Decision-Making Models Analisys

Decision-Making Models Analysis

Decision-Making is a distinctiveness of living creatures but making reasonable decision- making is a particularity of thinking animals, and the only know thinking animal is the Homo Sapiens Sapiens. Other animals make decisions based on the so called survival instinct, which allow them to either run from a natural enemy or hunt for a prey.

Homo sapiens, or most commonly called humans are more complex than that. Being capable of thinking and reasoning a human can made a more intricate decision, like determining where to live, what to eat, choose a partner, and develop science, religion, agriculture, political systems and even make military decision of life and death.

As human kind evolve into a more multifaceted being, the decisions became more and more critical and difficult, required a more deep knowledge about the factors leading to make the decision, also with time humankind created several decision-making techniques to help himself to do decisions in a more effective way,

Today humankind even created a definition of what a decision-making should be: Decision making is the cognitive process of selecting a course of action from among multiple alternatives. Every decision-making process produces a final choice. It can be an action or an opinion. It begins when we need to do something but we do not know what. Therefore, decision-making is a reasoning process which can be rational or irrational, and can be based on explicit assumptions or tacit assumptions.(Decision Making, 2006).

There are many styles or models of decision-making techniques, some apply for multiple situations and some were created to help the decision-making on a specifict field like medicine or mathemathics, bussiness, industry, marketing, financial and phylosophical. But all these Techniques or style involve a common thing , the use of the cognition, which is the real propeler of our capacity to make decisions.

Here is a list of some of the most common models of decision-making,

Decision making in one's personal life

* flipping a coin, cutting a deck of playing cards, and other random or coincidence methods

* accepting the first option that seems like it might achieve the desired result

* tarot cards, astrology, augurs, revelation, or other forms of divination

* acquiesce to a person in authority or an "expert"

* listing the advantages and disadvantages of each option, popularized by Benjamin ranklin (Decision making, 2006)

An alternative may be to apply one of the processes described below, in particular in the Business and Management section.

Decision-making in business and management

In general, business and management systems should be set up to allow decision making at the lowest possible level.

Several decision-making models for business include:

* Analytic Hierarchy Process - procedure for multi-level goal hierarchy

* Buyer decision processes - transaction before, during, and after a purchase

* Complex systems - common behavioural and structural features that can be modelled

* Corporate finance:

* The investment decision

* The financing decision

* The dividend decision

* working capital management decisions

* Cost-benefit analysis - process of weighing the total expected costs vs. the total expected benefits

* Decision trees

* Program Evaluation and Review Technique (PERT)

* critical path analysis

* critical chain analysis

* Force field analysis