Whether you’ve reached the top or are in a junior role, no matter your employment level, strong decision-making skills are essential. This is especially true in companies with flatter organisational structures, where everyone is encouraged to play their part when it comes to reaching resolutions.
If you’ve struggled to weigh up your options in the past, how can you improve your approach? Luckily, there are several decision-making models that can boost your managerial skill set.
Though not 100% fool-proof, applying models to different situations can help you be more assured in your decisiveness. In this guide, we'll take a look at a selection of decision-making models that business leaders can use to optimise their opinions and judgements.
The rational decision-making model
If you need to make a complex, risky decision that requires a large degree of thought, research and collaboration, the rational decision-making model could be a sound option.
Considered to be the classic approach, it's one of the most commonly used methods of decision-making. The model consists of the following six simple steps:
Because it uses scientifically obtained data to reach informed decisions, the model reduces the chance of errors, distortions and assumptions which can lead to bad decisions. Thus, for the risk-averse, it's a safe option.
What’s more, due to its step-by-step methodology, it provides the necessary information for leaders to deal with difficult and emotionally charged problems.
If crunch time is approaching, this model isn't the best approach. You need to set aside time to observe, collect and analyse information; it may be limited in fast-paced environments.
What’s more, because it’s reliant on information, insufficient data/evidence means you can’t always use it. Similarly, because it errs on the safe side, leaders may limit their decision-making to what is available to them, instead of taking risks.
The intuitive decision-making model
If you tend to go with your gut, you’re already following the intuitive decision-making model. Your brain is carrying out pattern recognition in the blink of an eye, reviewing previous experiences to inform the current situation.
With this model, it's less about ideas popping into your head. Instead, it's recognising the cause and effect of a situation and understanding how information can affect our judgment.
Intuitive decisions are quick and let leaders see the bigger picture. It requires decision-makers to combine data, facts and figures to create a cohesive idea of what they need to do.
And since it takes emotions into account, the model ensures that positive feelings are used advantageously – guiding the decision-maker through the process with a degree of motivation.
Negative emotions can affect intuitive decisions just as much as positive ones. These experiences may cloud judgment, leading to rash, impulsive decisions.
Likewise, because experience plays a large part in the intuition process, it's a difficult model to use in unfamiliar situations, where you can't draw on past experiences to guide you.
The recognition-primed decision-making model
The recognition-primed model functions as a combination of the rational and intuitive approaches. It works like this:
The recognition-primed model works best when you can draw on experience or expertise, making it useful in time-critical situations.
Likewise, since the experience you’re applying to these situations has played out in your head using rational and intuitive reasoning, it's a good way to avoid problems.
However, it’s not without its drawbacks, which we'll touch on below…
If you’re short on time, you may be tempted by the first course of action, which could lead to a poor decision. Similarly, the model's trial-and-error approach means it's not always geared towards time-sensitive situations.
What’s more, inexperienced managers may opt for this model when either a rational or intuitive approach may suffice.
The Vroom-Yetton Decision-Making Model
Of course, there's no one-size-fits-all approach to decision-making. Every situation is different, and some models will produce more effective outcomes. That's the central idea of the Vroom-Yetton decision-making model.
The model consists of answering seven yes-or-no questions, such as "do I have sufficient information to make a high-quality decision?" or "is conflict among subordinates likely to arise in the event of a preferred solution?", for instance.
The answers will guide you to one of five decision-making processes:
Autocratic (A1): Make the decision using the information you have, and no further inputfrom the team.
Autocratic (A2): Make the decision using the information you have, as well as feedback fromthe team.
Consultative (C1): Inform the team of the situation, collate the feedback, and then make thedecision.
Consultative (C2): Gather the team for a consultation, but you still make the final decisionby yourself.
Collaborative (G2): Reach a group consensus and make the decision collaboratively.
Like what you're reading? Sign up below to receive our best content each month...
The model's main strength is its flexibility. Anyone can put it to good use, even in unfamiliar situations.
Despite its usefulness, the model doesn't factor in the individual needs of the decision-maker, and it may not be precise enough to work in certain situations.
Gazprom Energy is a leading supplier of energy for small businesses, offering competitive gas and electricity contracts that are simple to set up and manage. For more information, visit the homepage or call our team today on 0161 837 3395.
The views, opinions and positions expressed within this article are those of our third-party content providers alone and do not represent those of Gazprom Energy. The accuracy, completeness and validity of any statements made within this article are not guaranteed. Gazprom Energy accepts no liability for any errors, omissions or representations.
The Ultimate Guide to Business Forecasting
A guide to choosing the right energy tariff for your business
Does your business need a corporate sustainability programme?