What Is Decision Making? Definition, Types and Tips
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Decision-making is an important skill that all employees need. Proper decision-making techniques can help guarantee you handle problems in the best manner possible and implement solutions with little risk. There are several possible methods you can use when making a decision. In this article, we discuss what is decision making, explain the four primary methods of doing so and list the proper steps on how to find a solution.
What is decision making in management?
Decision-making is a soft skill that involves choosing between possible solutions to a problem. It is a highly valued skill that many recruiters and hiring managers look for when seeking new talents. Typically, the person making a decision follows a step-by-step process, including collecting information, weighing pros and cons and reviewing alternative solutions.
How do people make decisions?
People often make decisions through either intuitive or reasoned processes:
Intuition is the ability to understand something immediately without the need for reasoning. Although it sounds like a vague concept, it is actually a combination of your experiences and personal values. In many cases, intuition is worth considering because it reflects the overall experience within your professional life. For example, if you encountered a problem very similar to your current one, use what you learned from that past experience to make better decisions in the current situation.
Reasoning is the ability to use presented facts to make decisions. Using reasoning negates your intuition and places less emphasis on your connection to similar decisions or situations. Reasoning is often the preferred method because it is focused more on facts rather than feelings. Some situations require a balance between the two to come to a solution.
What are the types of decision making?
If you want to understand what is decision making, it is important to know how people make decisions and the factors involved in determining the best method. There are four primary methods to choose from:
The command method involves making decisions without the help or inclusion of others. It is a major component of authoritative leadership, as it often provides the fastest solution with little or no input. Emergency situations requiring quick action are where the command method works best. Those who make these decisions are often in managerial or other leadership roles. These decisions come with high risk compared to other alternatives.
The consulting method involves gaining insight from others but only allowing a single individual to make the final decision. This option often takes more time than the command method because it involves input from others. This method is not ideal for emergency situations but provides the opportunity for more people to give their opinions. It also offers solutions that come with little or no risk. Additionally, this method ensures that others feel included and guarantees they are heard within the decision-making process.
The vote method occurs when a group discusses all options openly before the speaker calling for a vote. All those involved either vote for or against the decision in a democratic and fair process. Voting is best in group settings in which you must take all opinions into account or when each member represents a larger body of employees. Voting is also a finite solution, creating an effective decision-making process.
The consensus method is a group discussion in which all parties present alternatives and points of view until they reach an agreement. This is a time-consuming method because it requires many people with original ideas and motivations to come to an agreement. It often results in a long period of discussion time spanned across multiple meetings. Once they reach a decision, the chance of risk is significantly lower than all other methods. Make a sweeping statement that guarantees everyone understands that the decision is final.
How to make decisions
Here is the process for making decisions:
1. Identify the decision
Once you realise you must make a decision, define its nature and conditions. Find any variables that relate to the problem for consideration as well. It is important to understand if a decision is worth making. Not all situations require a tough decision, especially when other areas have a greater need for similar resources.
2. Collect information
Gather all the information you can regarding the situation and the decision. Determine what information you need and the best sources for it. Additionally, consider seeking out information both internally and externally for every situation. For example, you might gather some information internally through a self-assessment process by simply looking at what is in front of you. Find other information externally online, in books or from other sources.
3. Figure out alternatives
Think about all the possible solutions or choices to your decision. This is a step that you can perform continuously throughout your decision-making process. Try to come up with and carefully consider each option, even if at first you are tempted to dismiss it.
4. Evaluate your evidence
Use both your intuition and reason to assess your evidence. Analyse and predict what could be the outcomes of each option and which outcome would best fit the needs of the problem or question. Rank your options in terms of which would be the most effective fix or choice and see if a winning idea becomes clear.
5. Pick an option
Select what you have determined to be the most effective choice. Your ultimate solution may also be a combination of your various options, depending on the circumstances and the particular decision. Make sure that you have considered both the potential benefits and drawbacks of each option before making your final choice.
6. Take action
Implement your decision. Begin taking action to make your decision happen. This may involve notifying your team or company leaders, acquiring resources or making a budget. Continue evaluating your decision as you put it into action and make changes or optimisations as needed.
Tips for making decisions
Here is some advice for making effective decisions:
Allow yourself time
Give yourself time to make your decision. If you know that you have to make a decision by a specific deadline, start gathering evidence and thinking about your options well prior to the deadline rather than a day or two before. You might find it helpful to create a schedule with deadlines for each stage of the decision-making process.
Minimise your stress
Try to reduce your stress about your upcoming or current decision. It is okay if you have powerful emotions about your decision. However, you can likely make a better decision if you make your choice primarily based on your evidence, intuition and reasoning.
Create rules for yourself
Set rules for yourself about your decision-making process. Making rules for yourself ahead of time can help you approach your decision in a calm and logical way. For example, creating an itemised budget for an upcoming project may ensure that your eventual choice adheres to your financial requirements.
Be adaptable with your decision-making process. The best method for making decisions often varies depending on the circumstances. With each new decision, be open to the possibility of personalising your decision-making process based on the current situation.
Evaluate potential bias
Try to detect and minimise any biases you might have that affect your decision-making process. While it is natural to have biases, these biases can affect your decision-making method. Strive to analyse your decision, options and evidence from a more objective perspective.
Take breaks during your decision-making process. If you feel yourself getting frustrated with or exhausted from trying to decide, let yourself take a break, such as by going for a walk, focusing on a different task or even sleeping if possible. Giving your mind a rest from a challenging choice can help you see the pending decision with greater clarity when you return.
Talk to someone
Talk to someone else about your decision, evidence and various options. Explaining your thought process aloud may help you get a new perspective on your pending decision. You might also ask the other person if they can think of any other pieces of evidence or alternatives to your decision.
Think about your values
Consider your personal goals and values when making your decision. In some situations, the best decision may align with your beliefs, core values, ambitions or morals. This might be especially true if you are making a personal decision, such as if you should go to university or pursue a new career path.
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