A decision is understood to be the choice of an action from at least two existing potential action alternatives, taking into account the overarching goals . Decision theory deals with the evaluation of the consequences of decisions .
In everyday life, decisions are made by natural persons who are called decision-makers. Decision-makers can make decisions for themselves (e.g. someone buys a book) or for organizations ( companies , authorities ). In the latter case meet executives as part of their leadership and other employees as part of their implementation competence decisions that work for or against their organization. This decision-making authority was expressly transferred to the decision-makers by delegation . Computers do not make decisions for themselves, only based on computer programs created by humans.
In everyday life, decision-making situations appear very often without being aware of them. The driver must decide whether the direction selected straight or turn right. The selection of one of these two alternative courses of action depends on the destination, so that even with this simple decision, the destination is in turn important for the selection of the correct alternative course of action. The driver has to decide at short notice, while a judge , for example , can take his time for the verdict until the date of the announcement during lengthy court proceedings . A decision can often be postponed until the latest possible point in time, with further information being received in the meantime and increasing the level of information. Information - its quantity and quality - are essential for making the right decisions. The level of information measures the imperfection of information:
Accordingly, perfect information is available at 100%, imperfect information between 0 and 100% and complete ignorance at 0%.
When deciding from several alternative courses of action, the one that turns out to be the best with regard to a goal is selected. These alternatives result from the preparation of the decision, for which the term planning is mostly used. Alternatives to action can generally consist of a specific action or omission . For example, if the purchasing manager in the company recognizes that a certain raw material has become too expensive in the short term, he will refrain from making a planned purchase; this is also a decision. Spontaneous , i.e. unplanned decisions (decisions) are not real decisions in the sense of decision theory.
The quality of deciding without delay and sticking to it is called decisiveness (see leadership or stubbornness ). In decision theory, statistics and economics deal with the question of the optimal decision. Etymologically , the verb “decide” comes from the Germanic word “skaipi” ( plural of “skeidir” for sword scabbard ) for two separate wooden panels that protect a sword . In Old High German this root word was further developed to “sceidan” and then to “intsceidôn” for “pull out of the sheath, separate”. The Middle High German word “decide” means “separate, separate, determine and judge a judgment”. The judges had to separate the statements and views from each other (“separate”) in order to arrive at the correct insight. In 1819, an etymological dictionary derived the word decision from the verb “divorce” because the decision-maker has to separate several alternatives.
Decision making process
Every decision is preceded by a decision-making process. It comprises the phases of diagnosis , goal setting , problem definition , information acquisition and evaluation, search for alternative courses of action, anticipation of desired and undesired consequences, prognosis of the consequences of this, handling of forecast uncertainty, evaluation and comparison of decision alternatives, implementation of the decision and implementation control. The decision maker recognizes the necessity of any decision (diagnosis) and then collects information and data relevant to the decision , which he successively filters and reduces in order to derive the alternative courses of action. This is followed by the phase of evaluating all the alternatives found, from which the choice is made in favor of a certain alternative course of action. This decision is finally enforced, the decision is implemented; the implementation control follows.
Decisions can be divided in relation to the subject of the decision:
|Subject of decision||Consequences||Affected, affected||example|
|Choice of an alternative course of action||Plot and its consequences||Things, things, people, tasks, instructions, orders||Decision to act by individuals, groups. Democratic societies or their legitimate representatives justify state action or decide to intervene in the same.|
|Opinion formation||An assessment is completed by the chosen opinion.||cognitive and social processes of opinion formation|
|Goal setting||Future decisions and actions are based on these goals.||Preferences of decision makers and those affected||Decision on strategic objectives, decision on a particular path and the associated efforts|
|Entering or ending a social relationship||Decision to change social relationships with an inherent change in future decision-making situations.||Social dynamism||Establishing, deepening and breaking off contact with other decision-makers with the formation of a dyad or group. Initiation of contact, acceptance of an offer, conclusion of a contract, entry or exit from a cooperation relationship|
|future decision-making process||Procedure definition||Organizations||Establishing procedures for decision-making procedures|
With regard to the certainty of results (expectation of occurrence) one differentiates:
- Decision with complete information : decision under certainty (“deterministic case”). The outcome of a decision is fully known in advance. The degree of information is exactly 100%, the probability of occurrence is known and is either 0 (impossible) or 1 (certain). A decision with complete information rarely occurs. One example is arbitrage , in which all the data relevant to the decision are known so that no discrepancies can be identified during the implementation control.
