Decision-Making Styles: How to Use 4 Decision-Making Styles

Decision-making is a matter of choosing between different possible courses of action. You make many decisions every day. Some decisions take little thought, while others can take time and have long-term consequences. Aim to approach decisions, particularly business decisions, strategically with a conscious awareness of the potential risks and rewards.

Decisions fall into roughly four categories. The following are most relevant to business decisions but can relate to decisions outside work or management contexts:

1. 1. Major and minor decisions: Scale differentiates major and minor decisions. A corporate board or corporate officers undertake significant decisions at work, such as corporate policy decisions, mergers and acquisitions, and large-scale production changes. Lower-level managers and employees make minor decisions, such as meeting schedules or small expenditures.
2. 2. Programmed and non-programmed decisions: A programmed decision is a relatively routine decision that does not require much reflection. Suppose there is an exceptional or unanticipated situation to address immediately, such as a sudden downturn and loss of revenue. In that case, the approach will be to make a non-programmed decision, usually involving upper management.
3. 3. Organizational and personal decisions: If a person decides to make a career change, that is a personal decision. While this will likely affect their current workplace, it is their decision to make. Alternatively, decisions that affect the whole organization, and the lives of those who work there, such as corporate downsizing, are organizational decisions.
4. 4. Operational and strategic decisions: Operational decisions contribute to the routine operation of a company. Decisions that pertain to day-to-day business, such as maintenance and payroll, are operational decisions. Strategic decisions, such as the beginning of a new production line or a corporate expansion, are made at the highest level of a company.

In the realm of management, there are four types of decision-making styles for different leadership styles. Each has its most appropriate contexts and comes with trade-offs of potential benefits and drawbacks:

1. 1. Analytical: Analytical decision-making requires a high aptitude for abstract reasoning. Analytical decision-makers are patient and deliberate, taking time to accumulate and process all the relevant data informing a decision. These leaders consider decisions from several perspectives and consult with different sources before making a decision. For certain situations, an analytical style might require a process that is too slow to be useful.
2. 2. Behavioral: The behavioral decision-making style relies on the feelings and behaviors of people in the decision process. Behavioral decision-makers are eager to hear input from others, and they value collaboration and group decision-making. The behavioral style accommodates long-term considerations like team cohesion and building a positive work environment, and it relies on the combined insights team members have gleaned from their past experiences.
3. 3. Conceptual: Conceptual decision-makers are big-picture thinkers. They favor complexity and creative problem solving, and usually have a high tolerance for risk. They are willing to challenge the status quo and think outside the box. Conceptual style decision-making can be costly, in both time and resources, but it can also lead to unexpected breakthroughs.
4. 4. Directive: The directive decision-making style involves short-term, urgent, and clear-cut decisions. Managers who practice this style of decision-making avoid ambiguity and overly-complex problems. Directive decision-makers can implement decisions swiftly and decisively, and give clear direction to their subordinates.

If you’re starting from scratch with a novel business challenge, it can be helpful to familiarize yourself with the four different decision-making models as you select a course of action:

1. 1. Rational: The rational decision-making model is logical and approaches the problem in a linear fashion, step-by-step, to eliminate uncertainty and emotion from the decision-making process.
2. 2. Bounded: The bounded rationality model is similar to the rational model but limits the amount of information input. You do not consider all variables when using the bounded rationality model, often because of time constraints. This model is about finding the best solution in the time given, so sometimes the right decision is good enough and not perfect.
3. 3. Intuitive: The intuitive decision-making model relies on the instincts and feelings of those involved in the decision process. Especially where there is stringent time pressure, the intuitive model can be a great asset, although it is also the most prone to being affected by biases.
4. 4. Creative: The creative decision-making model looks for the best solution using creative thinking. Brainstorming is a crucial part of this model, and a willingness to challenge assumptions and look at the problem from a novel perspective.

Whether you are making an everyday decision or a large-scale decision, keep the following tips in mind to ease the process:

1. 1. Be open to diversity. No two decision styles are the same. Some people are intuitive decision-makers, who listen to their gut feelings, others are more open-ended and creative, others are highly rational. Find which style works best for you by trying out different decision-making approaches.
2. 2. Schedule accordingly. Time is an essential factor in decision-making, and when there is a time crunch, it's easy to bow to the pressure and make the wrong decision. Creating a schedule and timeline can help prevent you from rushing a decision or getting caught in needless details.
3. 3. Welcome feedback. If you trust your team members, they can be your best allies in the decision-making process. Consult with your colleagues about possible solutions throughout the decision-making process.
4. 4. Learn from your mistakes. When you’ve made a poor decision, focus on what went wrong and how you can make better decisions in the future. It is best not to harp on past decisions and other possible outcomes.

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