The document discusses several decision making models, including rational models that seek an optimal outcome, bounded rational models that recognize limitations in information and options, and other tools like the Vroom-Jago model for determining whether to make a decision individually or as a group. It also covers models for assigning roles in decision making such as the Bain model and approaches like WRAP and Six Thinking Hats that attempt to address weaknesses in rational models by considering multiple perspectives.

1. Decisions Decisions
Decisions
A brief overview of decision making models

2. Rational Models

3. The Rational Model
A rational decision model assumes that there is one best, or optimal, outcome.
Because of this it is sometimes called an optimizing decision making model.
The model assumes that it is possible to consider every option, to know the
future consequences of each decision and the “utility” (value) associated with
each outcome.
This impractical in all but the simplest of situations.
The rational model often underpins other methods of decision making.

4. Example Rational Model
Here is a six step model of rational decision making often taught in schools:
1. define the situation and the desired outcome
2. research and identify options
3. compare and contrast each alternative and its consequences
4. make a decision / choose an alternative
5. design and implement an action plan
6. evaluate results

5. Other Rational Based Models
Other related models include
● Decision Matrix Analysis
● Pugh matrix
● SWOT analysis
● Pareto analysis
● Decision Trees
Even the simple “two-column” list of pros and cons to help make a choice about
whether to do a thing is underpinned by rational model assumptions (you can
list all pros and cons, you know the value of all, you know the likelihood etc
etc.).
Perhaps more importantly, it also assumes that this is an ‘OR’ not an “AND”...

6. Rational model and economics
The rational model, and the concept of the rational actor (us) making rational
decisions, underpins traditional economic theory.
More recent work in behavioural economics seeks to address the difference
between how the rational model assumes decisions are made, and how
decisions are actually made by individuals and groups.
Basically we’re nothing like as rational as the rational model assumes.

7. Bounded [Rational] Models
A refinement on the rational model, bounded models, recognise that it is not
possible to consider all the possible outcomes, their probability and their utility
(value). Key elements of bounded decision making models are
1. Limited time and limited access to information means we need to
recognise that we have imperfect information
2. We need to recognise that there is ambiguity
3. Aim is to select the first satisfactory option (something that is “good
enough”)
4. Introduces the concept of “satisficing” - seeking a satisfactory outcome
rather than the optimal outcome

8. Other Models / Tools

9. Deciding who to include
in the decision

10. Vroom-Jago: decision process types
The Vroom-Jago decision model is used by leaders to determine whether they should make a decision alone or involve
a group, and to what extent the group should be involved.
5 Processes of decision making defined by V-J:
A1 Autocratic l You, the decision maker, use the information available to make the decision yourself.
A2 Autocratic ll
You request information from members of your team. They may or may not know why you want such information.
They neither define the situation, alternatives or final choice.
C1 Consultative l
You explain the situation to the individual members of the group but they do not get together as a group. You
make the final decision.
C2 Consultative ll
There is group discussion where you explain the situation and gather ideas and suggestions. Again, you're
responsible for the final decision making.
G2 Group ll
The group as a whole make the decision. You as the leader present the situation and the group defines
alternatives and reaches a consensus decision. The leader acts as a facilitator and allows the group to agree on
the final choice.

11. Vroom-Jago: choosing the process
Questions are used to determine the right approach. V-J uses 7 questions in a decision tree.
1. Is high quality important here or is a good solution absolutely critical? (is this a case where it
would not be acceptable having lots of equal alternatives?)
2. As the leader, do you have enough information of your own to make a good decision?
3. Is the problem structured in that it is clearly defined, organized and has recognized solutions?
4. Do the members of the group have to accept this decision for it to work?
5. If you make this decision yourself, are you sure the group will accept it?
6. Are the group members aligned with the same goals that you are trying to achieve?
7. Is disagreement likely among group members in reaching a decision?

