The 4 decision-making strategies in the company

Let's see how decision-making strategies are followed in companies and organizations.

There are a number of models and techniques that propose decision making strategies in the companyThe purpose of these models and techniques is to simplify certain decisions.

When we make decisions, we must bear in mind that there are many variables that we can control, but many others that do not depend on us. Furthermore, at a probabilistic level, there will always be a degree of uncertainty in every decision we make.

In this article we will learn about different decision-making models and other strategies that can be implemented in the company.

Decision-making strategies in the company: models

The models that we will review below, and which contemplate the decision-making strategies in an organization, aim, among other things, reduce the cost/benefit impact of "wrong" decisions, in order to finally achieve the objective set by the company..

These models help to choose the best option among the available options when deciding, taking into account the degree of uncertainty or possibility of making a mistake, which will always be present (although it can be reduced, as we have said).

1. Maximin (or Wald) model

The Maximin or Wald model proposes that, when making a decision, we focus on the lowest (bad) values among all possible solutions.. That is to say, "graphically" it would look like this: the lowest valuations would be 1 for solution A, 2 for B and 3 for C. Thus, within this range we would choose C, since it is the "highest among the worst" solution.

However, choosing through this model does not ensure that we decide "correctly" 100%, since we may lose important information, not taking into account the other solutions. This makes the "best option among the worst" does not always does not always have to be the best or the one that fits our problem perfectly.

According to Wald, this is a "pessimistic" decision-making model.

2. Maximax Model

The Maximax model would be the opposite of the previous one (it is therefore an "optimistic" model); it proposes to to choose or work with the data or solutions that have obtained the highest score..

For example, if in our data table solution A has obtained 8 points, and on the other hand solution B has 10 points, and solution C has 9 points, according to the Maximam model, we would choose solution B as the best solution, since its score is the highest, and therefore superior to all the others. That is, we would base our decision on this reasoning.

As in the previous model, choosing by means of this model does not assure us of a correct decisionWe "leave out" a lot of information (solutions with lower scores) and we may be choosing a decision that, in practice, is not the best one.

Other strategies to choose the best solution

Apart from these models that we have seen, there are other techniques or strategies for decision making in the company. Some of them are:

1. Assessing the overall situation

In order to make a decision, so as to reduce as much as possible the degree of uncertainty we are talking about, another strategy we can use is to assess the situation as a whole, in a general way, taking into account the most relevant intervening variables..

To do this, it is important to take a certain perspective in relation to the problem or situation, trying to see it from "outside", assessing the situation as objectively as possible. In addition to focusing on the present situation, it will be important to look beyond it, understanding the past causes that may have generated the situation, and visualizing possible solutions in the short and long term.

In this way, a holistic view of the situation will help us to to consider all the possible options in a more objective way..

2. Generate alternatives in parallel

This second of the decision-making strategies in the company that we propose focuses on having a plan B (even a plan C) in case plan A fails; in other words, on the one hand, logically we must bet heavily on plan A, on our decision, and trust that it will work. However, it never hurts to have alternatives available, it never hurts to have alternatives in case things do not work out as expected.

There will always be variables, however small they may be (whether from the organization itself, workers, competitors, etc.), that we will find it difficult to control, or that we will not have the option of doing so. Therefore, having other options in the pipeline will allow us to act with a certain sense of security, since, if plan A fails, there are other options that we have already considered. In addition, plan B or plan C may be circumstantial or temporary, i.e., they may be solutions to be applied until the situation is definitively resolved.

Thus, if we use a strategy of creating alternatives in parallel, we can If we use a strategy of creating alternatives in parallel, it will be easier to adapt to the problems that arise and not have to paralyze the entire project. and not have to paralyze the entire project.

Conclusion

In the final analysis, deciding means being able to plan the future and organize all the elements involved in it. organizing all the elements involved in it with the aim of achieving specific goals.

The fact that companies constantly have to decide between one option or another, and that they have to act in different areas of the organization (employees, investments, profitability, business plan, revenues and costs, etc.) to ensure that everything works as a perfect gear, makes the decision-making process extremely important, and the situation must be carefully considered in each case.

However, making mistakes is part of the process, and should be seen as something possible and something to learn from in order to move forward day by day.