Decision Making: Definition, Skills & Quotes

Decision-making is important because it is something we all do every day. Our decisions can influence the course of our lives, so it is essential that we understand how the decision-making process works and how we can choose the course of action that best fits our needs and values.

There are many theories of decision-making. These theories are all rooted in the principles and algorithms we can use to identify values, consider risks, and work with uncertainties to arrive at an optimal choice (Ahmed & Omotunde, 2012). Some examples of decision-making theories include the Rational Decision-Making Model, Bounded Rationality Theory, Prospect Theory, and Dual-Process Theory. Let’s take a close look at each of these theories.​

Rational Decision-Making Model

The rational decision-making model assumes that decision-makers seek to arrive at optimal decisions for their goals and values through reason and critical thinking. In this model, individuals rely on facts, analysis, and a step-by-step procedure to come to a decision (Uzonwanne, 2016).

Bounded Rationality

The bounded rationality theory says that we are limited in our ability to process and analyze information. Because of factors like cognitive limitations and time constraints, we have to rely on heuristics (mental shortcuts) and satisficing (selecting a solution that is satisfactory rather than optimal) instead of exhaustive analysis (Simon, 1990).

Prospect Theory

Prospect theory posits that decision-making is influenced by psychological biases and the way options are framed. It suggests that we are more risk-averse when faced with gains and more risk-seeking when faced with losses (Edwards, 1996).

Dual-Process Theory

The dual-process theory says that decision-making involves two cognitive systems: the intuitive, automatic system (System 1) and the deliberate, analytical system (System 2). System 1 relies on heuristics and intuition, while System 2 involves conscious reasoning and analysis (Gawronski & Creighton 2013).​

Decision-making skills are the abilities that help you make effective and informed decisions (Lee, 2007). A few key decision-making skills include:
​

• Critical thinking – The ability to objectively analyze and evaluate information, arguments, and assumptions.
• Problem-solving – The ability to break down complex issues, generate alternative solutions, evaluate their feasibility, and select the best course of action.
• Risk Assessment – Decision-making involves considering and managing risks. Skilled decision-makers can identify potential risks, assess their likelihood and impact, and develop strategies to mitigate or respond to them.
• Emotional Intelligence – The ability to recognize and manage your emotions and understand how emotion may influence your judgments and choices. 
• Creativity and Innovation – These skills allow you to explore alternative perspectives, challenge assumptions, and consider innovative approaches to decision making.
• Communication and Collaboration – The abilities to communicate and collaborate include listening to diverse perspectives, seeking input, and working with others to gather insights and make informed choices.

There isn’t just one way to make a decision and we commonly find a method we prefer over others. This method is our decision-making style. Below are 5 decision-making styles that have been characterized scientifically (Scott & Bruce, 1995).

Rational Style

Rational decision-makers carefully gather and analyze information before making choices. They assess alternatives objectively, weigh pros and cons, and make logical decisions based on facts and evidence.

Intuitive Style

Intuitive decision-makers rely on their instincts, feelings, and past experiences to make quick judgments. They may not follow a systematic analysis but instead, trust their gut feelings and often have a good sense of what is the right course of action.

Dependent

Dependent decision-makers have a hard time making decisions on their own. They have the tendency to seek advice and guidance from others before deciding on anything.

Avoidant

Avoidant decision-makers simply try not to make decisions whenever possible. They may wait until someone else makes a decision for them or remove themselves from the situation altogether.

Spontaneous

Spontaneous decision-makers feel a sense of urgency and are motivated to go through the decision-making process as quickly as possible.

There are several decision-making strategies and techniques that individuals and organizations can employ to enhance their decision-making process. Here are some commonly used strategies:
​
Cost-Benefit Analysis

This strategy involves comparing the costs and benefits associated with different alternatives. It helps quantify and weigh the pros and cons of each option to make an informed decision (Ahmed & Omotunde, 2012).

