The act of decision-makingis one of the most important cognitive processes which results in the selection of the course of action among various set of alternatives (Pettigrew, 2014). The decision making process is concerned with the selection of a final choice out of various alternatives. This process is considered as the process of identification as well as choosing of the various alternatives, which is based on the preferences, values and the various degrees of values to the decision-maker(Pettigrew, 2014).
The decision making is one of the most important processes of solving various degrees of problems. The decision making process can be rational, irrational, which is based on the tacit knowledge or the explicit knowledge or beliefs(Pettigrew, 2014). I believe in the fact that the environment of the decision-maker should be responsible for making suitable decisions. I know that there are usually two kinds of decision making including group decision-making activity and self decision making.
In the professional environment, I have seen that decision making is one of the most important job responsibilities of the managers. The decisions are considered important since they determine the organizational as well as individual activity in the organization. In this report, the usefulness of the decision making tools would be evaluated and reflection would be done on the individual decision making styles. The respective levels of intuition and rationality in the decision making activity would be explored in detail.
Discussion-Concept of decision making
As opined by Vohs et al. (2014), the decision making is considered as the process of selection of a particular course of action from multiple alternatives so that one solution is selected, which would solve the particular problem in maximum accurate manner. The decision making is aimed at solving pre-determined business objectives that would help in the business excellence. I wish to discuss about the organizational context of decision-making in detail. The decision making in the organization is dependent on deriving the right kind of information which would help the managers to make appropriate decision-making (Zsambok, 2014). I work as the senior manager of the firm, which makes me to take several important decisions in a typical business day. I was about to take important decisions regarding the areas where I need to expand my business.
I collected all relevant data from the marketing person on the profitability of various sectors and then made the final decision regarding the selection of the particular business area. The ability of making appropriate decisions is considered as an important managerial trait of the successful leaders(Vohs et al., 2014). The success of the decision makers lies in the acceptance or the rejection of the people that the decision has direct impact upon.
Cognitive process of decision-making
The cognitive style of the decision-making is the undersyanding of the human behavior through the process of selecting a particular course of action(Vohs et al., 2014). The decision theories encompass many such areas such as management,computer science, sociology, political science, statistics and others. The cognitive decision making uses real time process algebra (RTPA), where the decision making process is aided (Zadeh, Fu& Tanaka, 2014). The real world decisions are understood by repetitive applications of the fundamental cognitive processes.
I have learnt that the cognitive decision making process is usually applied to vaious kinds of decision-based systems like software agent systems, cognitive informatics, expert systems and others. I have understood the fact that the decision making involves scientific applications of the mathematical principles, which are helpful in arriving at logical conclusions.
Types of decision-making
The rational decision-making model is considered as the type of decision-making in which the individuals or the business entities uses facts, analysis and a step-by-step guide to arrive at a certain decision (Cornish & Clarke, 2014). They are precise, analytical, which is based on the available facts and information(Cascetta et al., 2015). I was responsible for increasing the number of customers coming to our restaurant. I was confused regarding the exact things I need to do for engaging in the process of increasing the financial returns of the company.The following are the majorsteps that were taken by me during that step-
- Definition of the problem- I understood that the fact that the company is aiming to increase the business revenues.
- Identification of the decision criteria- I understood the fact that the organization is trying to increase their revenues by increasing the number of footholds in the restaurants.
- Allocation of weights to various criteria- I felt that this criteria would be more instrumental in achieving the business objectives of achieving higher business returns.
-Development of the alternatives- I developed a set of alternatives for increasing the footfall in my restaurant. I aimed at providing early bird offers, giving special discounts and other promotional offers to the customers. The other options include termination of some employees, selecting new food supplier and reducing the store hours.
- Evaluation of the various alternatives- I decided the options that would help me to increase the operational efficiency as well as reduce the operational costs of the firm. I did not want to fire the employees as they have their families to support them. On the other hand, the promotional offers would have only positive effect and no negative effect on all the concerned stakeholders.
-Selection of the best possible alternative- I decided to choose the promotional offers to the store for increasing the financial prospects of the organization and increasing the revenue generation of the firm.
On the other hand, the intuitive decision-making is concerned with the sixth-sense decision-making tool in which people rely more on the gut instincts. The concept of intuition can be defined as the ability to grasp a particular situation or information instantly, where there is no such need of conscious reasoning (Schoenfeld, 2014). Thebusiness systems also use this kind of decision-making when there is not adequate information available for decision-making activity. The excellent managers are able to switch easily between the intuition decision making and the rational decision-making style(Cornish & Clarke, 2014).
I have witnessed the fact that the managers who engage in intuitive behavior have positive moods and they are receptive to the environmental clues. Intuition can also be defined as the non-sequential processing mode of the information (Larichev & Moshkovich, 2013). This process of decision-making relies on the cognition or emotion and there has been sufficient inter-connection between the two.
The heuristics play an important role in the intuitive decision-making process of the individuals. The intuitivejudgments are the informal as well as unstructured way of reasoning which is devoid of any unstructured reasoning (Larichev & Moshkovich, 2013). I have often engaged in such kinds of decision-making where I am not so sure about the concerned subjects. There are three probable parameters of heuristics such as adjustments, availability and representativeness (Vanharanta, Chakrabarti & Wong, 2014).
These factors influence the intuitive decision making under uncertain conditions. The heuristics based process approach views the various patterns of the biased judgmentsso that the heuristics can be differentiated from the normative reasoning process. The management kind of intuition is often based on the past experiences, skills, experiences, perceptions and the various feelings. Intuitive decision-making is often described as the unconscious expertise which is often used in situation based conditions in the management(Cornish & Clarke, 2014).
