MODELS OF STRATEGIC DECISION MAKING

Models of strategic decision making



Models of strategic decision making

I believe that a rational decision making model provides a structured and sequenced approach to decision making. Using such an approach can help to ensure discipline and consistency is built into your decision making process. As the word rational suggests, this approach brings logic and order to decision making. Our rational decision making model consists of a series of steps, beginning with problem/opportunity identification, and ending with actions to be taken on decisions made. According to Ohio State University management professor, Paul C. Nutt, we only get about 50% of our decisions in the workplace right! Half the time they are wrong, so there is clearly plenty of scope to improve on our decision making processes. (Chris Gore, Kate Murray and Bill Richardson, 1992, 65-77)

Based on his research into over 300 decisions, made in a range of organizations, he discovered that "some tactics with a good track record are commonly known, but uncommonly practiced." Too often, managers make bad tactical selections..... because they believe that following recommended decision-making practices would take too much time and demand excessive cash outlays." Nutt argues that using good decision making practices actually costs very little. Models such as our rational decision making model are essential tools to help you improve the way you make decisions. This article is part of our series on decison making. Our first article, types of decision making outlines a range of decision making approaches. Rational decision making forms part of what we have termed types of decision, categorized by process. In this category we have put two contrasting approaches that of rational decision makes and that of judgement or intuitive decision making. (Chris Gore, Kate Murray and Bill Richardson, 1992, 65-77)

A General Rational Decision Making Model

Rational decision making processes consist of a sequence of steps designed to rationally develop a desired solution. Typically these steps involve:

Identifying a problem or opportunityThe first step is to recognise a problem or to see opportunities that may be worthwhile. A rational decision making model is best employed where relatively complex decisions have to be made. The first decision making lesson should be to ask yourself if you really have a problem to solve or a decision to make. Then read this article for more specific advice: Problem Solving Skill: Finding the Right Problem to Solve. (Chris Gore, Kate Murray and Bill Richardson, 1992, 65-77)

Gathering informationwhat is relevant and what is not relevant to the decision? What do you need to know before you can make a decision, or that will help you make the right one? (Chris Gore, Kate Murray and Bill Richardson, 1992, 65-77)

Analyzing the situationWhat alternative courses of action may be available to you? What different interpretations of the data may be possible? Our Problem Solving Activity uses a set of structured questions to encourage both broad and deep analysis of your situation or problem.

Developing optionsGenerate several possible options. Be creative and ...