Decision in the event of imperfect information : Since in reality there is usually imperfect information about the future , these decisions are the rule. The degree of information is <100%.
- A decision under uncertainty exists when the decision can be assigned several possible outcomes that can occur with certain probabilities . There is incomplete information about the probabilities of occurrence and the environmental conditions .
- Decision making under risk : The decision maker has knowledge of subjective ( estimates , experience or assumptions ) and objective ( historical data with frequency distributions such as mortality tables , statistics ) probability of occurrence. The probability distribution is known; expected values can be calculated for the alternative courses of action . Most economic decisions in companies (such as the investment or credit decision ) fall into this category. Some of the specialist literature assumes that there are mostly only subjective probabilities of occurrence, although there are mostly objective probabilities of occurrence in large numbers.
- Decision under uncertainty : The probability distribution of possible future environmental conditions is unknown, no probabilities of occurrence can be assigned. However, it can be assumed that one of several anticipated results of an alternative course of action will arise. They do not represent economic decisions, but occur in game situations ( dice games , lottery ).
- A decision under uncertainty exists when the decision can be assigned several possible outcomes that can occur with certain probabilities . There is incomplete information about the probabilities of occurrence and the environmental conditions .
In the literature, there are sometimes other classifications and classifications. Erich Gutenberg differentiated between decisions under security, under risk and under uncertainty.
With regard to the person of the decision maker, a distinction is made between self and external decisions. According to Erich Kosiol, the overriding of the decision-making task over the implementation task requires a separation of the deciding and executing person and leads to an external decision . If decision-making and execution tasks are combined in one person, this is a self- decision . Self-decisions have a greater scope for decision-making and are typical of decentralized companies. External decisions are often based on decision templates that are passed on to the decision maker from another body . Personal and external decisions are sometimes also seen in terms of influenceability. From a company's point of view , internal decisions are made by the company's employees , while external decisions are made by customers , suppliers or competitors . External decisions are to be taken into account when making your own decisions.
From the point of view of the importance or urgency of reasons for making decisions, there are constitutive ones. operational and situational decisions . "Constitutive decisions are all decisions that represent a fundamental definition of the basic operation of the company". In addition to the investment decisions, they are among the long-term binding decisions. The constitutive decisions include the establishment of a company , choice of business purpose , choice of location , choice of legal form or company connections . Short-term binding decisions are operational decisions ("decisions in day-to-day business"), particularly in the operational functions of procurement , production , sales , financing and the cross-sectional or service functions of corporate management , human resources , administration , information , research and development and logistics . Situational decisions are often made ad hoc under time pressure , such as the urgent and urgent procurement of a spare part to prevent an impending breakdown .
According to the period of effect, a distinction is made between operational (short-term), tactical (medium-term) and strategic decisions with long-term effects. An operational decision is made when the decision-maker concludes, for example, a foreign exchange spot transaction with his house bank , a tactical decision is the balance sheet cosmetics within the framework of the balance sheet policy , while decisions about an expansion investment are strategic in nature.
With regard to the subject of the decision, a distinction can be made between
- Action decision : Choice of two or more alternative courses of action,
- Target decision : Determination of one or more targets which should be decisive for further action decisions ,
- Relationship decision: establishing or breaking off contact, entering into social relationships and creating and maintaining them, ties or contracts
- Design decision : choice of framework conditions, norms or rules, which should be binding for further social interaction .
From a cybernetic perspective , the decisions of a system (or an entity ) form a discrete-time control cycle in which the system interacts with the system environment. The same decision can e.g. B. be hit several times or over and over again (e.g. am I leaving a mediocre party or will I stay?). In this context, it is also important to ask whether a decision can be made unconsciously and who or what has the ability to make a decision.
