Decision-making Styles

Understanding the management style of decision making provides an opportunity for better
understanding of managers themselves, their decision-making, problem solving, and interactions with
other people in the organization. Despite the different approaches to the definition of decision-making
styles in scientific literature, in terms of criteria, dimensions and terminology, the basic division is in the
autocratic and democratic style of decision-making.

In this sense, the styles of decision-making move between one extreme represented by an autocratic style
and the other represented by a democratic style, and the choice of style depends on the characteristics
of the decision-maker, his associates and the decision-making situation.

Autocratic decision-making style is a way of deciding where one person, most often a top manager of an
enterprise, has unlimited power and authority to make decisions. All other employees in that company
are only executives of the decisions. The domination of an individual, who assumes complete authority
and responsibility for decision-making, is not necessarily ineffective. Namely, the autocratic style of
decision-making can be effective in smaller organizations or organizations with a smaller number of
employees.

For larger companies, this style of decision-making marginalizes the medium level of management, which
can jeopardize the success of the business.

Democratic style implies: the existence of multiple levels of decision-making in the enterprise, the actual
decision-making power of lower management levels, respect for the hierarchy of decision-making, clear
delimitation of decisions by types at higher and lower levels of management etc. The manager is consulted
with his associates in the decision making process, so this style is still called a participative-democratic
style of decision-making.

In the contemporary conditions of business, the democratic or participative-democratic style has a

significant advantage over the autocratic decision style because it develops working climate in which the
associates make decisions autonomously and responsibly, and the greater satisfaction of the associates
ultimately results in the success of the company.

Driver, Brousseau, and Hunsaker define decision styles based on the following criteria: (1) according to
the amount of information the manager uses for decision making and (2) according to the number of
solutions for dealing with problems.

It is impossible to give a universal answer to question if it is better to decide with little and a lot of
information and whether it is better to decide with a smaller or larger number of solutions.

By combining fewer or more information required for decision making and fewer or more solutions, it is
possible to identify the following decision styles:

a) A "decisive" decision-making style characterized by the use of a minimum amount of information

and one solution to the problem;
b) Flexible decision-making style characterized by rapid decision-making in which decision-makers
often change the focus of information in order to more comprehensively observe the various
options for solving problems;
 c) A hierarchical decision style characterized by the use of large amounts of information to create a
certain possibility of solving problems:
d) An integrative decision-making style characterized by the use of large amounts of information and
the development of as many solutions to solving problems i.e. a systemic decision style is the
most demanding because it involves a large amount of information in order to understand
different perspectives and variants of problem solving.

S. P. Robbins defines four decision-making styles based on two dimensions:

1) According to the way of thinking of decision-maker which can be rational, logical or creative, intuitive
access to information and

2) According to the tolerance of the decision maker to the uncertainty.

a) The directive decision-making style is characterized by a rational way of thinking and intolerance
towards indecisiveness in decision-making, decision-makers quickly decide and focus on a short time, they
do not use large numbers of information and they estimate a small number of opportunities;

b) The analytic style of decision-making is characterized by greater tolerance towards indecisiveness, a

greater number of information and variants in problem-solving compared to the directive style, therefore,
it is a matter of careful decision-making with the ability to adapt to unique situations;

c) The conceptual style of decision-making is characterized by openness to a broad range of options, unlike
direct decision-making style decision-makers are long-term oriented and they are successful in finding
creative solutions to the problem.

e) The behavioral style of decision making is characteristic for decision-makers who successfully cooperate
with others in a way that they take care of their achievements and adopt their suggestions, the basis of
this style is the acceptance of decision-makers by others.

Decision-making skills can help a manager in understanding his/her associates, improving the work of
associates by linking obligations and responsibilities of an individual with the appropriate decision-making
style.

The Vroom-Yetton decision model is based on the assumption that management decisions are under the
influence of the nature of the problem to be solved, the availability of information on the problem and
the level of participation subordinated to their resolution. The model, giving normative instructions on
how to behave in certain situations, defines multiple decision-making styles (and leadership): the first
style is characterized by an extremely autocratic decision-making, followed by styles that gradually include
the subordinates and ends with a style that is characterized by fully participation of subordinates in
decision-making. The basic model defines seven features of the problem with appropriate diagnostic
issues and it answers the question of what style is appropriate for a particular situation. Which of the
leadership styles should be used in practice and which one is the most appropriate one depends on the
characteristics of the problems to be solved, as well as on the situation in which decisions need to be
made.

The model determines the degree of subordinate participation in the decision-making process on specific
problems. This model assumes that no leadership style can be predetermined as the best, but it should
be appropriate to the situation.
Therefore there are situations when the autocratic style is more efficient than participatory and vice versa.

In 1989 AJ Ali developed, based on the work of V. Vroom & P. Yettona and F. Muna, his own scale with
five styles of decision-making, and in 1993 he added another style (pseudo-participative style decision-
making).