Optimizing

Optimizing refers to choosing the best option among all of the identified alternatives (Ahmed & Omotunde, 2012). This strategy works best when alternatives are limited as choosing among more options often leads to a suboptimal decision.

SWOT Analysis

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This technique involves identifying and analyzing these factors related to a decision. It helps in understanding the internal and external factors influencing the decision and can provide insights into potential risks and advantages (Leigh, 2009).

Six Thinking Hats

This strategy involves wearing different “hats” that represent different thinking perspectives. Each hat represents a different approach, such as facts, emotions, creativity, critical thinking, etc. This technique encourages diverse thinking and helps us explore a decision from multiple angles (Aithal & Kumar, 2017).

Scenario Planning

Scenario planning involves envisioning and analyzing different potential future scenarios and their implications. It helps us consider a range of possibilities and develop strategies that are robust and adaptable to various situations (Amer et al., 2013).

Devil’s Advocate

The Devil’s Advocate strategy involves challenging and critiquing proposed decisions. This approach helps identify potential flaws, biases, or blind spots in the decision-making process and encourages thorough analysis and consideration of alternative viewpoints (MacDougall & Baum, 1997).

The decision-making process is the series of steps that you follow to arrive at a choice or solution. While different models and frameworks exist, the general decision-making process typically involves the following steps (Lunenburg, 2010):

Identify the Problem

The first step is to clearly identify the decision that needs to be made. This involves understanding the problem, opportunity, or goal that requires a decision. It is considered to be one of the most important steps.

Generate Alternatives

After the problem has been identified, the next step is to generate your alternatives or identify your options. Specifying your goals in this step will help you narrow down the number of alternatives you have to choose from.

Evaluate Alternatives

​The pros and cons, risks and benefits, and potential outcomes associated with each alternative identified in the previous step should then be carefully evaluated. There are 3 questions you can ask yourself that will help with this step. These include 

1. Is this feasible?
2. Is it a satisfactory alternative? 
3. What impact might this choice have on others?

Make a Choice

Once you have evaluated all of your options, it is time to make a choice. It will help if you select from options that satisfied all of the three evaluative questions from step 3.

Implement the Decision

After making the decision, develop an action plan for implementation. Define the necessary steps, allocate resources, and set timelines. It will also be beneficial to consider any potential barriers or challenges you might face and develop strategies to overcome them.

Evaluate the Decision Effectiveness

The last step in the decision-making process is to consider how effectively the decision you made produced the desired results. If you find that the decision did not pan out as you expected, it might help to consider the possible causes including an inaccurate definition of the problem, an insufficient evaluation of the alternatives, and/or poor implementation of the decision. This is a good opportunity to learn from your mistakes so that you can make better decisions in the future.

Decision-making in management is a fundamental aspect of organizational leadership and involves making choices to guide the direction, operations, and success of a business or organization. These decisions can have far-reaching consequences and must be made very carefully. Managers at different levels engage in decision-making to address various challenges, capitalize on opportunities, allocate resources, and achieve organizational goals. These decisions can have far-reaching consequences and must be made very carefully. Here are a few types of decision-making that you might employ in management positions:

Strategic Decision-Making – Strategic decision-making involves identifying the interaction of decisions and the way those decisions will impact an organization. They tend to shape the overall direction and long-term goals of an organization. These decisions require analyzing the external environment, assessing internal capabilities, and considering future trends and risks (Schwenk, 1995).

Operational Decision-Making – Operational decisions involve day-to-day activities and routines that aim to optimize efficiency and productivity (Biard, et al., 2015). These decisions may include staffing, scheduling, inventory management, quality control, and customer service.
​
Risk Management – Decision-making in management involves assessing and managing risks associated with various business activities. Managers analyze potential risks, evaluate their potential impact, and develop strategies to mitigate or respond to them. This includes decisions related to risk assessment, risk avoidance, risk reduction, risk transfer (e.g., insurance), and crisis management (Xia & Chen, 2011).