In a broad sense, a decision does not necessarily require awareness , just as the decisive entity does not necessarily have to be a human being. A living being or a machine, a technical device or a plant can make decisions. Software is to be understood here as a programmed automaton and virtual machine that makes decisions at high frequency.
An amoeba decides whether to move towards or away from a source of stimulus, and a heating control switches on the burner when the thermostat measures a temperature below the lower threshold value. In practically every software there are conditional instructions which, based on a logical expression, decide for one of two alternative subsequent instructions.
Human decisions, too, are often unconsciously and instinctively automated . A person meets i. d. Usually thousands of decisions every day, without thinking too long, which are often made in fractions of a second ( spontaneous purchase ). According to the cyberneticist Heinz von Foerster , however, humans have a special decision-making area: " We can only decide those questions that are fundamentally undecidable ."
Most computer programs are used to support human decision-making. But there are also programs that make autonomous decisions on which our lives can depend (example: ABS brakes ). However, awareness and the ability to will appear to be the prerequisites for complex decisions. Different complex decision-making processes run in different social sub-systems such as politics, companies and media, which are characteristic of these sub-systems and whose goals are often not all transparent.
In scientific analysis, the decision-making process usually turns out to be multi-stage. Basically, human behavior results from a sequence of decisions every fraction of a second or minute. He can make them consciously or unconsciously, immediately or in the form of a lengthy weighing process, they can result in activity or passivity, and can be assessed as right or wrong . As an alternative, the brain can only use information that has been learned and stored in the memory. In addition, there is the influence of numerous unconscious factors: moods, physical well-being, experiences.
Each individual decision can be viewed as a process of weighing up the neural networks of the brain. The “weighting” of the arguments takes place (on the neuroscientific level) through biochemical or bioelectrical processes. On the neurological level, António Damásio pointed out that humans assign a kind of somatic marker to every concept and every memory , through which heterogeneous information can be processed into a decision more quickly.
In everyday life, the emotional markers automatically give preference to advantageous (mostly egoistic) arguments and help avoid dangers. It is an evolutionarily very old function that offers every animal with sufficient brain capacity decisive survival advantages. (Memory and almond kernels are necessary.) People prefer to use this evaluation function for unconscious or spontaneous reactions “from the gut”. Personal experiences are therefore mapped in the emotional markers. Intuition grows from this (life) experience .
With the transition from the 19th to the 20th century, the concept of decision gained philosophical importance. With the theory of evolution, the foothills of secularization and the triumphant advance of the natural sciences, the established theological guidelines for action and decision-making dissolved and shifted the role of man in the world. As a result of the changed position of his historical existence, the existentials were raised anew: Does man have a higher authority (transcendent, divine, metaphysical) or is he himself the highest and only in the world. In the first case, all decisions would be reserved to this higher authority, in the second case, the person would be responsible for all decisions. These questions were answered in different ways and range from Max Weber's theory of charismatic decision-making via the anthropologies of Arnold Gehlen , Helmuth Plessner or Karl Jaspers to the existentialism of Søren Kierkegaard or Jean-Paul Sartre .
Especially through the work of Carl Schmitt on decisionism , the theory of decision was strongly politicized, since Schmitt established a close connection between decision and exception . This found its way into political reality with his 1934 essay "The Führer Protects Law". This historical legacy charged the theoretical work on the concept of decision with an existential and political explosiveness and made it a theoretical and political battle concept:
One cannot deny that there are terms that are dangerous because they are not eo ipso protected against abuse. Their sharpness, which makes them useful, is then from the innocence of the weapons. The concept of decision is useful and even indispensable.
