Decision-making process

The Basic Idea

Which do you prefer, hamburgers or pizza? 

You probably came up with the answer to that question quickly — unless you’re really torn between those two delicious meals. Yet, whenever we are making a choice between two or more things, our brains go through a decision-making process.

When we are presented with a choice, we first have to identify the decision. For the hamburger vs. pizza question, that’s an easy step — you immediately know that the decision is between two food items. Next, we have to gather the relevant information. You think of hamburgers and pizzas and their respective tastes. Then, you identify alternatives. Are there any other options? Maybe a secret taco stash laying around? No.

Now that you know the parameters of the decision, it’s time to weigh the evidence. Since it’s based on personal preference, you only have to conjure up your own experience eating both. Which one have you preferred in the past? And finally: you’re ready to make the choice.1

If the question was to require an action, such as “Do you want to go get hamburgers or pizza?”, after making the choice, you would implement the action and order one or the other. The last step is to reflect on that decision. As you sit thedown with your slice of pizza, are you content? You evaluate your outcome so that in the future, you can improve your choices.2

A decision-making process is the cognitive process where you weigh alternatives to achieve a desired result.3

It doesn’t matter which side of the fence you get off on sometimes. What matters most is getting off. You cannot make progress without making decisions.


- American entrepreneur and motivational speaker Jim Rohn.4

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Key Terms

Problem Solving: while problem solving and decision making are related, they are not the same. Problem solving is an analytical process used to identify the possible solutions to a situation at hand and is sometimes a part of the decision-making process. However, sometimes you make a decision without identifying all possible solutions to the problem.5

Analysis Paralysis: the inability to decide because of over-thinking. People usually get stuck in the stage where they consider all the alternatives and can be overwhelmed by choice (known as the choice overload bias), preventing them from picking a choice.6

Boundary conditions: constraints necessary for the solution of a decision.7 The boundary conditions determine what the objective of the decision is and therefore what solutions will be suitable.8

Maximizing: a decision-making process in which an individual employs optimization, where they gain all the necessary data on alternatives to make the best decision.9

Bounded rationality: decision-making processes where individuals satisfice instead of optimize. 

History

Decision-making processes are one of the facets that make humans unique. There are definitely similarities between the ways that humans and animals make decisions (in fact, we wrote a whole article about it: “Decision-Making Parallels Between Humans and Animals”). But humans are thought to engage in more complex decision-making processes - our actions are less governed by instinct than animals.  

Since decision-making processes are an integral part of humanity, it’s impossible to pinpoint a time where they were first an object of research, as we have been interested in how humans make decisions as long as we have existed! In research, decision-making processes are usually examined as either group decision-making, or individual decision-making. 

In group decision-making, multiple individuals work together to analyze a question or problem, consider alternative choices, and make a choice. An obvious difference between group decision-making and individual decision-making is that the former process is usually more formal and occurs outside of internal thought processes. Being in a group also has quite impactful effects on the types of decisions we come to. For example, groupthink is a phenomenon borne from our desire to achieve consensus - individuals ignore evidence or neglect to speak out if their thoughts contradict the majority opinion. It is a form of group conformity that hinders critical thinking and can lead to suboptimal decisions. Additionally, groups tend to make riskier decisions than individuals.10

Yet, sometimes group decision-making processes are advantageous because there are a greater number of perspectives which can reduce the personal biases that come into play with individual decision-making. Groups can usually come up with a greater number of alternatives, because they have more time and resources. Oftentimes, individuals have to employ the satisficing technique, where they make a choice that is satisfactory rather than optimal. When satisficing, individuals don’t engage in problem-solving, but pick the first choice they come across that adheres to the boundary conditions, because it requires too much time, effort, and resources to gather all the necessary evidence and alternative options. 

Various research has gone into trying to outline the steps involved in the decision-making process. One of the earlier processes,developed by Australian psychologist Leon Mann in the 1980s, is known as the GOFER process. It was based on a theory Mann had previously proposed alongside psychologist Irvin Janis, the conflict theory of decision making, which suggests decision-makers must choose from a set of alternatives that each have positive and negative outcomes.11 GOFER represents an acronym for five decision-making steps:

  • Goal clarification. In this step, the decision-maker must determine what their goal is and what they are trying to achieve with their decision.
  • Options generation. The decision-maker conjures up different options that are available to them and that would help them achieve their goals.
  • Facts-finding. During this stage, the decision-maker examines what evidence they have on each alternative and what information they are missing that could help them make their decision. 
  • Effects. The decision-maker considers the positive and negative outcomes of each alternative.
  • Review. Now that a decision has been arrived at, the decision-maker considers how it will be implemented.12

Another popular decision-making process model is the DECIDE model, developed in 2008 by Hawaiian educator, Kristina Guo. It has similar steps as the GOFER model and Guo developed it to help healthcare managers make better decisions. The acronym stands for:

  • Define the problem.
  • Establish the criteria.
  • Consider the alternatives.
  • Identify the best alternative.
  • Develop a plan and implement the plan of action.
  • Evaluate and monitor the solution and feedback.10

While the first five steps are similar to the GOFER model, the DECIDE model has an additional step, evaluate, which is crucial for improving decision-making processes in the long run, as evaluating your choice will help you learn how successful it was and whether you should make the same decision in the future.

