Business Management - Decision Making Styles

Decision Making Styles

All of us make decisions everyday. We make decisions as to where to eat and what to eat everyday. On a business level, the managers make decisions, ranging from hiring and firing to merger and acquisitions. All of us make different decisions based on our decision-making styles. The four decision-making styles are: Directive, Analytic , Conceptual, and Behavioral.

Directive style

Directive style decision-making has low tolerance for ambiguity and is rational. When a manager spots the dirt on the window, and orders the cleaner to clean the window now, that is a directive style decision-making. The cleaner has to follow the instruction, and does not need to ask for clarification.

Analytic style

Analytic style decision-making has high tolerance for ambiguity and is rational. The decision-making style is due to uncertainty, and lack of information. For example, when the management is discussing about acquisition. They do not make decision fast. They want to have more information before they make the major acquisition. They have to find answers to many "what if" questions.

Conceptual style

Conceptual style decision-making is characterized by high tolerance for ambiguity and is intuitive in nature. This kind of decision making is for a long term, and subjected to changes. For example, after Singapore gained independence, the Singapore government decided on industrialization. That was a conceptual style decision-making. There was no guarantee of success, and no historical data for analysis. As a result of the decision, Jurong Industrial Park was developed along with roads and infrastructure.

Behavioral style

Behavioral style decision-making has low tolerance for ambiguity and is intuitive. The manager possesses behavioral style decision-making will engage in team discussion. He is responsive to the mood of the team members. He makes decision based on what feels right, and what will motivate the team members to perform. The decision is communicated clearly and leaves no room for doubt. In reality, most of us possess more than one style of decision-making. In many cases, we switch the method of making decision based on the seriousness of the decision.

Methods Used for Decision Making

1. Decision Trees - one identifies options, branching out of an initial bipolar choice to make, by projecting likely outcomes. The limitation of this technique lies mainly in that it forces you to address the problem from only two possible avenues of solution right from the start.

2. The Pareto Analysis - is a technique to let you get the most "bang for the buck"! It is based on the Pareto Principle whereby you must identify which