In terms of analysis and the history of ideas, the philosophical concept of decision is related to the concept of charisma , positivism and decisionism. Since the 1990s, the concept of decision has been rehabilitated bit by bit. For example, Stefan Gosepath identified it as a prerequisite for rationalism:
Reason cannot be justified by itself. A rationalistic attitude is characterized by the fact that it attaches great importance to justifiability. But this rationalistic attitude cannot be justified itself, because only people who are ready to listen to reasons, i.e. who are already rational, will accept a rational argumentation. The rationalist attitude must first be adopted before reasons can be given meaningfully. [...] The rationalistic attitude is ultimately an unfounded belief in reason. One cannot justify the use of reason, but only educate it. […] One might think that the admission of a decisionist component… would contradict the radical claim to justification of rationalism. [...] Decisionism in no way contradicts the principle of autonomy or rationalism.
For important decisions, people also use rational (intellectual) information, the objective or assumed meaning of which they can compare virtually in their “imagination space”. This also includes everything that was taught to him with enough urgency: ethical commandments, laws of all kinds, including admonitions to altruism . For the comparison he uses his so-called short-term memory, a function with which he can present two or a few pieces of information more or less simultaneously in the “imagination space” and on which he can then concentrate (time, imagination, good short-term memory, good information are good prerequisites).
In the case of important problems, the decision-making process takes place in two stages according to today's teaching. In a first step, the goal is defined (see figure on the right): The specifications that trigger the process (cause of the basic plan of action) are provided with alternatives using the intelligence function (search function). They have a rational meaning (weight) for the decision, but are also linked to judgmental emotional markers. As an example, assume that someone receives an invitation to go on a mountain hike and now wants to decide whether to take part. In the memory of the brain, the intelligence immediately finds affirmative arguments such as memories of previous corresponding undertakings or enthusiastic descriptions of others. The current weather report and the problem of suitable footwear may speak against this. Alternatives for a possibly more sensible use of the day should be the memory of the appointment calendar or the guilty conscience of social obligations that have not been completed. The brain's memory stores contain a multitude of positive and negative arguments, the most impressive of which “shoot through the head” of a person, that is, they become aware of, but many of which only unconsciously add a certain (mostly emotional) accent.
Important components of the weighing process are, of course, discussions about risk (achievement of goals) or personal worth, on which alone there is a wealth of scientific work (e.g. by John William Atkinson). Furthermore, countless historical information such as the drastic admonition of the grandmother or a film about the dangers of the mountains can gain influence with incalculable intensity. Unconscious innate motivations such as the urge to move, curiosity or strong affection for a member of the wandering group always have an impact, and on the other hand, current physical sensitivities (tiredness, headache) always have their weight in the decision. The result of all considerations can be general approval. With this “Rubicon decision” (an “intention” according to Heinz Heckhausen) the individual has generated a goal. Many causes have influenced and ultimately “ determined ” the goal .
In a second step, a decision is made about the type of implementation. In the above example: How long, what clothing, what provisions, what domestic organizational planning must be done? By the time this second decision is made, according to Udo Rudolph, the strength of will that counteracts doubts, concerns, temptations, etc. Ä. Shields. This will becomes assertive when, after the second decision (on the type of implementation), the decision to go hiking is made. Willingness and assertiveness vary depending on the nature of the individual, but they now help to overcome new resistance or to ignore distractions. Diverse scientific studies also exist for this phase. In this scientific explanation of “will formation” there is no free will that is not subject to causality .
The decision-making process from a general psychological point of view
The decision-making process described above can also be represented with the help of a framework model. This is not a theory because the model neither explains nor predicts decisions. However, it is possible to classify theories and phenomena in it. In the model, a distinction is made between the three decision phases preselective phase, selective phase and post-selective phase, with the actual decision taking place in the selective phase.
These phases are explained in more detail below to provide an overview of the decision-making process.
This phase is the beginning of the decision-making process and comes before the actual decision, because in the preselectional phase the various options are generated and information relevant to the decision is sought. In addition, the basic identification of the decision-making situation takes place in this phase.
