Types of Decision Making - An Overview

We determine types of decision making by looking at outcomes and the impacted entity. At the highest level we have chosen to categorize decisions into three major types: consumer decision making, business decision making, and personal decision making. We make this specific choice for the purpose of improving decision making by first identifying the types of decision making in a way that helps establish the context for decisions being made. In our decision making model, establishing the types of decisions makes it possible to identify the related decisions that will influence, constrain and be influenced and constrained by a specific decision.

Why Choose Consumer, Business, and Personal as the Major Types of Decision Making?

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Using these three major types puts you in a position to reuse the knowledge created through previously made decisions. Generally, decisions are made in the context of the individual, or an organization or business. While consumer decision making is made in both an individual and business environment, we have chosen to make this a separate type because of the common knowledge elements that can benefit decisions made in either domain.

We recognize that types of decision making can include a number of additional categories. An easy example, and one that might be included later, is government decision making. For now, we will work on the premise that a business decision making network will expose many of the same decisions and enable access to the knowledge that can be reused for improved decision making.

Additional types of decision making that could be considered based on outcomes include financial, legal, strategic and tactical decision making. All are possible valid types, but we will consider them as sub-types in the context of the person or business impacted. In other words, personal decision making will include financial, legal, and strategic sub-types of decisions that impact the person or individual.

Summarizing our major decision making types:

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  • Personal decision making has the decisions that determine who we are as individuals and the outcomes we create for ourselves and others with which we have relationships. This category includes what is sometimes referred to as life decisions.
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  • Consumer decision making consists of choices that determine our effectiveness in purchase decisions that occur in either a personal or business context. In this case, the consumer (entity) can be an individual or a person within a business.

Creating some helpful distinctions related to types of decision making

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Unfortunately, language is not precise, and creates the opportunity for confusion that can contribute to information overload, or worse, information noise. This is one of the reasons we include a glossary, and try to ensure that we provide clarity for the terms we use around our decision making topics. Linguistics exists as a formal area of study to address this issue, with sub-topic areas specifically focused on addressing meaning (semantics and pragmatics).

Above we have provided our specific meaning for types of decision making. To add clarity to our meaning here is how we distinguish some related, but possibly confusing, terms. When we researched this topic we found many sources that are unclear about decision making types particularly with respect to the following:

  • Decision making techniques describe specific analysis tactics and schemes that can be used in the Decide step of our process. Some examples are multiple decision criteria analysis and decision trees.
  • A decision making process will provide a defined set of steps, that when followed, guide participants to a decision outcome. We use Frame, Innovate, Decide, and Manage as the four high level steps in our process.

Approach, method, technique, process, style, and sometimes type, are words that are often used interchangeably. Within our website and related tools we will attempt to use these words consistent with the distinctions we have made, and we welcome feedback that would improve clarity and consistency. Clarity of meaning and understanding can overcome a number of decision making mistakes, particularly in group settings. Take the time to develop common meaning and clear distinctions and see your decision outcomes improve.

Quote from Bill Jensen


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