Introduction
Human decision making can be considered a highly complex process that involves numerous stages, factors and internal mechanisms despite its apparent instantaneous nature. Researchers such as Chen-Bo (2011) explains that decision making itself is a reactionary process based on an assortment of internal and external factors which cause an individual to make a choice (Chen-Bo, 2011).
This can range from something as simple as choosing what type of clothes to wear to more complex situations such as corporate planning and development. Despite the intricacies involved in the decision making process, it can actually be reduced into 5 distinct stages, namely:
Situation
The situation stage is considered the initial stage of the decision making process since it is where a person is presented within a particular choice. This is based off of the reactionary process described by Chen-Bo (2011) wherein an internal or external circumstance causes a person to make a choice.
Sijun et al. (2012) attempts to explain this particular stage in the decision making process by explaining that situations occur in an individual’s life on a daily basis and, as such, without situations occurring there would be no decision making processes at all due to the necessity of having things occur to actually have the need to make a decision (Sijun et al., 2012).
Sijun et al. (2012) points to the argument that in a perfectly static world the necessity of making a decision would not be necessary due to the unchanging nature of both people and the environment, however, since the world is dynamic, numerous situations occur on a daily basis thus necessitating the need to make a decision.
This validates the assertions made by Chen-Bo (2011) which states that decision making is a dynamic reactive process.
Option
When it comes to the option stage of the decision making process, Stewart & Hess (2011) states that all decisions made are done within the context of options that are limited by an individual’s knowledge about a particular situation (Stewart & Hess, 2011).
This means that when making a decision it is usually the case that it is based on how an individual interprets the potential results of the action that will be undertaken through the lens of past experience or prior knowledge about the potential results.
Choice
The concept of choice occurs when an individual finally makes a decision based on the available information they have regarding the results of a decision.
Act
The action stage occurs when an individual either acts on a decision or chooses to relegate it to an opinion of choice. As such, this can have an external reaction or be purely an internal thought process.
Evaluation
The evaluation stage consists of a slight examination of the action that was conducted for future reference in order to ensure that a person either follows on through with a similar action in the future due to a positive result or does not go through with a particular decision due to a past negative reaction.
What must be understood though is that the 5 steps to the decision making process that have been elaborated on here are applicable only to logical decision making. Illogical or risky decision making follows a slightly different pattern, during the option stage where people base their decisions on past experiences or gathered knowledge what is also included is a reward/risk factor.
In this particular case a person would view a potentially risky action based on the perceived benefit (i.e. reward) they would get for choosing a particular decision versus the potential negative consequences. Should the potential benefits outweigh the negative consequences it is usually the case that a person would perform what is defined as a risky decision.
Examples of this can often be seen in the case of entrepreneurs wherein the decision to start their own business is based on the potential reward of having no boss and being successful versus the potentially disastrous financial implication associated with a failed business.
Another way of looking at the risky decision making is from the perspective of Mannberg (2012), in his study it was noted that risky decision making is at times the result of ill-informed choices wherein people make decisions based on faulty knowledge or an incomplete understanding of the full ramifications of a decision once it is made (Mannberg, 2012).
As such, while this does not fall under the normal risk/reward factor that is normally associated with risky decisions, it is still a relevant aspect when it comes to determining how people make risky decisions in the first place.
Decreasing Risky Decision Making
When it comes to decreasing decision making, it is stated by numerous articles on the subject that the primary source of the problem comes from the risk/reward factor that is at the heart of any risky decision. If the risk/reward factor is taken out of the picture then it is likely that people would reduce the amount of risky decisions that they would make.
Unfortunately, such a situation can only happen in an ideal world. People are at times have a predisposition towards making a risky decision if they believe that their version of the potential outcome to a decision is the right one. As such Ivers et al. (2000) recommends that in order to reduce this inherent predisposition it is necessary to insert the concept of doubt to the decision making process (Ivers et al., 2000).
This can be accomplished by adding a considerable amount of time between the option stage and the choice stage in the decision making process. Ivers et al. (2000) explains that the more time a person has to think about a particular decision, the more likely they are of ascertaining a better view on the risk reward factor and doubt their initial assumptions.
In fact Ivers et al. (2000) explains that people are more likely to commit risky decisions when deciding on the spot as compared to decisions that have been internalized and reviewed over a long period of time. Thus, Ivers et al. (2000) recommends that sufficient time be added in the option stage in order to reduce the potential for risky decisions to be made. Another factor that should be taken into consideration is the concept of anxiety.
Anxiety as described by Chiaburu et al. (2008) leads to the potential for risky decisions since people are being pressured into making a decision based on “getting things over with” rather than based on cool calm logic (Chiaburu et al., 2008).
As such, decisions made when an individual is anxious or stressed are likely to result in negative consequences since the person making the decisions is not doing so from a calm and centered position, rather, what is instead occurring is that they feel rushed, pressured and are attempting to merely make a decision for the sake of making a decision rather than doing so in order to produce a desirable outcome (Caruana, 2007).
It is based on this that it is recommended that prior to making any decisions it is important to first calm down and try to think properly. Only when a person is calm and well centered can they make a logical decision rather than one that is based on stressed and anxiety. The last recommendation when it comes to reducing risky decisions is to do so based on sound information (Borchardt, 2010).
As mentioned earlier within this paper, one of the main problems associated with risky decision making is that people often make a decision based on insufficient information resulting in them entering into a potential outcome that they did not initially expect.
As such, it is recommended that prior to making any decision it is important to get your facts straight in order to ensure that the outcomes to any decision are understood so that potentially risky decisions can be reduced.
Reference List
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Caruana, R. (2007). Morality and consumption: towards a multidisciplinary perspective. Journal Of Marketing Management, 23(3/4), 207-225.
Chen-Bo, Z. (2011). The Ethical Dangers of Deliberative Decision Making. Administrative Science Quarterly, 56(1), 1-25.
Chiaburu, D. S., Marinova, S. V., & Van Dyne, L. (2008). Should i do it or not? an initial model of cognitive processes predicting voice behaviors. Academy Of Management Annual Meeting Proceedings, 1-6.
Ivers, H., McGrath, P. J., Purdy, R., Hennigar, A. W., & Campbell, M. (2000). Decision Making in Migraine Patients Taking Sumatriptan: An Exploratory Study. Headache: The Journal Of Head & Face Pain, 40(2), 129-136.
Mannberg, A. (2012). Risk and rationalization—The role of affect and cognitive dissonance for sexual risk taking. European Economic Review, 56(6), 1325- 1337.
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