In everyday decisions it cannot be assumed that all options and consequences are known to one, and therefore, according to Herbert A. Simon , one has to refrain from the rational decision rule (maximization rule) of utility theory . He relies on the behavior model. This model is based on the limited rationality of humans. Limited rationality is a model of human decision-making by Simon, which shows that people are able to make their decisions in such a way that in the end there is a very good result despite the limited information and processing capacity, as well as other factors. The reason for this lies in a sequence of processes, including the use of simple decision-making strategies. These decision-making strategies include:
- analytical strategy: the decision is made on the basis of weighing options and their consequences.
- non-analytical strategy: the decision is made based on other variables unrelated to the options and their consequences.
- compensatory strategy: various consequences of an option are first evaluated so that a balance can be found between positive and negative effects within an option. The next option is then evaluated using this procedure.
- Non-compensatory strategy: various options are compared with one another in individual forms. This eliminates the need for balancing the compensatory strategy.
How a decision is ultimately made depends on the situation and is usually the result of different strategies for obtaining information.
In this phase the actual decision is made as to why the given information must first be viewed and an assessment made. The lottery paradigm is mostly used to examine this decision-making process. This is an investigation method in which the options, their values and consequences, as well as the probabilities are specified and the test subject must decide with the help of this information. No information search is therefore necessary.
Benefit theory is used to explain and predict the results of assessments and decisions . This was axiomatized in order to work out the principles of rational decision-making precisely.
The four central principles of rational decision-making are:
- Principle of complete order: a comparability of the options and a transitive order are assumed.
- Principle of independence: the choice of an option should be independent of a consequence that is the same for all options ( cancellation principle ).
- Principle of dominance: this is at the center of the decision rule of utility theory, since an option that has a lower utility should not be preferred to an option with a higher utility.
- Principle of invariance: the representation of the options must not have any influence on the decision.
Research by Slovic, Fischhoff, and Lichtenstein, however, showed that people tend to violate these principles. This is illustrated below:
- The principle of complete order is violated when intransitive preferences occur. This was determined using the pair comparison method .
- The violation of the principle of independence is described by the Allais paradox . Here, a test person makes different decisions in two decision situations, although the consequences are identical.
- If the consequences are only partially considered, the principle of dominance is usually violated, as some important consequences can be overlooked. However, this principle can also be violated when viewed in full.
- The principle of invariance is endangered by so-called framing . Framing is understood as changing a representation that does not change anything in the option itself and its consequences (e.g. through linguistic means ). A distinction is made between profit framing and loss framing. In the case of profit framing, the choice falls on the safe option and the risk is avoided, whereas in the case of loss framing the test person chooses the unsafe option and thereby seeks the risk.
The criticism for the utility theory approach is understandable due to the large amount of information required (options, consequences, values and probabilities) for achieving the highest expected utility. It is therefore a restricted area of application, since in everyday life the options and the consequences usually have to be looked for yourself.
The final decision evaluation takes place in this phase.
All of our decisions are often followed by consequences that have an impact on our environment, from which we then receive feedback. The consequences of our decisions, which represent the feedback, have an impact on future decisions. The success of a decision can be measured at a later point in time on the basis of the effectively effected consequences of the decision. The decision quality (quality) can u. a. be measured by how well the effects of the decision come close to the desired goal and expand or narrow boundary conditions . The following decisions can be learned from the retrospective evaluation of the quality of the decision. An intelligent system or individual can basically learn from past actions and behavior and then come to targeted decisions. The effect law shows that the positive consequences of a decision make people repeat this decision and, in contrast, negative consequences mean that a decision in this regard is avoided or reconsidered in the future. Therefore, a decision always has a past and a future. It must be taken into account that the environmental factors and mechanisms of action that determine the decision-making situation and the consequences following the decision always change somewhat.
It is possible to fall back on a routine that has already been established for repetitive decisions . Learning effects (experiences) derived from the past can only improve decision-making behavior if the current decision-making situation is comparable with previous situations. In the event of a repeated decision, you can choose the already known option or you can choose a new option whose outcome is still unknown. The risk that new information will not be taken into account in the event of such a repeated decision, with the possibility of resorting to already routine procedures, is very high. In order for routines to be abandoned, there must have been frequent negative feedback and even then there is the possibility of a relapse error. Routines can be rated positively and negatively: a positive effect is the supposedly more effective use of cognitive resources. The one-sided search for information to support the chosen hypothesis, the so-called confirmation error, is to be assessed negatively .
