Decision Models

In the last byte, we looked at the various steps involved in decision making. In today's byte, we begin our discussion on various decision models.

Mangers make decisions that involve significant risk and in the face of uncertainty, they don’t have complete information most of the time about the problem and are forced to decide and act. Decision making could thus be extremely stressful since they would be ultimately responsible for the outcomes of their decisions. Added to this is the kind of decisions that managers are required to do - they could range from simple ones to painful ones like exiting businesses, firing people and admitting wrong!

If one is to measure the success of a manager it would be through the number of effective decisions that one makes. An effective decision is one which is timely and meets the desired objective and is acceptable to those individuals affected by that decision.

There are multiple ways in which one could model the decision making process, here is a list of those that we would be dealing with over the next few bytes:

1. Rational Model
2. Bounded Rationality Model
3. Garbage Can Model