Research shows that there is a link between cognition and emotion in high-risk environment (Scott, 2017). The individuals who identify themselves as intuitive decision-makers are able to make faster decisions and they deviate a lot from the risk neutrality. I have witnessed the fact that when I am in a tensed situation, then I believe in my intuition rather than ration decision making. I have seen that the individuals who are intuitive decision-makers are not likely to participate in the dangerous events as compared to the deliberate decision makers.
Models of decision-making
There are various kinds of decision-making models that are used by the individuals as well as the organizations. They are discussed in detail-
- Bounded Rationality Model- This decision making model is used to achieve a particular goal. The rationality factor demands that the decision-making authority should understand the different alternate course of action for achieving the goals (Cascetta et al., 2015). I think that the person concerned in such decision-making activities would have to analyze the different alternatives in a proper manner so that the individual goals or the organizational goals are accomplished.
There should be the selection of the best option which would foster the achievement of the goals(Cornish & Clarke, 2014). I believe that rationality is considered with the intelligent action and the terms of objective. It is often featured by the desire to select the best possible action. This model excludes the individual rationality in the decision-making process (Dunn, 2015). It assumes the fact that the people would seek the best solutions so that the decisions of confronting are concerned with the greater demand, processing capabilities and the information time.
- Sequential attention- It is usually the tendency of the people to examine every possible action one at a time instead of the identification of all the possible solutions for the particular problem (Brarda, Yeres & Bowman, 2017). I am aware of the fact that one should stop searching at once an acceptable solution is found. The tendency of the decision-makers to accept the first alternative that is good enough or satisfactory, which would hold true under any circumstance, is known as satisficing(Kovach & Ulku, 2017).
The decision-makers tend to accept the first possible alternative which would fulfill the minimally acceptable requirements, instead of pushing them further for getting an alternative for getting the best results (Cascetta et al., 2015). The process of satisficing is true in cases where there needs decision of small significance and when time is considered as the major constraint.
- Retrospective decision-making model- The decision-making emphasizes on how the decision-makers attempt to rationalize the various choices and give proper justification of their decision (Gershman, Markman &Otto, 2014).
The prospect theory is concerned wih anticipating with the people’s reaction to the risk and the uncertainity of the external environment (Cascetta et al., 2015). This is one of the behavioural economics model, which is being deceloped by experts. This theory utilizes the sophisticated mathematics to describe as well as explain how people would decide between various alternatives. It gives insights on how the people react to either loss or gain situations. This theory is based on the fact that the persons bases their decisions on the potential losses or gains and they do not consider final outcome. The evaluation of the options is being done by heuristics. The model is descriptive in nature as it aims to capture the real-life choices apart from the optimal decisions.
The decision-making tools are helpful in making the useful decisions needed in life and in the organizations. I have learnt about different tools as well as techniqies that are helpful in making wise decisions. I want to discuss about the diffent decision making tools in detail-
- T-Chart- This type of tool ensures that all the positives as well as negatives of the situation is being assessed before arriving at a decision(Aslam et al., 2014). I take this approach when I have to decide the selection of the suppliers andin regular day to day decisions of my organization.
- Decision Matrix- Thedecision matrix is consideredto evaluate all the options before arriving at a decision (Kou, Ergu & Shang, 2014). I sometimes use this method by creating a matrix by creating a table with all the possible options in the first column and factors affecting the decision in the first row itself. The users are then asked to score each option as well as weigh which are the factors that have more importance. The final score is helpful in understanding the best possible option in the given situation.
- Pareto Analysis- This technique is mostly used when there is a need of making large amount of decisions in a short span of time (Hart, 2015). I find this technique helful when I need to make crucial decisions. For example, once I needed to decide opon whetherI should book a cab for my supervior or I need to draft an urgent mail. I priortised the tasks and found that I needed to book a cab first for my supervisor, who has a flight to catch. This method helped me to arrive at the decision easily. It helped me priortise the various decisions by understanding which decision would make the greatest impact.
- Cost-benefit approach- The decision making techniques are used for understanding the various financial implications of the possible alternatives so that a final decision can be reached (Cascetta et al., 2015). The best decision would be reached which makes the maximum benefit from an economic point of view (Nas, 2016). I have always selected the most cost-effective options from all the alteratives I had. This has made me to select options are cheap and that are effective in the long run too.
- Decision-tree- This graph or the model is used to involve the each option of the decision-maker and the probable outcomes of each decision (Anderson et al., 2015). I have learnt the fact that this technique uses the statistical analysis tool for making suitable decisions.
-Conjoint analysis- This method of decision-making is used to make the business leaders determine the consumer preferences during marketing campaigns (Gustafsson, Herrmann & Huber, 2013). I have seen that this kind of decision-making is useful when the company strives to launch any marketing campaigns.
I have realized the fact that decision making is one of the most important decisions of the individuals as well as the business entities. I have also witnessed that there are increasing number of artificial decision-makers which have replaced the cognitive decision making ability of the human beings. There are mainly two types of decision making process as explained here.
The rational decision are precise, analytical, which is based on the available facts and information. On the other hand, the intututuve decision-making is based on the gut feelings of the indivdiuals, which lead them to take specific decisions. I have learnt about different tools as well as techniqies that are helpful in making wise decisions. A number of decision making tools are being discussed here, which enhances the quality of the decisions made. The human brain is tuned to make decisions everytime and we use this in our day to day lives.
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