It is also crucial to take enough time for the reflection process and the ability to reflect or to get reflection from others. The other point of view of others is important in order to compensate for one's own distortion of perception , to recognize irritations in order to come as close as possible to reality.
Especially after important decisions, people often have to do with what is known as cognitive dissonance . What this means is that every option has positive and negative consequences. After the decision one is then in a conflict, since the negative consequences of the chosen option with the positive consequences of the not chosen option are dissonant to the decision. This phenomenon is also the reason why decisions are often revalued in retrospect - in this way the decision-maker tries to free himself from this tension construct.
The influence of feelings on decisions
People make decisions every day. Most of them, the everyday decisions, are made more routinely and automatically: What am I wearing today? What do i cook What do i buy? They are of a subordinate nature in relation to major “life decisions”. These existential decisions are more difficult for us because they do not have to be made daily and therefore experience and routine are lacking. They concern, for example, the question of changing jobs or family planning . They have a significant impact on our lives. Fears, a lack of self-confidence or the comparison of gut feelings with logic and facts therefore play a role in these decisions. In other words: the fear of making the wrong decision and the possible consequences that could result from it. This is not just about individual self-confidence . It is crucial for whether and for how long we hesitate to make a decision, how long we should deal with it, should it turn out to be a bad one and the handling of it that follows. The feelings associated with the future scenarios and the possible consequences of the decision to be made play an equally important role . Because decisions can always have consequences, in a positive as well as a negative sense.
Feelings - or emotions - are sensations that are partly innate - basic feelings - or are shaped by experiences. These different or differently made experiences are sometimes the reason why the ability to make a decision or to make a decision is correspondingly different in each individual. Basically, every decision is also influenced by our feelings, as these are based on the experiences we have already made. Every event, every experience, no matter whether positive or negative, we have stored together with the corresponding feeling. When a new decision has to be made, these feelings are called up and images of possible future scenarios are displayed. This creates a tendency that leads to a decision. This process has an effect that greatly simplifies our lives and is largely subconscious , as our brain accesses this already stored data. Actions and events are assessed positively or negatively, depending on the experience or situation.
When making a logical decision, feelings are largely hidden in order to use only rational, sometimes even mathematical methods of decision-making. In contrast, emotional decisions can involve logic to some extent, yet their main driving force is emotion. This outweighs logic. In other cases some kind of pseudo-logic is used to reinforce or support an emotional decision. In addition, an emotional decision that is started with logic can also use the emotion for the final decision.
The intuition is based on knowledge , which is drawn from experience; but it justifies a decision subconsciously. According to Isen and colleagues, the mood effects of people can be justified with the aim of maintaining a good mood and avoiding a bad mood. Weak feelings also have an influence on the decision-making process, even if they are not directly related to the initial problem.
Also moods and emotions are emotions and thus also of opinion and Entscheidungsbildner. While affects are short-lived but high in intensity, the opposite is true for moods. Here the intensity is lower, but they last longer. Moods and affects are of little objectivity because they appear immediately and do not take logic and facts into account.
Feelings in Approaches to Decision Research
In decision research there are four different approaches to the roles of feelings: feelings as epiphenomena of decision-making, feelings as process determinants, feelings as decision criteria of the cognitively mediating influence, and feelings as decision criteria of direct influence.
In the first approach, one speaks of feelings as so-called epiphenomena of decision-making. From the point of view of the rational perspective, one understands the feelings as a by-product, an accompanying phenomenon without any intrinsic effect: it has no effect on its own, occurs in certain contexts. As a supposed accompanying phenomenon, the feelings are not allowed to have any causal influence on the decision-making process.