12. Vroom-Jago: Decision Tree
Q1: Is high quality
important here or
is a good solution
absolutely critical?
Q2: As the
leader, do you
have enough
information of
your own to
make a good
decision?
Q1
Q2
Q4
Q6
Q3
Q4
Q4: Do the
members of the
group have to
accept this
decision for it to
work?
Q3: Is the problem
structured in that it
is clearly defined,
organized and has
recognized
solutions?
Q5: If you make
this decision
yourself, are
you sure the
group will
accept it?
Q6: Are the group
members aligned
with the same goals
that you are trying
to achieve?
Q7: Is disagreement likely
among group members in
reaching a decision?
Q4
Q4
Q5
Q5
Q5
A1
G2
A2
C2
A1
A1
A1
A2
Q6
Q7
C2
C1
Q7
G2
C2
G2
In the example, if the quality requirement is not
high, choose the upper limb. With regards to
question 4, if they have to accept it, choose 'yes',
then 'yes' again if you know they will accept your
decision. This points you at A1, so you go ahead
and make the decision yourself.
YES
NO
A1 Autocratic I
A2 Autocratic II
C1 Consultative I
C2 Consultative II
G2 Group II

13. Deciding what role each
person plays

14. Bain Decision Making
Model
Focuses on the roles of people involved in
the decision

15. AGREE
INPUT RECOMMEND DECIDE PERFORM
Someone who’s formal
agreement with the
recommendation is
required for sign-off
Bain must haves:
- Design clear decision processes
- Assign Specific Roles
5 Roles
Analytical Skills
Common Sense
Organisational
Smarts
Must be taken seriously,
because those providing it
may be involved in
implementing the decision
The person with “the
D” is ultimately held
accountable for it.
Those in the perform
role are responsible
for executing the final
decision
Bain Decision Making Process and Roles

16. Org Role / Decisions
Product
Management
Central
Marketing
Regulatory
Marketing -
Creative
Sales /
Customer
Service
What is the overall messaging
strategy R / D I / P
What claims do we want to make?
What features and benefits do we
want to emphasise?
D R A I / P I
What is the look and feel of the
materials? I D I R / P
Example Bain Decision Matrix

17. (attempting) to avoid the
weaknesses of rational
models

18. WRAP
“WRAP” Decision Making - seeking to avoid
the pitfalls of narrow focus, selective bias,
perspective and fixed opinions
- Dan and Chip Heath

19. “WRAP” Decision Making
Authors (and brothers) Chip and Dan Heath propose four steps for improving decision making. Below is an overview of that process, whose initials spell
“WRAP.” It’s elaborated in their new book,Decisive: How to Make Better Choices in Life and Business (Crown Business, March 2013).
Widen your options
For example: Consider at least two robust options for every decision.
Important because: Adding just one alternative makes very good strategic decision
making more likely—six times more likely, according to one research study.
Reality test your assumptions
For example: Enforce vigorous debate on both sides of an issue and resolve debates
with data by running small experiments to test assumptions.
Important because: We are two times more likely to consider information that tends to
confirm our assumptions than information that tends to disconfirm them.
Attain some distance
For example: “Fire” yourself and ask what your successor would do. That’s how Andy
Grove broke through Intel’s indecision in the mid-1980s about whether to divert
resources from the company’s long-standing core business in memory chips and go full
force into microprocessors.
Important because: The status quo is powerful. Research shows that over time, even
arbitrary choices are regarded as valuable and right.
Prepare to be wrong
For example: Set a clear tripwire now: “If we don’t achieve a market share greater than
20 percent in the first year, we’ll revisit our idea of entering the Southern market.”
Important because: Our predictions are often incorrect, even when made with high
confidence. In one study, doctors who expressed complete certainty in a diagnosis
were wrong 40 percent of the time.

20. Thinking differently

21. 6 Hats
De Bono

22. De Bono’s Six Thinking Hats
Edward de Bono's Six Thinking Hats attempts to combine rational and intuitive aspects of decision
making. The idea is to consider a decision from multiple perspectives by wearing different hats to give
a wiser, more rounded decision.
● White hat: Consider data available and plug any gaps
● Red hat: Use intuition and consider emotional aspects
● Black hat: Critically consider weaknesses and produce work arounds
● Yellow hat: Optimistic view, useful when all seems lost
● Green hat: Creativity and how to apply it
● Blue hat: Controller, organizes the thinking