Managerial decision making depends on many factors, including the ability to set priorities and time decisions correctly. However, the most important influence on managerial decision making is a manager's personal attributes or his or her own decision‐making approach. The three most common decision models are as follows:
Regardless of the model favored by a manager, understanding personal tendencies and moving toward a more rational model should be the manager's goal. The best decisions are usually a result of a blend of the decision maker's intuition and the rational step‐by‐step approach.
Rational/Logical decision model
This approach uses a step‐by‐step process, similar to the seven‐step decision‐making process. The rational/logical decision model focuses on facts and reasoning. Reliance is on the steps and decision tools, such as payback analysis, decision tree, and research.
Through the use of quantitative techniques, rationality, and logic, the manager evaluates the alternatives and selects the best solution to the problem.
Intuitive decision model
The managers who use this approach avoid statistical analysis and logical processes. These managers are “gut” decision makers who rely on their feelings about a situation. This definition could easily lead one to believe that intuitive decision making is irrational or arbitrary. Although intuition refers to decision making without formal analysis or conscious reasoning, it is based on years of managerial practice and experience. These experienced managers identify alternatives quickly without conducting systematic analyses of alternatives and their consequences. When making a decision using intuition, the manager recognizes cues in the situation that are the same as or similar to those in previous situations that he or she has experienced; the cues help the manager to rapidly conduct subconscious analysis. Then a decision is made.
Predisposed decision model
A manager who decides on a solution and then gathers material to support the decision uses the predisposed decision model approach. Decision makers using this approach do not search out all possible alternatives. Rather, they identify and evaluate alternatives only until an acceptable decision is found. Having found a satisfactory alternative, the decision maker stops searching for additional solutions. Other, and potentially better, alternatives may exist, but will not be identified or considered because the first workable solution has been accepted. Therefore, only a fraction of the available alternatives may be considered due to the decision maker's information‐processing limitations. A manager with this tendency is likely to ignore critical information and may face the same decision again later.