Feelings as process determinants describe the second approach to decision research. This approach determines how the process of decision-making is influenced by feelings . Feelings can play a meaningful role in action control. The organism is informed about changes in the internal and external environment through feelings. On the one hand, the negative feelings control attention and at the same time motivate the individual to deal with new and urgent tasks. Feelings can interrupt decision-making tasks and influence the processing of new tasks. Negative feelings include disappointment - e.g. when For example, the desired result of a decision that was once made has not materialized - or regret - if you have the feeling that you have made the supposedly "worse choice" out of two options.
Cognitively mediating influence
The third approach includes the decision criterion as a cognitive mediating influence. It is not the feeling that matters here, but the cognitive representation of the feeling in the specific situation. Through a certain repertoire of experience, people learn that consequences can lead to certain emotions. Feelings teach us experience from certain situations. Emotions can be anticipated and used as a decision criterion for future decisions. The strength of the emotions is often overestimated or underestimated.
The last approach is the direct influence that emotions can have as a decision criterion. This starting point has only been relevant in decision research for a few years. It says that feelings are the central determinants of decisions. Thus, feelings have a direct influence on our decisions.
Neuroscientific view of feelings in decision-making processes
The neuroscientist António Damásio , University of Southern California , interprets the prefrontal cortex as a kind of " mediator " between feeling and mind and takes the view that the prefrontal cortex connects the feeling region of the limbic system with the rational considerations of the cerebral cortex .
António Damásio worked a. a. also with examinations on patients with damage in the area of the orbitofrontal cortex, which is assigned an important role in conveying feelings in the decision-making process. Even if the limbic system is primarily responsible for the development of feelings, patients with damage to the orbitofrontal cortex have severe deficits in emotional experience and massive problems in planning action and making decisions.
For Damásio it is clear that decisions need emotional impulses: Man cannot act out of pure intellect.
Further individual aspects
The decision is made by one or more decision-makers who are authorized to make the decision . A decision is always shaped by the subjective foundations of the decision maker, by their preferences , feelings , likes , dislikes , values , experiences and willingness to take risks ( risk aversion or risk affinity ). Because of these influences, a decision is usually only subject to a limited rationality ( English Bounded Rationality ). A decision has planned, but often unexpected consequences , for which the question arises as to how far this responsibility should be borne by the decision-makers.
Decision parameters ( exogenous and endogenous ) are those variables that influence a decision, but are viewed as independent of it. The decision itself is an action parameter , but the decision-maker must also take into account reactions in the company and the environment outside the company as reaction parameters when selecting the best alternative (external decisions). He must also - at least in the short term - include variables ( data parameters ) that cannot be influenced by the decision made .
Information cost and information value
In order to be able to make the right decisions, the decision maker needs information and data that are relevant to the decision. Their procurement can trigger information costs that increase a company's total costs . The decision-maker must now weigh up which and how much information he needs and whether the costs are reasonable in terms of the information benefit. The use of information is understood to mean the change in the degree of target achievement that can be brought about by taking additional information into account when making a decision.
The consequences of the decision determine the consequences and effects of a decision, whether it can be reversed or changed, or whether it is irrevocable. Often a decision by changing the situation leads to the need for follow-up decisions. Decisions that have normative and long-term consequences and affect different human communities are particularly important, e.g. B. Political decisions.
Acceptance and contestation of a decision
In a social, societal and political context, not only the decision-makers but also other people are often affected by the consequences of a decision. These have only a limited or no influence on the decision-making process. Nevertheless, it is important for the cohesion of the groups and the stability of the social order that at least a majority of those affected accept a decision and its consequences. Without acceptance of a decision and the decision-maker (s), criticism , protests , arguments or strikes often arise . In modern society , the individual's freedom of decision and action are therefore limited by the state legal system . Just as the decision-makers have to legitimize themselves for some decisions, the opponent of a decision often also has to legitimize himself for the contestation.
In microeconomics , the human image of the rational decision-maker ( Latin Homo Oeconomicus ) is designed, who is clearly aware of his preferences and tries to maximize his benefit with every decision . However, the rational decision theory has been criticized for its assumptions. As a rule, economic agents do not have complete information about all of the factors that are potentially relevant for decision-making.
