Essential Tools

In psychology, decision-making is regarded as the cognitive process resulting in the selection of a belief or a course of action among several alternative possibilities. Every decision-making process produces a final choice that may or may not prompt action. Decision-making is the study of identifying and choosing alternatives based on the values and preferences of the decision maker. Decision-making is one of the central activities of management and is a huge part of any process of implementation.

Many different techniques of decision making have been developed, ranging from simple rules of thumb, to extremely complex procedures.  The method used depends on the nature of the decision to be made and how complex it is.

The method described here follows seven stages:

1. Listing all possible solutions/options.
2. Setting a time scale and deciding who is responsible for the decision.
3. Information gathering.
4. Weighing up the risks involved.
5. Deciding on values, or in other words what is important.
6. Weighing up the pros and cons of each course of action.
7. Making the decision.

1. Listing Possible Solutions/Options

In order to come up with a list of all the possible solutions and/or options available it is usually appropriate to work on a group (or individual) problem-solving process. This process, could include brainstorming or some other 'idea generating' process. 

This stage is important to the overall decision making processes as a decision will be made from a selection of fixed choices.  Always remember to consider the possibility of not making a decision or doing nothing and be aware that both options are actually potential solutions in themselves.

2. Setting a Time Period and Deciding Who is Responsible for the Decision

In deciding how much time to make available for the decision making process, it helps to consider the following:

• How much time is available to spend on this decision?
• Is there a deadline for making a decision and what are the consequences of missing this deadline?
• Is there an advantage in making a quick decision?
• How important is it to make a decision?  How important is it that the decision is right?
• Will spending more time improve the quality of the decision?

Responsibility for the Decision

Before making a decision, it needs to be clear who is going to take responsibility for the decision.  Remember that it is not always those making the decision who have to assume responsibility for it.  Is it an individual, a group or an organisation?  This is a key question because the degree to which responsibility for a decision is shared can greatly influence how much risk people are willing to take.

If the decision making is for work then it is helpful to consider the structure of the organization that you are in.  Is the individual responsible for the decisions he or she makes or does the organization hold ultimate responsibility?  Who has to carry out the course of action decided?  Who will it affect if something goes wrong?  Are you willing to take responsibility for a mistake?

Finally, you need to know who can actually make the decision.  When helping a friend, colleague or client to reach a decision, in most circumstances the final decision and responsibility will be taken by them.  Whenever possible, and if it is not obvious, it is better to make a formal decision as to who is responsible for a decision.  This idea of responsibility also highlights the need to keep a record of how any decision was made, what information it was based on and who was involved.  Enough information needs to be kept to justify that decision in the future so that, if something does go wrong, it is possible to show that your decision was reasonable in the circumstance and given the knowledge you held at the time.

3. Information Gathering

Before starting on the process of making a decision, all relevant information needs to be gathered.

If there is inadequate or out-dated information then it is more likely that a wrong decision might be made.  Also, if there is a lot of irrelevant information then the decision will be difficult to make, it will be easier to become distracted by unnecessary factors.

There is a need for up-to-date, accurate information on which to make decisions.  Such information needs to be gathered so that a well-informed decision can be made.  The amount of time spent on information gathering has to be weighed against how much you are willing to risk making the wrong decision.  In a group situation, such as at work, it may be appropriate for different people to research different aspects of the information required.

4. Weighing up the Risks Involved

One key question is how much risk should be taken in making the decision? Generally, the amount of risk an individual is willing to take depends on:

• The seriousness of the consequences of taking the wrong decision.
• The benefits of making the right decision.
• Not only how bad the worst outcome might be, but also how likely that outcome is to happen.

It is also useful to consider what the risk of the worst possible outcome occurring might be, and to decide if the risk is acceptable.  The choice can be between going 'all out for success' or taking a safe decision.

5. Deciding on Values

Everybody has their own unique set of values – what they believe to be important.

Many people decide to buy a car for themselves but different people buy different cars based on their own personal values.  One person might feel that price is the most important feature, whereas another person might be more concerned with its speed and performance.  Others might value safety, luggage space or the cars impact on the environment or a combination of these features.

Depending on which values are considered important, different opinions may seem more or less attractive.  If the responsibility for a decision is shared it is possible that one person might not have the same values as the others.  In such cases, it is important to obtain a consensus as to which values are to be given the most weight.  It is important that the values on which a decision is made are understood because they will have a strong influence on the final choice.

People do not make decisions based on just one of their values.  They will consider all their values which are relevant to the decision and prioritise them in order of importance. If you were to buy a car, what would be the five most important factors to you?

6. Weighing the Pros and Cons

It is possible to evaluate the pros and cons of each possible solution/option by considering the possible advantages and disadvantages. 

One aid to evaluating any solution/option is to use a 'balance sheet', weighing up the pros and cons (benefits and costs) associated with that solution. Having listed the pros and cons, it may be possible to immediately decide whether the option is viable.

However, it may be useful to rate each of the pros and cons on a simple 1 to 10 scale (with 10 high – most important to 1 low – least important):

In scoring each of the pros and cons it helps to take into account how important each item on the list is in meeting values.  This balance sheet approach allows both the information to be taken into account as well as the values, and presents them in a clear and straight forward manner.

7. Making the Decision

There are many techniques that can be used to help in reaching a decision.  The pros and cons method (as above) is just one way of evaluating each of the possible solutions/options available.

There are other techniques which allow for more direct comparisons between possible solutions.  These are more complicated and generally involve a certain amount of calculation.  These can be particularly helpful when it is necessary to weigh a number of conflicting values and options.

For example, how would you decide between a cheap to buy but expensive to run car and another more expensive car that is more economical to keep on the road?

Intuitive Judgments:  In addition to making reasoned decisions using the techniques shown above, in many cases people use an intuitive approach to decision making.  When making a decision many influences, which have not been considered, may play a part.  For example, prejudice or wishful thinking might affect judgment.  Reliance is often placed on past experience without consideration of past mistakes.  Making a decision using intuition alone should be an option and not done merely because it is the easy way out, or other methods are more difficult.

Intuition is a perfectly acceptable means of making a decision, although it is generally more appropriate when the decision is of a simple nature or needs to be made quickly.  More complicated decisions tend to require a more formal, structured approach.  It is important to be wary of impulsive reactions to a situation and remember to keep a record of the decision for future reference, no matter whether the decision was made intuitively or after taking a reasoned approach.

If possible, it is best to allow time to reflect on a decision once it has been reached.  It is preferable to sleep on it before announcing it to others.  Once a decision is made public, it is very difficult to change.