What are the Levels of the Decision Making Process? - MBA Official (2024)

FAQs

What are the types of decision making processes in MBA? ›

The three types of decision-making in management are: Strategic Decision-Making: Involves long-term decisions that affect the overall direction and objectives of the organization. Tactical Decision-Making: Concerned with medium-term decisions about implementing strategic plans and achieving organizational goals.

Once perceived solutions must be designed, once solutions are designed choices have to be made about a particular solution, finally the solution has to be implemented. Simon described 4 different stages in decision making: intelligence, design, choice and implementation.

Rational Decision-Making

Decision theory provides a structured and logical approach to decision-making, like following a roadmap and helping managers make well-thought-out choices based on data, facts, and careful analysis. This prevents hasty decisions and leads to better outcomes.

What are the 4 decision-making styles? The four decision-making styles are analytical decision-making, directive decision-making, behavioral decision-making, and conceptual decision-making. The decision-maker should choose the most appropriate style for the choice at hand.

Figure 2 describes decision making as a four-stage process: intelligence, design, choice and implementation.

Much of our success as decision makers depends on our ability to define the four basic elements that make up any decision situation: objectives, alternatives, uncontrollable variables, and parameters. Objectives are the reasons why we decide and are defined by the future state we hope to reach.

It involves four interrelated phases: explorative (searching for potential alternatives), speculative (identifying the factors that influence the decision problem), evaluative (analyzing and comparing the alternative courses of action), and selective (making the final choice of the best course of action).

The business decision making process is commonly divided into seven steps. Managers may utilize many of these steps without realizing it, but gaining a clearer understanding of best practices can improve the effectiveness of your decisions.

What are the five models of decision making? ›

There are three types of decision-making theories: normative, descriptive, and prescriptive decision-making theories.

Decision theory is concerned with the reasoning underlying an agent's choices, whether this is a mundane choice between taking the bus or getting a taxi, or a more far-reaching choice about whether to pursue a demanding political career.

At the highest level we have chosen to categorize decisions into three major types: consumer decision making, business decision making, and personal decision making.