Is decision-making a different process from problem solving; is one part of the other, or are we really talking about two aspects of the same thing? If we described problem solving as something like “finding ways of getting from a situation perceived as unsatisfactory, to one that we would rather be in”, and decision-making as “making a selection between various courses of action”, these processes might be thought of as separate. However, as we consider the full implications of what is involved, perhaps by expanding these “definitions” into a number of stages, the fallacy of considering them as discrete processes becomes apparent.
Below we can see two lists typical of those which people come up with when asked to identify the stages in problem solving and decision-making. It is clear that there is at least one decision-making stage – “select the best solution ” – within problem solving, and often many more. Moreover, people tend to find it difficult to make decisions because they have a problem “generating alternative ways of meeting the objectives”, “determining the evaluation criteria/techniques” and sometimes “identifying the objectives of the decision.”
- Identify and try to understand the problem
- Collect relevant information and reflect on it
- Generate some ideas
- Develop solutions
- Select the best solution
- Implement it
- Identify the objectives (goals) of the decision
- Find alternative ways of meeting these objectives
- Determine evaluation criteria/techniques
- Select best course of action
- Implement it
Looked at in this way, one process is obviously part of the other and vice versa. But which is the superior process and does it matter? The answers to these questions depend mostly on the view people take of the decision-making process itself …
Decision making is often thought of as a relatively simple choice between several courses of action. This is an oversimplified view because such a definition can imply that the decision-making process is a singe-stage affair, which happens in a fairly short space of time.It is true that some decisions we make, for example, whether or not to have another cup of coffee, do appear to be like this. We make a lot of rapid, simple choices and often are not conscious of doing any complex analysis or comparative evaluation of available alternatives. Some routine decisions (including business ones) may be like this, but many are not.
We could settle for the rational view of decision-making, which has been advocated as an appropriate method for dealing with decisions other than trivial ones such as the coffee example, as our description of the decision-making process. While to a large extent it supports the idea that a decision is a fairly straightforward choice between alternatives, the rational model does identify a number of steps we usually need to go through, and implies that the process is a conscious one. However, it also assumes that the decision-making process can be, is and should be rational. It leaves no room for intuition. You may feel that this is not the way things are with many of the decisions you have to make. If this is the case we need to think of the decision-making process as something rather more than just a choice between alternative courses, but what?
The rational model is difficult to apply in practice and it has been criticized on the basis that it assumes that an exhaustive set of alternatives are readily available along with a full knowledge of their consequences, and that it is also possible to measure the extent to which the consequences of each of these alternatives would achieve the desired objective. Furthermore, the rational model claims that we could then establish a consistent order of preference from these measurements, and could thus choose the alternative that came out the best. Seldom are these assumptions valid in practice.
Herbert Simon (1955) demonstrated that in reality the essential “ingredients” of the rational model were often compromised out of sheer necessity, resulting in an oversimplification of the whole process. He further claimed “there is a complete lack of evidence that, in actual human choice situations of any complexity, these computations can be, or are in fact performed.” In his principle of bounded rationality, he even seems to suggest that the capacity of the human brain is not up to handling the magnitude of the task of making a truly rational decision with complex real-world problems. Most of the time managers were settling for a satisfactory solution that suffices for the time being, rather than pursuing the optimum solution the rational model purported to yield.
Many real-world decisions are highly complex because of:
- multiple and often conflicting objectives
- difficulties encountered devising alternatives and deciding or reaching a consensus about what the evaluation criteria should be
- the personality and prejudice of the decision maker(s)
- the politics of the situation
- difficulties in getting reliable and relevant information.
Even if we ignore the issue that many of the factors we might want to consider when comparing alternatives are unmeasurable, things would have to be drastically simplified to make them fit the rational model, even if finding an optimal solution under these circumstances were not virtually impossible anyway. Furthermore, as Cyert, Simon and Trow found (1956), there are many decisions we have to make which involve just a single alternative, usually made by comparing this one possible course of action with som kind of explicit or implicit “level of aspiration”. We are not searching for the best alternative, but deciding whether the one we have is good enough. Ackoff (1983) also notes that what seems rational to one person is not necessarily rational to someone else. Therefore, if objective, rational decisions exist, they must depend heavily on consensus for their validity.
If the rational model of decision-making is often not viable, what can we use instead? Charles Lindblom (1959) says that what managers actually do in practice is to make successive limited comparisons restricting themselves to one (or a few) objectives at a time, often initially disregarding the social issues. They then compare the few alternatives that come easily to mind, more on the basis of past experience than anything else.
This choice involves selecting alternatives and evaluation criteria simultaneously, because the appropriateness of the latter varies between alternatives. Since this process can result only in a partial solution, it is repeated endlessly as conditions and aspirations change and as the accuracy of predictions improve. Decision-making has thus been perceived as a cyclical, incremental learning process. Though still in widespread use, the successive limited comparisons style of decision-making cannot, as Lindblom points out, guarantee we will not overlook potentially excellent potions in our limited search for alternative courses of action, nor can it ensure that we will consider all relevant criteria in our comparative evaluation of alternatives: they are starting to look like problems! The decision-making process appears to be heuristic (guided trial and error, based on past experience) and stochastic rather than rational.
(Hicks, 2004, s. 19ff)