What is Decision Making

Decision making is understood as process of evaluating and choosing, through reason and will, a certain option in the midst of a universe of possibilitieswith the purpose of resolving a specific situation, whether it is personal, vocational, family, social, labor, economic, institutional or business, among others.

To that extent, the decision-making process must be distinguished from routine day-to-day choices, such as preferences for the outfit of the day, the lunch menu, etc., which do not necessarily involve a process of rational scrutiny.

decision making involves the evaluation of a series of conditions and variables of a scenario, against which it is necessary to choose an intervention strategy by the subject involved, be it an individual or a group (companies, institutions, communities). Therefore, it is a very complex process.

See also Decision.

Decision-making stages

In a well-conducted decision-making process, the following phases should occur:

  1. Identification of the problem or dilemma to solve.
  2. Compilation of useful information related to said problem.
  3. Identification of priorities.
  4. Identification of possible alternatives.
  5. Evaluation of consequent scenarios before the possible alternatives.
  6. Decision.
  7. Evaluation of the results.

Types of decisions

At least two types of decisions can be distinguished: programmed or structured decisions and unprogrammed or unstructured decisions.

It is known as programmed decisions those that are routinely known beforehand to be taken. In other words, programmed decisions are those foreseen in time, given the characteristics of the problem.

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For example, certain institutional or business decisions that must be taken based on the set of regulations, rules and periods established for it.

Instead, the unscheduled decisions are those that must necessarily be taken when a conflict situation or dilemma arises unexpectedly or when its unusual characteristics require the design of a specific plan.

For example, the urgent definition of an action plan when an unexpected accident occurs or the orientation of personal life after suffering a major loss that totally modifies the foreseen scenario.

Decision making in the personal sphere

In the personal sphere, decision-making processes usually respond to two types of essential motivations, which must be identified for a good solution: heteronomous motivations and autonomous motivations.

It is understood by heteronomous motivations those that are induced by external subjects and usually involve a level of coercion or pressure, often under threat of sanction. Among these subjects we can mention the State, religions and strict social traditions.

It is understood by autonomous motivations those that arise from the universe of interests, values, convictions and aspirations of the subject who must make a decision, rationally evaluated, freely and responsibly.

Decision making in business

In the business environment, decision-making is a process that is part of the functions of a manager or a management team.

In this regard, different application models have been developed for decision making according to the scenarios to be faced. Some authors speak, for example, of a political model, a rational model and a model of limited rationality.

Decision making will attend to different levels of action depending on the hierarchy of team members or departments.

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Thus, the team at the strategic level will make decisions about the global orientation of the company; the team at the tactical level will make planning decisions for so-called “business subsystems” and the operational level will take care of day-to-day operations.