A Guide To Decision-Making Style (With Types And Examples)

By Indeed Editorial Team

Published 20 October 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Decision-making is important in directing resources towards business goals, establishing strategies and utilising business opportunities. There are various styles for making business decisions. Understanding these styles can help you gain a deeper understanding of different business needs and the varied outcomes associated with each. In this article, we define decision-making styles, provide four types and examples for each, share ways to determine your style, explore how to make business decisions and review the importance of decision-making styles.

What Is A Decision-Making Style?

An individual's decision-making style is their default way of handling situations and finding solutions to business problems in a professional and strategic manner. This helps leaders hire competent employees, undertake complex projects, handle time-sensitive situations, increase profitability and resolve conflicts in a better way. A person's style of decision-making is similar to their personality type.

Related: What Is Decision Making? Definition, Types And Tips

4 Types Of Decision-Making Styles

Below are different styles of decision-making leaders can choose from:

1. Directive

This style involves making quick, clear and short-term decisions based on work experience. Managers who practise this style of decision-making avoid complex or ambiguous problems and consider the pros and cons of a situation. People can easily follow the direction of directive decision-makers. Autocratic leaders prefer this style, which works well during high-pressure situations when there is not enough time for consensus and collaboration with others. The style may not work when handling unfamiliar or new challenges, where there is a need for advice and input from team members. Here is an example of this style of decision-making:

The head chef and senior server of a popular restaurant call in sick during a busy day. The sous chef finds themselves overburdened with tasks in their absence and a lack of staff. They decide to use the directive way of decision-making and immediately delegate tasks to the culinary chefs, which includes two interns. Before speaking with the kitchen members, the chef decides on the additional responsibilities and communicates the plan to handle the guests.

Related: What Is Autocratic Leadership

2. Analytical

Analytical decision-makers assess the data, insights and facts before making decisions. They also gather relevant information and fact-check them to improve their decisions. Analytical decision-making works well when working with creative solutions, situations that require multiple perspectives and challenges that require strategising for long-term goals. This style may not work during time-sensitive situations, stressful times or when requiring additional input from other stakeholders. Here is an example:

A manager plans to call their employees to the office after a year of remote working. They send out a survey that lists different options and preferences of their employees. The manager finds out that most of the employees prefer a hybrid work model. They introduce a team innovation day and weekly meet-ups and add new cuisines to the office canteen menu to encourage employees to come to the office. They also provide office supplies and conduct virtual team-building events to make working from home comfortable.

Related: How To Improve Analytical Skills (With Steps And Benefits)

3. Behavioural

A behavioural style considers the feelings and behaviour of those involved in the decision-making process. Behavioural decision-makers take a group-oriented approach and prioritise business relations. This style also highlights skills like emotional intelligence, social awareness and relationship management. Behavioural style is ideal for situations that require multiple outlooks and opinions or have a low possibility of disagreement and conflict. The style may not work for dynamically changing situations or when there is a high possibility of disapproval from stakeholders. Consider this example:

A manager wants to improve their new customer feedback system. They conduct focus groups, interview their customers, plan follow-up surveys and track customer behaviour throughout the sales cycle to gather feedback and develop trust. The result is an improvement in customer service and the introduction of new customer-centric products.

Related: Behavioural Learning Theory: Types, Benefits And Strategies

4. Conceptual

Conceptual decision-makers assess future outcomes and multiple perspectives while making decisions. They are open-minded and make long-term plans that benefit the organisation and its employees. Conceptual decision-making also involves recognising underlying problems and using holistic, creative and integrated approaches to resolving them. This style of decision-making works well during unpredictable situations or with creative tasks. It might not work in situations that require defined outcomes or are time-sensitive. Consider this example:

A project manager plans a major project that requires internal funding from the company. They plan it meticulously after consulting with multiple stakeholders and considering future expenses. They also plan project costs by creating a list of project categories, such as research expenses, human resources, material resources, capital expenditures and contingency reserves. The manager opts for a bottom-up estimation for the budget and makes a note of milestones, phases and tasks involved in the project to create the statement of work.

Related: What Are Conceptual Skills? Definition And Examples

Ways To Determine Your Style For Decision-Making

There are different frameworks when determining a style for decision-making. One of them is ambiguity vs structure. If you prefer proven strategies and well-defined plans or opt for practical and short-term goals, you may consider the structured way of decision-making. If you prefer having multiple options and perspectives, are comfortable with uncertainty or are a creative individual, you may consider the ambiguous way of decision-making.

Another framework is technical vs social. If you prefer being task-oriented, prioritise data and facts or are naturally disagreeable, you may consider the technical way of decision-making. If you prioritise the opinion of stakeholders and employees, you may consider the social way of decision-making. It is important to understand that these styles may change and you may require adapting to different styles when making decisions. You can consider multiple perspectives and ask for constructive feedback to help make better decisions.

Related: Traits Of A Powerful Personality And How To Build Them

How To Make Business Decisions

It is important for organisations to cultivate a culture of accountability through transparent decision-making. Follow these steps if you want to improve your decision-making:

1. Identify the problem

The first step to decision-making is identifying problems by evaluating the present state and differentiating it from the goal state. Start by listing the decisions that you require making, along with their order of importance. Management can classify the decisions into various categories, like discuss and decide, delegate, modify and approve. This can help utilise valuable resources and determine the potential outcomes of your decisions.

Related: The 8D Problem-Solving Method: What It Is And How To Use It

2. Use relevant data

Start gathering data after identifying key decisions and formulating potential solutions. Establish the facts pertaining to your goals by conducting extensive research for immediate and long-term results. Take a quantitative approach, which can further enhance your decision-making capabilities.

Related: 10 Valuable Data Analysis Skills

3. Take expert advice

You can leverage the support of other professionals and subject experts before making decisions. This can include human resources, attorneys and senior managers to help understand different viewpoints. Taking the advice of others can also encourage brainstorming and creative thinking. You can also increase customer influence and responsiveness by involving customer-facing employees in decision-making authority.

Related: Management Consultant Skills: Examples And How To Improve

4. Set deadlines

Decide on a deadline for each decision you make. This allows you to allocate the right amount of time for each task. Setting deadlines can help you improve your time-management skills and accomplish short-term goals.

Related: 12 Simple Ways To Save Time And Accomplish More Daily

5. Implement the decision

Implement the decision after informing the stakeholders involved in the operation about the changes. You can evaluate the results to get insights into your decision-making, the appropriateness of the choices and the implementation process. This information can help you improve your future decisions when a similar situation arises and learn from any mistakes.

Importance Of These Styles

Here are some reasons having a style for decision-making is important:

  • It helps enhance your self-confidence. Understanding your style can help you make informed business decisions and increase self-confidence in the process. This creates a positive work environment and helps you gain the trust of employees and stakeholders.

  • It can help assess your weaknesses. You can learn from your mistakes, identify aspects you overlooked and change your style of decision-making based on the outcomes. You can adjust or modify your style to suit different circumstances.

  • It can help to collaborate better. After identifying your style, you can work towards promoting a positive team culture and letting others share their opinions and feedback. This helps avoid indecision and resolves conflicts.

Explore more articles