Decision Making Theory: Process, Models and Stages

Decision-making theory was first brought in to existence by Herbert A. Simon in his work on Administrative Behaviour through his book ‘A Study of Decision-Making Process in Administrative Organisation’ in the year 1948. Decision-making process consists of two parts – the actual making of a decision and the other is the process of action or implementation. Herbert Simon says that decision making is very important for an organisation. Decisions need to be taken properly and in a timely manner in order to avoid the objective of the organisation going vain. Both parts of the decision-making process are equally important.

“Decision making is usually defined as a process or sequence of activities involving stages of problem recognition, search for information, the definition of alternatives and the selection of an actor of one from two or more alternatives consistent with the ranked preferences,” this is one of the definitions of decision making. There are many others as the decision-making process is used in different fields and each field has its own convenient way of defining it. The epitome of all the definitions is – Decision making means the adoption and application of rational choice for the management of the private, business, or governmental organisation in an efficient manner.

Nature of Decision Making Process

According to Simon, the process of decision making is like making compromises. This is because when you are making a decision; you choose from many alternatives and make a compromise on a few of them. While making decisions one must make sure not to cause a conflict between the authority and policy. Hence, policymakers have to make compromises and modifications of approaches while making decisions or policies. Decision-makers should make a rational and informed choice. They need to consider the elements of entering the process, implications of implementation, and feasibility of the policy.

Read: Public Policy

The decision is never the product of a single person. Decisions should be taken collectively in order to arrive at the best alternative. Having a collective decision allows better assessment of the pros and cons of the decision and also maximum feasibility can be attained. Having many brains giving their inputs will the policy or decision more inclusive of the diversity and hence more acceptable by the populace. While taking a decision, the decision wouldn’t be of just one issue but a number of issues. This way the time consuming and lengthy process of decision making can be made easier. Also, to have a substantial decision, it is better to take a number of issues.

Irrationality is unavoidable. Be it a democratic or a non-democratic, somewhere there is a chance to have some kind of bias or the need to be irrational. If a certain section of the society needs some allowance, despite it being irrational, for the peace of all, the decision would be taken in favour of the need for the section.

It may appear that the dichotomisation between rationality and irrationality is irrelevant but this needs to be addressed. Not always a rational decision would satisfy society. If maximum benefit and utility were the only criteria while making a decision, it would have been difficult to have a welfare state. If rationality is given the top priority, it may jeopardize the prospect of the welfare principle.

Models of Decision-Making Process

The concept of Decision-Making is a relatively contemporary idea that has been especially studied by Richard Synder, Chester Bernard and Herbert Simon. The former has worked extensively on decision making in domestic and international politics while the latter two have worked on decision making in the public administration sector. With time the decision making theories of the 1950s have turned in to policy analysis in the 1960s and 1970s.

There are four models of the decision-making process and they are as follows –

  1. Rational Actor Model

This model solely believes in rational methods of decision making. This is based on Economic Theory and utilitarianism. It is believed that an ‘Economic Man’ works rationally and looks at the maximum utility while making a decision. This model can be said to be the best form for business organisations that seek maximum benefit.

  1. Incremental Model

In this method, it is said that the policies should be formulated in such a manner that there is a scope for review and revise whenever required. Policy formulation should be made flexible in order to avoid major mistakes and miscarriages.

  1. Bureaucratic Organization Model

This was devised in the backdrop of the Cuban Missile crisis in 1962. Bureaucrats play the most important role in both the formulation and implementation of the decisions. In this process, it is said that there are certain ideal inclinations and long cherished values which impact the process of decision making. This impact is unavoidable at times.

  1. Belief System Model

In the belief system model, the decisions are taken within the decision-makers or the states’ ideological and deep-rooted beliefs. For example, a communist country cannot make a decision that is against the welfare of its citizens. No matter how rational a decision is, it is made by keeping the deep values incorporated by the decision-makers.

Stages of Decision Making

There are again four stages of decision making, namely – Policy initiation, Formulation of the decision, Implementation of Policy and Evaluation. The process of policymaking is initiated at the background of an existing problem. The process should commence at the time right time and with the right details in handy. This is to ensure that the problem is addressed timely and properly. The time lag between the emergence of problems and the taking of a decision is inevitable but can be reduced considerably by the speedy response. The process of formulation of the decision is rather the tough part having involved various personals and detailing that it requires. This is the most important stage of decision making as the more accurate the solution to the problem is, the earliest would the problem be solved. Implementation of the policy is also a vital stage. It is not only enough to make a decision but this decision has to reach the subjects; that is when it is successful. In order to have a successful policy or decision, it is most important to implement the needful as prescribed in the policy. The process of implementation should also be checked in a time-bound manner. Evaluation is simply the result of the decision or policy. It tells how successful the policy or decision is and its pros and cons. This would be helpful to review and revise the problem in a needful manner. It is also necessary to evaluate because of the complex and dynamic. What is needed today might not be a requirement for tomorrow. Hence it is important to evaluate the decision.


It is said by a few scholars that though there is a great emphasis on rationality, it is difficult to apply in reality. Rationality might seem like the most feasible and unbiased way of making a decision but it has its own set of disadvantages especially when dealing with a state. If a state takes a rational decision on every problem that incurs it jeopardize the lives of many citizens. The other critique is that not always can one achieve to gather impartial facts and information, normative facts of social beliefs and faiths. One other critique is that it is almost inevitable to avoid personal bias while making decisions. This can be seen during the Cold War when countries like Cuba and Egypt were treated by Washington while they sought the Russian way.

Conclusion: Decision-making theory is one of the contemporary theories that have been built during the mid-20th century. This theory has brought into the picture of how important the process of decision making is in order to have a systematic and sustainable lifestyle. Though it has its own set of drawbacks, it is still an important part of state administration and various other organisational administrations.

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Sunaina is an undergraduate student pursuing Political Science and Economics from the University of Delhi. She finds herself in a never-ending quest!