Decision-making model | Learn how to make decisions for your business

Decision-making model | Learn how to make decisions for your business

Claudia Roca

Feb 19, 2022

Feb 19, 2022

Feb 19, 2022

Decision-making model | Learn how to make decisions for your business
Decision-making model | Learn how to make decisions for your business
Decision-making model | Learn how to make decisions for your business

You wake up in the morning, you have breakfast, you take a shower and then you go straight to the office. The first thing you do is check your email and you see so many pending tasks that you don't know where to start. In addition, your schedule displays a series of priorities that you also have to keep an eye on. 

This is something that many entrepreneurs experience, so maybe it's time for you to learn about the decision-making model. 

Yes, every day you choose between different alternatives, starting with choosing to drink coffee with sugar or looking for a lighter option. 

As time goes by and responsibilities grow, decisions often become more delicate. In this sense, developing a model for choices will help you reduce risk and uncertainty, which translates into peace of mind. 

Interested? Read on to find out:

What is the decision-making model?

Did you know that you make around 35,000 conscious decisions a day? Yes, that's a lot of work for your brain, but most of them are made in less than a second, which makes everything easier. 

However, in the business world it gets a bit more complicated as there is a lot at stake. Any mistake or right move could lead to results that will either lift you up or take you out of the market, so there is a growing need for a decision-making model. 

We define it as a set of tools that help you make much better choices in less time, which translates into better results for all companies. 

No, we're not talking about choosing at random, this would be leaving your future to chance and in the business world this is a mistake that could be very costly. 

These models have become more accepted over time, and if it's sometimes difficult to choose what you will eat today, you can't even imagine what it means to decide between the best sales or promotion strategy. 

So, read on 

5 Decision-making models

There are several decision-making models available today. Take a look and discover each one so that you can choose the best one for your team: 

1. Modelo racional

The rational model is ideal for those moments when you have to make a choice that will completely change your company in the near future. 

It's a good idea when you are part of a team, so that everyone can contribute to making the best decision. The steps you need to take are: 

  • Define the problem

  • Identify the criteria you will use to evaluate the hypothetical solutions. 

  • Give the necessary importance to each criterion

  • Make a list of possible alternatives

  • Analyse each one carefully

  • Choose the best solution for the team. 

This way, what the rational model seeks to do is to avoid those mistakes that are often made because of wrong assumptions. Therefore, risk and uncertainty are reduced, so you can use it individually or as a group. 

2. Bounded rationality model

Similar to the previous model, but leaves perfection aside and focuses on finding a solution that is good enough. 

It's an excellent idea if you don't have much time or enough information. Usually you would be under pressure and would need to make a decision before it's too late, that's where this model comes in.

Think about it, sometimes it's better to make a good enough choice rather than a perfect one, especially when you don't have enough leeway to apply the rational model. 

3. Vroom-Yetton model

The Vroom-Yetton decision model asks yes or no questions that will help you make the ideal decision for your company. 

You can do this alone or you can discuss it with your whole team. The advantage is that it is extremely flexible, to the point that anyone in the organisation can use it, but it does raise issues that you need to be aware of. 

The questions may not be the right ones or the group may be too large. All of these things should be considered before choosing this model. 

4. Intuitive model

Yes, believe it or not, making a decision by instinct requires a model that helps to eliminate as much uncertainty as possible. It is true that many of these decisions are made on the spur of the moment, but this does not mean that they are chosen at random. 

Remember that the primal brain tries to reduce the workload as much as possible so that you suffer as little as possible. In this sense, it uses patterns from past situations to help you decide what is best for the present moment. 

Like everything else, the intuitive model has pros and cons. The advantage is that it is very useful in situations that you have mastered perfectly, but it can become a weakness when you are in situations that you don't handle as well such as a new job. 

Take this into account before deciding to go for it. 

5. Recognition model

Although it may not seem like it, the recognition model has a lot in common with the intuitive model. 

It works simply: The manager identifies a pattern based on the information that is available. He or she then chooses a plan of action and thinks it through in his or her mind until it is memorised. 

Then, if the plan seems to work, the person sticks with it until the end, but if the opposite is the case, he or she modifies it until the ideal plan for the project is found.


Decision-making biases

Seeing all these models at your disposal, you may think that now everything will be super simple and that you will work in robot mode, but the truth is that it's not like that. 