• “Sometimes you make the right decision, sometimes you make the decision right.” – Phil McGraw
• “You may not control all the events that happen to you, but you can decide not to be reduced by them.” – Maya Angelou
• “Every decision you make reflects your evaluation of who you are.” – Marianne Williamson
• “Decision making is easy when your values are clear.” – Roy Disney
• “Life is about choices. Some we regret, some we’re proud of. Some will haunt us forever. The message: we are what we chose to be.” – Graham Brown
• “We may think that our decisions are guided purely by logic and rationality, but our emotions always play a role in our good decision making process.” – Salma Stockdale
• “Truly successful decision-making relies on a balance between deliberate and instinctive thinking.” – Malcolm Gladwell
• “When making a decision of minor importance, I have always found it advantageous to consider all the pros and cons.” – Sigmund Freud
• “Nothing is more difficult, and therefore more precious, than to be able to decide.” – Napoleon Bonaparte
• “You and I need to be the decision makers in our own lives and careers. It is also our responsibility to allow and encourage others to do the same.” – Jay Rifenbary
• “The quality of your life is built on the quality of your decisions.” – Wesam Fawzi
• “Decision is a risk rooted in the courage of being free.” – Paul Tillich
• “You are only one decision from a totally different life.” – Wilfred A. Peterson
• “Decision making is power. Most people don’t have the guts to make ‘tough decision’ because they want to make the ‘right decision’ and so they make ‘no decision’. Remember, live is short, so do things that matter the most and have the courage to make ‘tough decision’ and to chase your dreams.” –  Yama Mubtakeraker

• Ahmed, M. T., & Omotunde, H. (2012). Theories and strategies of good decision making. International journal of scientific & technology research, 1(10), 51-54.
• Aithal, P. S., & Kumar, P. M. (2017). Ideal analysis for decision making in critical situations through six thinking hats method. International Journal of Applied Engineering and Management Letters (IJAEML), 1(2), 1-9.
• Amer, M., Daim, T. U., & Jetter, A. (2013). A review of scenario planning. Futures, 46, 23-40.
• Biard, T., Le Mauff, A., Bigand, M., & Bourey, J. P. (2015). Separation of decision modeling from business process modeling using new “Decision Model and Notation”(DMN) for automating operational decision-making. In Risks and Resilience of Collaborative Networks: 16th IFIP WG 5.5 Working Conference on Virtual Enterprises, PRO-VE 2015, Albi, France,, October 5-7, 2015, Proceedings 16 (pp. 489-496). Springer International Publishing.
• Edwards, K. D. (1996). Prospect theory: A literature review. International review of financial analysis, 5(1), 19-38.
• Gawronski, B., & Creighton, L. A. (2013). Dual process theories.
• Lee, Y. C. (2007). Developing decision-making skills for socio-scientific issues. Journal of Biological Education, 41(4), 170-177.
• Leigh, D. (2009). SWOT analysis. Handbook of Improving Performance in the Workplace: Volumes 1‐3, 115-140.
• MacDougall, C., & Baum, F. (1997). The devil’s advocate: A strategy to avoid groupthink and stimulate discussion in focus groups. Qualitative health research, 7(4), 532-541.
• Schwenk, C. R. (1995). Strategic decision making. Journal of management, 21(3), 471-493.
• Scott, S. G., & Bruce, R. A. (1995). Decision-making style: The development and assessment of a new measure. Educational and psychological measurement, 55(5), 818-831.
• Simon, H. A. (1990). Bounded rationality. Utility and probability, 15-18.
• Uzonwanne, F. C. (2016). Rational model of decision making. Global encyclopedia of public administration, public policy, and governance. Springer International. https:/doi. org/10.1007/978-3-319-31816-5_2474-1.
• Xia, D., & Chen, B. (2011). A comprehensive decision-making model for risk management of supply chain. Expert Systems with Applications, 38(5), 4957-4966.