Decision making models

Question 1

Scientific decision making

Answer 1

Involves the use of facts and data in a systematic way in order to arrive at a logical and evidence-based decision. The scientific approach will involve a structured approach that will involve:
>Clearly identifying the objective /objectives or problem to solve
> Collect all relevant information needed to make the decision; this can include primary or secondary data and could take some time to gather
>Analyse the information to identify possible ways forward
> Make and implement the decision
> Monitor and review the decision and change if needed.
The scientific approach is favoured by most businesses making strategic and tactical decisions as it is based on logic and evidence and should reduce the risk of failure.
The process includes the consideration of alternative
decisions, so all possible courses of action are included, and the business will undertake a full analysis before making any decisions.

Question 2

Intuitive decision-making

Answer 2

Uses experience and intuition (gut feeling) to make decisions. This has proved successful for many entrepreneurs and managers who use their experiences and emotions to decide. There is often no data or systematic approach to back up this decision. Intuitive
decisions can be made quickly and are often useful for operational decisions, however at strategic and tactical level there is a large risk on relying on intuitive decision making alone.

Question 3

Evaluative considerations

Answer 3

The predicted outcomes and estimates need to be based on valid data and research if they are to have any real quantitative value.
All need to be considered before a final decision is made.
As with all decision-making methods, decision tree analysis should be used in conjunction with other types of decision-making. Decision trees are just one important part of a business decision-making tool kit.

Question 4

Examples of qualitative factors that will also have an influence on the decision made

Answer 4

• the effects of decisions on stakeholders e.g., workforce,
  management, suppliers and customers
• training costs
• recruitment costs
• capacity management
• marketing impacts.