Whenever you choose something, different variables go through your head and that is where the famous biases appear.  We don't want them to cloud your mind and that's why it's important that you take a look at the following list: 

1. Confirmation bias

We start with the confirmation bias. This is when you focus only on what confirms your beliefs and leave aside arguments that dispute them. 

This happens very often, especially when you are hiring new staff. Imagine that you have two very good candidates, but you choose someone based on only a few skills without taking into account the bad signals that others have detected. 

Confirmation bias will always seek to affirm the opinion you have, so it is essential to check with other members of staff to make the right decision.

 2. Availability heuristics

The availability heuristic is very interesting. You basically make decisions based on the first thing that comes to your mind. 

For example, let's say you have to go to another country and you are choosing the best method of transport for you. Well, you're torn between the train and the plane, even though you know that the latter is the safest and fastest way to travel nowadays. However, a great friend of yours had a bad experience on his last trip and arrived late at his destination. 

What decision would you make? You probably still trust airplanes, but thanks to the previous experience you would prefer to take the train to avoid bad experiences. 

It's important to detect this in order to make choices based on data and not on experiences that may be circumstantial. 

 3. Survivor's bias

Survivor bias can occur in many ventures. We are not saying it's wrong, but you have to study it with a magnifying glass so that you always choose what is best for you. 

Simply put, it's when you rely on success stories to make a decision regardless of the context of the case. 

A perfect example is the success stories that are sold to you when you buy a product. It's true that someone else did well with the item, but you don't necessarily have to do well with it. 

In industries such as multi-level marketing, this is used a lot. Some people manage to overcome the obstacles and achieve a superlative level of success, but the numbers tell you that only a few make it to the top. 

Want to avoid this bias? Try to have a slightly sceptical point of view before choosing what is best for you. 

4. Anchoring effect

The anchoring effect is about using initial information to make later decisions. 

For example, when it comes to negotiation, the one who gives the first price has everything to lose, as it is very difficult for the seller to raise the value in front of the buyer and vice versa. 

This shows how important it is to slow down the decision-making process. You should never go for the first information that comes to you, you should always expect to choose based on concrete data and not on inconcrete beliefs. 

4. Halo

The halo effect is related to the power of first impressions. We've all heard the phrase "Don't judge a book by its cover", and this demonstrates it perfectly. 

Maybe you hired that candidate because he or she has a good profile, gave you a great handshake and talks nicely, but you overlooked a number of flaws that could be detrimental to your company. 

Steps to make the best decision

Do you want to make the best decision for your business? Then follow these steps to reduce uncertainty as much as possible:

Step 1: Identify the decision to be made

The first thing you need to do is identify the decision you are going to make.  You can do this by asking yourself the following questions: 

  • What is the problem that needs to be solved? 

  • What objectives are you seeking to achieve with this choice?

  • How would you measure success?

Based on this information you will be able to establish common patterns that will help you make the best choice. 

Step 2: Gather important information

Gathering key information is fundamental to solving a given situation. You can't tackle an issue without knowing the context around it, so you need to apply data-driven. 

Talk to your team and identify which sources of information they will use for this problem. You will then have everything you need to find the right solution. 

Step 3: Identify alternative solutions

It's very important that you find several solutions to the problem, don't just focus on one option. 

There are answers that seem to be perfect, but when you put it into practice you realise that it isn't as useful as you thought it would be. 

An example would be when you are looking for a new work management programme. It may be the right one for you, but the management team will have another opinion and that's when you'll wish you had another option up your sleeve. 

Step 4: Think through the solutions carefully

At this stage you have all the alternatives in front of you, so it's time to analyse them cold. 

It's a good idea to make a kind of dofa matrix for you to determine what the pros and cons of each alternative are so that you can choose the best for that specific situation. 

Step 5: Choose one

Okay, you've taken your time to weigh each of the solutions, now you just need to choose the one that best suits you. 

Take into account the information you studied and choose the one that suits you best. One decision may be the answer, but you may need to choose a combination of several to get the best results. 

Step 6: Take action

OK, you've got your board's approval, so all that's left to do is wait. We recommend that you plan an implementation strategy so that you can put into practice everything about this solution. 

Give this alternative time - answers don't always work right away, so it's important that everyone has the patience to get the results


Decision-making is one of the most important processes not only in business but in life itself. Every day you make a choice, and although sometimes they are more inconsequential than others, there will come a time when you will have to decide on something of real importance. 

That's why we wanted to give you this information, so that you can reduce uncertainty and choose based on information, not opinions. 

You will see how your confidence increases in the blink of an eye.