Consequences

Although we usually make decisions quickly, following decision-making models can help us make thoughtful decisions. By outlining the decision-making process, you can ensure that you are going through each step, considering the alternatives, and making an informed decision, which should lead to better outcomes. When it comes to group settings, being transparent about the decision-making process can also help other people understand why you’re making the choices you are. After all, wasn’t it irritating when your parents told you that the answer was no ‘because they said so’? 

Controversies

Oftentimes, people assume that decision-making processes are rational. Many models assume that individuals will make choices that maximize utility while minimizing costs. They also assume people have all of the information required to make the optimal choice — all of the models include a stage where the decision-maker analyzes various alternatives. 

But consider how many decisions you have made today. Is it really possible to go through each stage of the decision-making process, weigh out all the advantages and disadvantages of each alternative, and then come to a clear decision? Humans are thought to make around 35,000 choices per day, which makes it impossible for us to have the time, resources, or brain capacity to have all the information necessary to make a perfectly rational decision.13

That’s why many people criticize decision-making models for being unrealistic, and instead suggest that decision-making processes actually adhere to bounded rationality, where decision-makers satisfice instead of optimize. 

Case Study

Effectiveness of the GOFER Decision-Making Process

Giving teens the tools to make better, more thought-out decisions can help improve outcomes. In 1988, Leon Mann and his colleagues from The Flinders University of South Australia conducted a study to determine how effective teaching students the GOFER decision-making process was.14 

Mann and his colleagues developed and ran a GOFER course to teach teens generalized decision-making skills that would enable the students to apply the decision skills to a range of problems even beyond the school context. They delivered the course over the span of a year with the aid of two principal texts. The first book outlined decision-making processes and the GOFER technique, while the second applied the principles of GOFER to five areas: decision-making in groups, friendships and decision-making, subject choices, money, and finally, the GOFER technique employed in various different professions.14 

Mann et al. compared the students in South Australia who had taken the GOFER course with a control group of high school students who had not taken the course. They gave all students a questionnaire that asked them to reflect on their decision self-esteem, their vigilance with decisions, panic measures they might be prone to, cop out tendencies they use to avoid making decisions, and complacency. They filled out another questionnaire that examined their performance on decision-making across the five areas taught by the course, and a third questionnaire that asked them general information about decision-making, with questions like, “What makes a good decision maker?”14

Mann found that the students who had been trained in the GOFER method during the course had much higher reports of self-esteem as a decision-maker, and better habits when it came to making decisions (fewer panic, cop-out, and complacency tendencies). Mann et al. concluded that the GOFER decision-making process helped improve student knowledge on decision-making, raise their confidence, and improved their habits.14 

Decision-making styles

Just as there are various different decision-making models, there are different decision-making styles. Each style has different advantages and disadvantages, and can be categorized into four main types: directive, conceptual, analytical, and behavioral.15

Directive: Individuals with directive decision-making styles rely on rationality, but the decision-maker usually relies solely on their own knowledge without taking into account other opinions.15

Conceptual: The conceptual decision-maker likes to approach problems from every angle. They like to brainstorm potential alternatives, gather insights from other people, and try to come up with creative solutions to problems. This style of decision-making can be time-consuming as a result.15

Analytical: Similar to the conceptual decision makers, analytical decision-makers like to gather a lot of information before they make a decision. While the conceptual decision-maker is keen to come up with creative solutions, the analytical decision-maker wants to find data and facts that will support their decision. At times, this can prevent innovative choices, but it means that choices are well-informed and objective.16

Behavioral: Individuals with a behavioral decision-making style are group-oriented. However, instead of leaving the process open-ended, they will provide groups with potential options and alternatives and use the group sessions to discuss potential pros and cons. To be effective, this style needs a decisive leader who can listen to the pros and cons and execute a decision, or else discussion could go on forever.16 

Related Content

Group Decision Making: How to Be Effective and Efficient

Groupthink can be an obstacle to group decision-making processes, but so can it’s opposite. You’ve probably heard of the phrase ‘too many cooks in the kitchen.’ When many people are involved in the decision-making process, too much time can be spent debating between alternatives which can lead to a standstill or a delay in making a decision. While opposite issues, both of these phenomena are common challenges in group decision-making. To discover some principles that can help groups make more effective and efficient decisions, read this article by our contributor, Yasmine Kalkstein.

