What is decision making? 10 types explained

What is decision making? 10 types explained - Image by pch.vector on Freepik

Decision making is the process of selecting the best option from a set of available alternatives. It involves identifying the problem, generating potential solutions, evaluating them, and deciding on the best course of action. Decision making is a critical skill for both personal and professional success.

Good decision making is a skill that can be acquired, developed, and perfected over time with experience. It is an essential part of both our business and personal lives. An individual’s ability to make wise decisions will increase their chances of success in both business and personal life.

10 types of decision making

1. Ethical decision making 

Ethical decision making is a process in which an individual or group considers the ethical implications of their decisions. It is essential for businesses and other organizations, as it helps ensure that decisions are made with consideration for how they will affect the people involved.

Ethical decision making
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To make ethical choices, one must consider each option’s potential consequences and consider any legal requirements that may apply. Additionally, it is essential to consider if the chosen action respects the rights of all parties involved and does not breach any laws or regulations.

At its core, ethical decision making relies on weighing moral principles against practical considerations. It involves understanding what values should be upheld in a particular situation and assessing how different actions might impact those values. Evaluating alternatives through this lens requires careful thought and analysis to determine which course of action best serves both moral interests and practical needs.

2. Data-driven decision making 

Data-driven decision making is a powerful tool used by organizations to make optimized decisions based on data. It is a structured process using empirical evidence and data analysis to inform decision-making.

Data-driven decision making 
Data-driven decision making – Image by vector4stock on Freepik

Data-driven decision making allows organizations to make decisions with greater confidence, accuracy, and speed as compared to traditional methods of making decisions. This method will enable businesses to identify new opportunities, reduce risks, and improve their performance.

The basis of data-driven decision making lies in using empirical data sourced from internal sources such as company databases or external sources like market research studies. This data type offers valuable insights into key factors such as customer behavior, purchasing patterns, or market trends that can help guide decision-making.

As a result, businesses can make smarter and more informed decisions which will ultimately impact their bottom line.

3. Rational decision making 

Decision making is an integral part of everyday life. It is the process of selecting one option from a set of alternatives to reach a desired outcome. Rational decision making takes this concept one step further by incorporating logical and systematic problem-solving techniques rather than relying on instinct or guesswork.

Rational decision making
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When using rational decision making, individuals consider all available information and consider the potential outcomes for each option before settling on the best choice for their particular situation.

Rational decision making requires that people use various analytical tools to identify potential risks and weigh them against potential rewards. It also involves examining external factors such as market changes, trends, regulations, and industry standards when analyzing data to make informed decisions based on what’s best for the company or individual.

4. Strategic decision making 

Strategic decision making is the process of gathering information, analyzing it, and developing a plan of action to address an issue or solve a problem. It’s an essential set of skills for any business leader to possess to be successful.

Strategic decision making 
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Strategic decision making involves taking into account both short-term and long-term objectives and the current environment in which the decisions will be made. It also requires careful consideration of the resources available, financial constraints, legal requirements, and potential risks associated with the proposed solution.

There are several types of strategic decision making models which can help guide leaders through this complex process. For example, strategic planning models such as SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis provide key insights into an organization’s current situation.

5. Group decision making 

Group decision making is the process of agreeing with a group of individuals, often within a business setting. Organizations use it to ensure that decisions are made with input from all team members and stakeholders. When done effectively, it can result in more creative solutions and better outcomes for everyone involved.

Group decision making
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Through group decision making processes, teams can leverage their collective knowledge and experience to problem-solve issues, develop policies, or make other important decisions. This approach encourages different perspectives and ideas, which may lead to more innovative solutions than those generated by a single person.

Additionally, it allows team members to take ownership of the decisions they reach together since they were part of the process from start to finish.

6. Intuitive decision making 

Intuitive decision making is an essential type of decision-making that people use in both their personal and professional life. It relies upon an individual’s experience and gut feelings to make decisions quickly and effectively.

Intuitive decision making 
Intuitive decision making – Image by vectorjuice on Freepik

This decision-making depends on accumulating and analyzing prior experiences rather than a logical approach. As such, it is often seen as more emotionally driven than rational or systematic decision making.

Intuition allows people to rely on their knowledge base when faced with complex problems or decisions that need quick resolution. In contrast to rational or systematic decision making, intuition can be used to conclude when there may not be enough time for a thorough analysis process.

It can also bring creativity into the thought process, allowing decisions to be made from a broader perspective than traditional methods offer.

7. Consensus decision making 

Consensus decision making is a type of decision-making process that requires agreement among all participants to resolve. This method of decision making can provide greater motivation for group members to accept and support the final decision since it has been reached through collaboration and negotiation.

Consensus decision making
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It is especially useful when the group has diverse opinions and interests, as it gives everyone an equal voice in the outcome.

When engaging in consensus decision making, each participant should participate in open dialogue to discuss their ideas and perspectives on reaching a solution.

All parties should be able to express their views without feeling pressure or fear of judgment. Once every perspective is heard, the group can work together towards finding common ground and coming up with solutions that they can all agree upon.

8. Heuristic decision making 

Heuristic decision making is a type of decision-making process that involves using past experiences or instincts to make decisions in the present. It is a cognitive process that relies on experience and intuition to come up with solutions rather than relying on a predefined set of criteria.

Heuristic decision making
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Heuristics are often used when there may be too much information to analyze and insufficient time to assess it all – rendering traditional decision-making strategies ineffective. Heuristic decision making can be divided into two categories: intuitive heuristics and algorithmic heuristics.

Intuitive heuristics involve relying on instinctive judgments or gut reactions when making decisions, while algorithmic heuristics involve depending on rules of thumb or algorithms for problem-solving.

9. Behavioral decision making 

Behavioral decision making is a term used to describe the process of making decisions, often using cognitive processes and behavioral patterns. It can involve decision-making based on past experiences and observations and rational and logical thinking.

Behavioral decision making
Behavioral decision making  – Image by pch.vector on Freepik

This type of decision-making involves conscious and unconscious thought processes, which are combined to reach a conclusion or action.

The key elements of behavioral decision making include information gathering, data analysis, risk assessment, problem identification, brainstorming strategies for action selection, evaluating potential outcomes, and implementing decisions.

Understanding how each element works is essential to make effective decisions that result in positive consequences. In addition, recognizing when biases or emotions may be influencing our decisions can help us avoid costly mistakes in the future.

10. Participative decision making 

Participative decision making is a type of decision making process that involves the participation and collaboration of multiple stakeholders. This method of decision making is based on the idea that everyone should have an equal voice in decisions affecting them.

Participative decision making
Participative decision making – Image by vector4stock on Freepik

It encourages dialogue, consultation, and discussion among stakeholders to develop various solutions, many of which are considered before a final decision is reached. Through participative decision making, all parties involved can better understand the issue at hand and take ownership of any proposed solutions.

The advantages of participative decision making include increased acceptance from those affected by the result, improved problem-solving abilities, better quality solutions due to broader input from stakeholders, and strengthened relationships between participants as they work together towards common goals.

Additionally, it allows multiple perspectives to be considered when developing plans for the future course of action, which can help identify potential risks early on in the process.


In conclusion, decision making is a necessary part of life and can take many forms. Awareness of the 10 types of decision making can help individuals make better decisions, understand the process better, and enjoy the benefits of making the right choices. Ethical, rational, creative, strategic, and intuitive decision making are all essential for different situations. Recognizing when one type may be more appropriate for any given situation is critical.