Different types of Decision-making Model

Hello Respected Researchers and HR managers, In this section we will discuss about “Different types of Decision-making Model“. It is very much important for a Researcher as well as HR Concern person/ manager to know Different types of Decision-making Model. If researcher or HR Manager could follow the Points accordingly,it would easier to reach the goal. Let’s have a look…


Types of Decision-making Model:

(1). Rational Decision-making:

In theory, we should always make decisions that are rational. There are a number of considerations and actions that facilitate rational decision-making, yet in reality not all of our decisions are purely rational. Before we discuss why this is, let’s first examine the rational decision-making model. This model argues that the decision maker will make optimal choices by adhering to a number of steps that help to ensure rationality. This model is designed with a view to facilitating value-maximizing choices. It entails a sequential progression through seven steps:

  1. Identify the problem.
  2.  Establish decision criteria, and allocate weights to the criteria.
  3. Search for relevant information.
  4. Develop alternative solutions to the problem.
  5. Evaluate alternative solutions.
  6. Choose the best solution.
  7. Implement and monitor chosen solution.


It is important to note that this model contains a number of assumptions:

  • The problem is clear and specific: The model assumes that problems are clear and unambiguous. It also assumes that the decision maker has complete information.
  • Known options: This assumes that the decision maker is able to identify the criteria and viable alternatives. In addition, it is assumed that the decision can understand the possible consequences of each alternative.
  • Clear preference: It is assumed that criteria and alternatives can be ranked and weighted to reflect their importance.
  • Stability: The model assumes that decision criteria are constant and that the weights given to the criteria are stable over time.
  • Minimal time and cost constraints: This assumption enables the decision maker to obtain full information about the criteria and alternatives.
  • Maximum payoff: It is assumed that the rational decision maker will choose the alternative that yields the highest perceived value.


Bounded Rationality:

Herbert Simon won a Nobel Prize for his theory of bounded rationality, which argues that people do make decisions with restricted information, and therefore the decisions tend to be less than ideal. Bounded rationality is based on four primary assumptions:

  1. Decision makers tend to ‘satisfice’: select the first alternative that is satisfactory.
  2. Often decision makers establish a problem statement or understanding of a problem without full or even adequate information.
  3. Decisions are often made without a comprehensive evaluation of alternatives.
  4. Decision makers rely on heuristics, or judgment shortcuts, to simplify the decision-making process.


Judgmental Heuristics


Heuristics are defined as the simplification of strategies, or using ‘rules of thumb’ to make decisions. A variety of heuristics exists:

  • Availability heuristic: The availability heuristic exists when we use experiences to shape our current and future decisions. If we have hired someone from a specific university before and had a good experience, we may continue to do so (rightly or wrongly) on the basis of that limited experience.
  • Representativeness heuristic: This is sort of like the halo effect – in that we base our understanding and confidence of a specific decision based on very limited information. If we read an article in a magazine that one university has a top-rated business school, we might make our selection from that university.
  • Anchoring and adjustment heuristic: This involves identifying a ‘yardstick’ of measurement, based again, on limited information. If we have always paid MBAs a specific starting salary, we may offer this amount again. This is not always appropriate for a number of reasons; perhaps one person has many more years work experience than another.
  • Confirmation trap: In this instance, we are specifically seeking the information and statistics that will confirm that we are making an appropriate decision. For example: we want to hire an MBA from a specific university, so we collect information that points to that decision as being the most logical and grounded. We might be ignoring other information that is available, simply because it does not support our decision.
  • Hindsight trap: This refers to the ‘I should have seen that coming’ syndrome. Perhaps you hired the MBA from the specific university and she does not work out; you suggest that it was really an obvious misfit, based on the qualifications of the job description, and the academic training that person had as a student.

Decision-making Models: Garbage Can Model of Decision-making

The Garbage Can Model has as its main components of the choice process four factors:

1. problems, 2. solutions, 3. participants, and  4. choice situations or opportunities.

  • These are all mixed up together in the garbage can of the organisation. In other words, the decision-making process is rather chaotic, partly because that might be the decision-making culture of the organisation, but also because a linear, rational approach to problem solving might not be a viable option. Often we can match specific solutions to specific problems, but under this model, that is not possible. It is likely that this environment faces rapid change; you might try to establish solutions to problems that are very ill-defined (the culture is weak, and the politics are pervasive, and many departments have hidden agendas) and therefore hire a consultant to come in and attempt to manage the problems and challenges objectively. In this model, decision-making is haphazard and chaotic, and in fact sometimes depends largely on luck!.


There may be some more documents on Different types of Decision-making Model , this article is written by taking the help from Internet and other resources like Books, journals etc.


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