The Power of Narratives in Decision Making

Decision-making processes are usually outlined as a series of steps or stages. Humans like to categorize things in that way, because we tend to process the world around us as narratives that have a sequence: a beginning (a cause), a middle, and an end (an effect). That is known as the theory of narrative thought, which this article explores. In the article, contributor Constantin Huet explores why it is that we think in terms of stories, and what effects stories have on our consumer decisions. 

References

  1. 7 steps of the decision-making process. (2020, May 18). Lucidchart. https://www.lucidchart.com/blog/decision-making-process-steps
  2. Decision-making process. (2016, September 23). University of Massachusetts Dartmouth. https://www.umassd.edu/fycm/decision-making/process/
  3. Lunenburg, F. C. (2010). The Decision Making Process. National Forum of Educational Administration and Supervision Journal, 27(4). http://www.nationalforum.com/Electronic%20Journal%20Volumes/Lunenburg,%20Fred%20C.%20The%20Decision%20Making%20Process%20NFEASJ%20
  4. Sweatt, L. (2016, October 6). 13 Quotes About Making Life Choices. SUCCESS. https://www.success.com/13-quotes-about-making-life-choices/
  5. Problem solving vs decision making – what is the difference? (2019, July 30). Changeboard. https://www.changeboard.com/article-details/16960/problem-solving-vs-decision-making-what-is-the-difference-
  6. Chen, J. (2021, July 2). Analysis Paralysis. Investopedia. https://www.investopedia.com/terms/a/analysisparalysis.asp
  7. What Are Boundary Conditions? (2021, September 3). SimScale. https://www.simscale.com/docs/simwiki/numerics-background/what-are-boundary-conditions/
  8. Drucker, P. F. (1967, January 1). The Effective Decision. Harvard Business Review. https://hbr.org/1967/01/the-effective-decision
  9. Satisficing. (2021, October 7). The Decision Lab. https://thedecisionlab.com/reference-guide/psychology/satisficing/
  10. Belovicz, M. W., Finch, F. E., & Jones, H. (2017). Do Groups Make Riskier Decisions Than Individuals. https://doi.org/10.5465/ambpp.1968.4980628
  11. Loneck, B. M., & Kola, L. A. (2010). Using the Conflict-Theory Model of Decision Making to Predict Outcome in the Alcoholism Intervention. https://doi.org/10.1300/J020V05N03_09
  12. GOFER Process for Decision Making. Tools and Techniques to make Better Choices. (October 6). Briquinex. Retrieved January 18, 2022, from https://briquinex.blogspot.com/2020/10/gofer-process-for-decision-making-tools.html
  13. Krockow, E. M. (2018, September 27). How Many Decisions Do We Make Each Day? Psychology Today. https://www.psychologytoday.com/ca/blog/stretching-theory/201809/how-many-decisions-do-we-make-each-day
  14. Mann, L., Power, C., Harmoni, R., Beswick, G., & Ormond, C. (1988). Effectiveness of the GOFER course in decision making for high school students. Journal of Behavioral Decision Making, 1(3), 159-168. https://www.academia.edu/18668639/Effectiveness_of_the_GOFER_course_in_decision_making_for_high_school_students
  15. Lombardo, J. (2013, July 24). Decision Making Styles: Directive, Analytical, Conceptual and Behavioral. Study.com. https://study.com/academy/lesson/decision-making-styles-directive-analytical-conceptual-and-behavioral.html
  16. Malhotra, S. (2018, July 27). 4 styles of decision-making: A leader's guide. The Enterprisers Project. https://enterprisersproject.com/article/2018/7/4-styles-decision-making-leaders-guide?page=0%2C1

About the Authors

Dan Pilat's portrait

Dan Pilat

Dan is a Co-Founder and Managing Director at The Decision Lab. He is a bestselling author of Intention - a book he wrote with Wiley on the mindful application of behavioral science in organizations. Dan has a background in organizational decision making, with a BComm in Decision & Information Systems from McGill University. He has worked on enterprise-level behavioral architecture at TD Securities and BMO Capital Markets, where he advised management on the implementation of systems processing billions of dollars per week. Driven by an appetite for the latest in technology, Dan created a course on business intelligence and lectured at McGill University, and has applied behavioral science to topics such as augmented and virtual reality.

Sekoul Krastev's portrait

Dr. Sekoul Krastev

Sekoul is a Co-Founder and Managing Director at The Decision Lab. He is a bestselling author of Intention - a book he wrote with Wiley on the mindful application of behavioral science in organizations. A decision scientist with a PhD in Decision Neuroscience from McGill University, Sekoul's work has been featured in peer-reviewed journals and has been presented at conferences around the world. Sekoul previously advised management on innovation and engagement strategy at The Boston Consulting Group as well as on online media strategy at Google. He has a deep interest in the applications of behavioral science to new technology and has published on these topics in places such as the Huffington Post and Strategy & Business.

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