Individual differences


Decision making in practice is characterized by bounded rationality, common human biases and errors, and the use of intuition. In addition, there are individual differences that create deviations from the rational model. In this article, we look at two individual-differences variables: decision styles and gender. In this article we are deliberating up on decision styles only as it is more concerned with working environment.

Decision Styles:

If Jack and Mack are put into the same decision making situation and Jack almost always seems to take longer to come to a solution. Jack’s final choices aren’t necessarily always better than Mack’s. He is just slower in processing information. In addition, if there’s an obvious risk dimension in the decision, Mack seems to consistently prefer a riskier option than does Jack. This illustrates is that all of us bring our individual style to the decisions we make.

Research on decision styles has identified four different individual approaches to making decisions. This model was designated to be used by managers and aspiring managers, but its general framework can be used by any individual decision marker.

The basic foundation of the model is the recognition that people differ along dimensions. The first is their way of thinking. Some people are logical and rational. They process information serially. In contrast, some people intuitive and creative. They perceive things as a whole. The other dimension addresses a person’s tolerance for ambiguity. Some people have a high need to structure information in ways that minimize ambiguity, while others are able to process many thoughts at the same time. When these two dimensions are diagrammed, they form four styles of decision making. They are: directive, analytic, conceptual and behavioral.

People using the directive style have a low tolerance for ambiguity and seek rationality. They are efficient and logical, but their efficiency concerns result in decisions made with minimal information and with few alternatives. Directive types make decisions fast and they focus on the short run.

The analytic type has a much greater tolerance for ambiguity than do directive decision makers. This leads to the desire for more information and consideration of more alternatives than is true for directives. Analytic managers would be best characterized as careful decision makers with the ability to adapt to or cope up with novel and unexpected situations.

Individuals with a conceptual style tend to use data from multiple sources and consider many alternatives. Their focus is long range, and they are very good at finding creative solutions to problems.

The final category— the behavioral style—characteristics decision makers who have a strong concern for the people in the organization and their development. They’re concerned with the wellbeing of their subordinates and are receptive to suggestions from others. They tend to focus on the short term and to downplay the use of data in their decision making. This type of manager tries to avoid conflict and seeks acceptance.

Although these four categories are distinct, most managers have characteristics that fall into more than one. It’s probably best to think in terms of a manager’s dominant style and his or her backup styles. Some managers rely almost exclusively on their dominant style; however, more flexible managers can make shifts depending on the situation.

IIM business students, lower-level managers, and top executive tend to score highest in the analytic style. That’s not surprising given the emphasis that formal education, particularly business education, gives to developing rational thinking. For instance, courses in accounting, statistics, and finance all stress rational analysis. In contrast, evidence indicates that managers in China and Japan tend to rely more on directive and behavioral styles, respectively. This may be explained by the Chinese emphasis on maintaining social order and the Japanese’s strong sense of collectivism in the workplace.

Focusing on decision styles can be useful for helping you to understand how two equally intelligent people, with access to the same information, can differ in the ways they approach decisions and the final choices they make. It can also help to understand how individuals from different cultures might approach a decision problem.