Understand Careers -Decision Making

Introduction

Did you know that a normal, rational person is believed to make about 35,000 decisions or choices daily? When we speak of human behaviour, it is vital that we look at decision-making theories, as our behaviour is based on the decisions and choices we make. Because our choices and decisions influence human behaviour, any theory or research related to decision-making is always viewed with interest, especially by any field focused on understanding human behaviour.

What is decision-making theory?

The theory of decision-making looks at how rational, logical individuals should behave when faced with uncertainties and risk. This theory uses a set of principles based on how people should behave. These principles have been challenged over the years.

Decision-making involves the phases of:

- Recognising there is a challenge that needs to be solved through making a decision.

- Searching for information on possible solutions to solve the challenge.

- Choosing the person (who will assist) or method most suitable for the decision.

In the decision-making process, decision theory combines the fields of mathematics, philosophy, statistics and psychology. There are three main areas. Each area looks at decision-making in different ways.

1. Descriptive Decision Theory. This theory looks at how people who are considered irrational make decisions. This theory is more focused on what will happen versus what should happen. Descriptive theory also considers external factors that might play a role in a person making an irrational decision.

2. Prescriptive Decision Theory. This theory looks at how a person, with an uncertain decision-making framework, can make the best possible decision. It is believed that the prescriptive model is a model that should be used by those individuals who are real decision-makers, as this model understands their specific situations and needs. Prescriptive models are unique, as they are built on the foundation of normative theory combined with descriptive theory observations.

3. Normative Decision Theory. This theory is based on a set of values and attempts to guide decision-making. In this theory, a person is assumed to be rational. The normative decision theory forms the most fitting solution to a given situation and will always attempt to find the best outcome. The belief with this theory is that a person who possesses a full rational capacity has the ability to arrive at the best outcome or solution with no hesitation. The idea of the normative theory is perfect in theory; unfortunately, this theory's idea cannot be found in the real world. For this reason, the normative theory is better suited to the creation of software and methodologies.

All choices can be categorised into the following five basic models, namely:

1. Rational Decision-Making Model. This is a decision-making model focused on making choices for difficult situations, involving other people, with strong emotions and different opinions. Such choices also require serious thought and research. If you need to make a decision that falls along these lines, it might be worth considering the rational decision-making model. This model uses six steps:

1. Defining the problem.

2. Determining the measures you will use to assess solutions.

3. Determining the importance of each standard.

4. Coming up with possible solutions.

5. Assessing the alternatives.

6. Looking for the best possible solution.

The rational model is interesting because it counters many uncertain factors, such as faulty assumptions leading to poor decisions and choices. The rational model seeks to reduce uncertainty and risk in decision-making, and can be used as part of a team or on your own. The rational model is an excellent tool; however, it is not the best model for individuals who have to make decisions quickly or in a rapidly changing situation.

Another constraint of this model is that it is not always possible to have all the necessary information for this model, nor will it always be necessary to go through the whole process to make certain choices.

2. The Bounded Rationality Decision-Making Model. This model is also called the model of "satisficing". This model differs from the rational model in that it seeks to make decisions that are "good enough" as opposed to being "the best possible decision".

The bounded rationality model is useful when faced with time constraints, or when you do not have enough information to use the rational model. In times of emergency, it is safer to have a decision that is passable or "good enough" than the best possible decision that will take days to arrive at. Using this model also requires fewer resources. In a nutshell, this model can be viewed as a shortcut that the brain uses to quickly arrive at decisions.

3. The Vroom-Yetton Decision-Making Model. There is no perfect, set way to make decisions and choices. However, when needed, the most appropriate model or process will alter to fit your situation. That is the thought behind the Vroom-Yetton decision-making model. This model is also known as the Vroom-Yetton-Jago model. This model is made up of seven "yes/no" questions in the first part. An example of these questions is:

Is commitment to the choice or decision important?

Based on your answers, you will be led to one of five decision-making processes. The choices available range from making decisions based on what you know, without input from your team, to making decisions with your team members' full agreement.

The Vroom-Yetton model is a model of great flexibility, and this flexibility is one of the model's main strengths. Another advantage of this model is that it can be used at all levels and can also be used in situations that are unfamiliar. However, the drawbacks of using this model are that the model may not be suited to bigger groups, the questions asked may not be specific enough to guide the decision-maker to a decision, and the model does not take into account any personal aspects of the decision-maker.

4. Intuitive Decision-Making Model. Did you know that you are still using a decision-making model when you make a decision instinctively or intuitively? Even though we can make decisions in an instant, there is a lot more to the process than we realise.

We do not just come up with our choices and decisions. What is actually happening when we need to make a decision is the human brain performing pattern recognition at an incredibly fast speed. This means that when faced with a situation in the present, our brain quickly reviews similar situations from the past to help us make a decision in the present.

Research into the intuitive decision-making model found that it is best used when dealing with an area or situation where you have previous experience. However, using this model for a new or unfamiliar situation may not be as effective, because in an unfamiliar situation, one lacks the experience to recognise past patterns.

It is interesting to note that at times we may think a decision is logical and rational, but it turns out to be more intuitive. Has there ever been an instance in which you had to make a decision, thought of a hundred alternative options and solutions, only to go back to your initial choice anyway? If you have experienced this at any point in your life, chances are you may have been using the retrospective decision-making model without even realising it.

5. Recognition-Primed Decision-Making Model. There are many similarities between the recognition-primed model and the intuitive model. Let us look at how the recognition-primed model works:

- From the information available, the decision-maker is able to recognise a pattern.

- The decision-maker then decides which course of action to take and goes through the similar event in their mind. This similar event can be referred to as the "action script".

- If the chosen script seems to be a match to the situation, the decision-maker can move ahead; however, if the script does not match the current situation, the decision-maker can either tweak the script to fit or discard it completely and look for a new script (a pattern or memory of a similar event).

The recognition-primed model is similar to the intuitive model, as it also works best in situations where the decision-maker already has experience or knowledge of a similar situation. This model has also proven to be extremely useful in situations where decisions had to be made in a limited timeframe.

Conclusion

As we have seen from the above information, there are many decision-making models that can be used. People make several decisions in a day. Some decisions require an on-the-spot answer, whereas other decisions can be decided after a few days. Here, the different models come into play without us even realising it. When we have to make rushed decisions, we may end up using the intuitive model or the recognition-primed model. For decisions that require more time, we may use the rational decision-making model or the bounded rationality decision-making model. Either way, the decision-making process is intriguing, as our actions are based on the very decisions we make, and how we behave as humans is tied to those decisions. Understanding these models will go a long way in explaining why people behave or react the way they do.