Decision making involves
weighing alternatives

When making decisions managers can rely on their gut instincts, remember the advice of the last person with whom they spoke, or they can engage in a more formal process. In the rational-decision-making model, managers first ask, "What are the goals of this decision making process?"

They then gather relevant information, being careful to assess its reliability. Then, they list criteria related to the decision.

After this step, they place weights on the criteria depending on importance and centrality to an eventual good  decision. Finally, they compare various alternatives to the weighted criteria. The alternative consistent with the largest number of weighted criteria becomes the decision that the managers make.

This formal process becomes clearer with a specific example. Managers need to make decisions concerning whom to hire. They gather various types of information, including the workloads of current employees, projected expansions of products and services, the nature of the current job market, and the salary offers needed to attract good applicants. They then list the criteria of people who will make good employees. These criteria can include public speaking ability, writing skills, experience in leadership positions, a background of successful project completion, experience working as members of teams, information processing skills, and specific knowledge necessary for work success.

Then, these criteria are weighted. If the job calls for a great deal of face-to-face interaction with potential customers, oral presentation skills may be weighted higher than writing skills. If the job calls for frequent interaction with others on complex projects, experience working with teams may be weighted higher than information processing skills.

After the criteria are given weights, advertisements for job openings can be posted. After various applications and resumes are gathered, the qualifications of various candidates can be compared to the criteria. Decision-makers then develop a rating based on comparisons of criteria to qualifications.

These ratings can take the form of numbers indicating how well qualifications match the criteria, or they can be summarized as a simple rank ordering of candidates from highest to lowest. The candidates who score highest on the most criteria can then be invited for interviews.

After talking with the candidates, the decision-makers can examine their original ratings and make adjustments based on information and impressions gathered during the interviews. The candidate with the highest score then receives a job offer.

In my experience, different decision makers find reasons for disagreements at any time during the process.

Disagreements about criteria and weights are especially interesting since they reflect differences in the backgrounds of managers. In collective societies where group ties are extremely important, there may be criteria such as family ties to people already in the organization or shared experiences at the same high school as current employees.

In societies where hierarchy is important and where leaders do the talking and newly hired subordinates do the listening, there may not be a large weight placed on public speaking skills.

In hierarchical societies, decision-makers might also add a criterion that deals with the prestige of the school that applicants attended. In these societies, the relative prestige of schools is widely known, and parents place great emphasis on getting their children into "the right schools."

Many decisions are made that do not follow this rational model. Rather, people make decisions based on information that comes quickly to mind or that appeals to their emotions. In addition, people simply do not have enough time to go through the rational process for every decision they must make.

Good managers learn to make the distinction between important decisions that demand the rational process and less important decisions that can be made much more quickly.