The theory of limited rational decisions extends the model framework here by including these incompleteness in knowledge and information processing. In addition to self-interest, decisions can also be determined by other value systems such as altruism , ethical values or emotions . As a result, decisions are often controversial, as everyone uses different assumptions to support the remaining uncertainty.
The most important rule for making decisions is that the smaller the uncertainty , the easier it is to make a decision - every decision is easier when there is more information about the need to make a decision.
In decision theory , methods such as For example, the simple utility value analysis (NWA) or the more precise Analytic Hierarchy Process (AHP) are used, in which criteria in the sense of points of view and alternatives in the sense of proposed solutions are found, presented, compared and evaluated in order to find the optimal solution to a decision or problem to find. The Holacracy system provides a favorable structure for decision-making in large networks and multi-layered companies (with the desired transparency and participatory participation options across all levels) .
In medicine, a doctor decides in a diagnosis based on the symptoms present for one of several possible diseases and bases the treatment on this diagnosis decision . The diagnosis decision here often has the character of a hypothesis . If the patient does not respond to the treatment, other hypotheses must be checked and, if necessary, the diagnosis decision revised.
Psychodiagnostic decision making
As an advisory activity, psychology is dependent on well-founded diagnostic decision-making (e.g. with regard to educational pathways, career choice, personnel selection, therapeutic indication). Psychological diagnostics is the discipline of using findings from the individual sub-disciplines of psychology for this decision-making (indication diagnostics ).
Sport and Justice
A decision is the result of a price comparison of the advantages and disadvantages of the respective option versus its alternatives. An indecision results from recognized ignorance or lack of clarity about the consequences of the favored option (a price that cannot be determined). Weakness in decision-making results from the unconscious rejection of the disadvantages associated with the solution. Avoiding a decision means letting others decide, such as not participating in an election. Not making a decision is already the decision to transfer the decision to someone else.
Operational decisions can be systematized using the following criteria.
- Scope : It is based on where an operational decision has an impact. This is the case in the operational functional areas of procurement, production, sales and financing as well as in the cross-sectional or service functions of corporate management, human resources, administration, information, research and development and logistics.
- Rank of decisions : there are goal and means decisions . The objective decisions lay the tangible goals and formal objectives fixed, means decisions determine, however, how the goals are to be realized.
- Number of decision-makers : Individual decisions are made by a single decision-maker, collective decisions are made in teams by majority or unanimously.
- Decision-making risk: The highest risk is inherent in the constitutive external decisions under uncertainty , the lowest in situational self- decisions under complete information (pure arithmetic or intellectual tasks). Erich Gutenberg identified the “real management decisions” from the use of some of these decision criteria, i.e. those decisions that are to be made by the top management bodies ( board of directors , management ) and cannot be delegated . An essential criterion of the management is the making of external decisions, their implementation in orders and the external control of the execution.
A wrong decision is based on inaccurate data (incorrect or insufficient information) or on the decision-makers' thinking and calculation errors when evaluating the data and making the decision. Erich Gutenberg assumed in 1962 that "incompleteness and inadequacies of information increase the risk of wrong decisions and failures". In addition to other costs and damage , it causes friction costs . These are opportunity costs of bad decisions that are based on unavailable or qualitatively inadequate information and could have been prevented by a standard deployment. Makers are keen to avoid wrong decisions because they can therefore because of their responsibility for accountability are drawn.
The specialist literature differentiates between wrong decisions of the first and second kind. A wrong decision of the first kind occurs when a company makes an expansion investment whose potential for success is classified as low. A wrong decision of the second kind is spoken if an expansion of the capacities is promising, but corresponding expansion investments are not made.
- Prospect Theory
- Fundamental option
- Social choice theory
- Decisionism (legal philosophy)
- Difference , distinction , equality , characteristic
- Value analysis
- Crisis Intelligence as crisis prevention in decision-making processes
- Game theory (a branch of mathematics in which decision-making situations are modeled)
- Decision-making mechanism
- Business and Sociologically
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