual or organizational matter. It could be about something as simple as choosing a flavor of ice cream or as complex as the structure of an organization.

It can be rational or irrational, based on explicit or tacit knowledge and beliefs. In a decision-making model, it is possible to calculate expected values from all alternatives and choose the one with the highest value. It is also possible to choose the least expensive alternative.

It is important that the decision-making process be transparent and free from conflict, especially if it involves public officials or other people with a high degree of responsibility. The problem of analysis paralysis, where someone is unable to make a decision because they go over the information again and again, can lead to poor decisions.

Purpose

The process of deciding a course of action, especially when the results will impact others. It may be a process based on rational or irrational reasoning, explicit or tacit knowledge and beliefs.

Examples of decision making include:

Civic decision: Taking a position on a public issue, e.g., government policy.

Closing the gap: Evaluating alternatives to find one that maximizes value.

Rational decision behavior: Advancing one’s own interests, based on analysis and all knowledge and judgments, constrained by global coherence.

Decision-making bias: Sources of error in acquiring and using information as people grapple with tough decisions. Examples of decision-making bias include:

Methods

Decision making is a cognitive process yielding a choice or course of action. It can be either rational or irrational and is based on beliefs, values and preferences of the decision maker. It can also be influenced by the presence of explicit or tacit knowledge.

Analytical techniques of different degrees of formality are used to help with the decision making process. These include a decision frame that focuses the problem and decision alternatives, a representation heuristic to promote learning by considering hypothetical decisions, a method to determine a person’s underlying preferences or judgments, and a decision analysis technique used to explore information relationships.

Another decision making technique is to use a multicriteria approach to speed up the process in short fuse situations. This involves evaluating many alternatives by aspects based on the criteria norms, eliminating those that fail to meet the requirements. This helps to avoid the problem of analysis paralysis where a decision-maker fails to decide because they keep going over the same information.

Results

Decision making produces results that can be either deterministic or probabilistic. Those results are based on analysis of key factors in the decision and the assumptions that decision makers make about future conditions, alternatives and criteria. The assumption about future conditions are often subjected to sensitivity analyses.

The outcomes of decision making include qualitative information that describes sentiments expressed in the form of questions such as a morale survey or questionnaire and quantitative information that expresses measures of the key factors such as costs or ratings of satisfaction. These information are disaggregated and are expressed as decision criteria weights, likelihoods or present equivalents.

The decisions that decision makers make result in actions taken by them and others. The choices are not always rational or irrational but are based on tacit and explicit knowledge and beliefs. Those decisions can produce bad consequences for the decision maker and their communities. They can also cause psychological distress for those involved in the process.

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