The claims explain the individual style of business decision making:

The autocratic decision-making style (claim No. 1) is the style in which the manager is oriented to the task,
retaining the right of decision. Autocratic manager gives commands to his/her associates and it is a one-
way communication. The manager is the initiator of all important activities. The pseudo-consultative
decision-making style (Claim No. 2) is a style in which a manager acts in accordance with an authoritarian,
hierarchical organizational structure. The manager prepares his/her associates to accept his/her decision
which has been made in advance. The purpose of this style is to improve the image of a manager in society
as well as to create an impression of consultation but without its real use.

The consultative decision-making style (Claim No. 3) is the style of decision-making in which the manager
individually entrusts the employees with a particular problem. S/he collects their suggestions without
forming a group and then the manager makes the decision. The decision may or may not be a reflection
of the influence of the associates. The decision-making participatory style (claim No. 4) is the style of
decision-making in which a manager usually analyzes the problem together with a team of associates,
then s/he assesses some available options and decisions are made by a majority of votes. This style
equates the power and influence of associates and managers and in discussions about organizational
problems as well as in making decisions. Pseudo-participative decision style (claim No. 5) is a decision style
in which a manager allows his/ her associates to participate in decision-making but retains authority to
decide. In a pseudo-participative style, participation is only theoretically accepted but does it is not
actually applied. The manager gathers the associates in order to make a common decision, but what s/he
really requires is the approval or support for his/her own choice or decision. Delegating as a decision-
making style (Claim No. 6) is the style of decision making in which a manager requires from his/her
associates to make decisions independently. In that sense, the decision is left to a co-worker who is
actually the initiator of the activity. Participation in decision making contributes to greater organizational
productivity and greater employee satisfaction. The advantages of this style are: a positive attitude of
associates towards management, a better relationship between a manager and an associate, two-way
communication, acceptance of the manager as a representative, greater employee satisfaction and
"painless" acceptance of the decisions that have been made. The disadvantages of the participatory
decision-making style are: time to take decisions, discretion, need for professional and highly specialized
knowledge, and lack of clarity in the distribution of responsibility. A part of the scientist who deals with
decision-making styles and cross cultural differences in decision styles uses conflict as a starting point for
determining decision styles. Conflict is the behavior of a number of members of an organization that is in
opposition to other members of the organization, resulting from a lack of resources, diversity of goals and
autonomy. In that sense, conflict refers to all interaction, antagonistic and confrontational in character,
whose source is lack of resources and power as well as a different social position and system of value. EF
Harrison cites the following sources of conflict in business decision making: (1) interdependence between
individuals and organizational units, (2) criterion of performance measurement and rewarding, (3)
communication difficulties, (4) dissatisfaction with the position in organization, (5) personal
characteristics, (6) perception differences and (7) diversity of goals.
Indicators of conflict are visible and invisible signs and reflect the existence of conflicts in organization and
business decision-making and are manifested through interferences, information retention, distrust, etc.
Conflicts and sources of conflict are, according to the conceptual model, the basis for understanding and
conflict management in business decision making. The theory of conflict in business decision-making
analyzes the behaviors or patterns of behavior of individuals in dealing with important, demanding
decisions. In its biggest part, this theory is based on the psychology of stress and assumes that conflict in
business decision-making results in stress.

According to the theory of conflict in business decision-making I. L. Janis and L. Mann identify the following
decision styles: careful decision-making; avoiding decision-making with two options: a. Transferring
responsibility b. procrastination; panic decision making. Among these decision-making styles, careful
decision making is considered an optimal solution for conflicting decision-making situations.

Managers use different decision styles depending on the individual characteristics (including education,
age), depending on the organization's characteristics and the cultural context.

Managers can use a different style of decision-making depending on the situation and the type of decision,
but they are largely consistent with the decision-making style which can be largely clarified in the cultural
context.

Of course, the conclusions of M. Tayeba are not negligible who says that, apart from the different style of
decision-making among cultures, possible different behavior and style of decision making can be
perceived differently in different cultures.

In cultures with a great distance of power, individuals can accept centralized power and depend heavily
on superiors in the context of instructions and rules, so autocratic decision style is expected to deliver the
best results.

E. Steward criticizes the theory of conflict in business decision making arguing that observing decision-
making in the context of conflict results in conflict identification even there where conflict does not exist
at all. Focusing on the conflict, other, more important factors affecting business decision making, which,
under the aegis of conflict theory, cannot come to the fore, are ignored.

On the other hand, in the companies with the small distance of power, centralization of power is not
tolerated, so associates expect that they will at least be consulted when deciding. Thus, a participatory or
at least a consultative style of decision making is the optimal solution for countries with low values of
index of the distance of power, and in some countries a complete delegation of decision-making is
expected.

Participation in decision-making or participative style of decision-making in the context of cultures with

the small distance of power is directly related to trust in associates. In cultures with a great distance of
power, where the fundamental principle is the respect for the hierarchy, a harmonious relationship with
individuals in higher hierarchical positions and mistrust towards those in lower hierarchical positions is
emphasized, and in that sense, a smaller participation of decision makers.

While, in cultures with a great distance of power, individual decision making cannot be promoted, but it
is hampered. This does not mean, however, that individual decision-making in these cultures is of lesser
quality, but only that consideration of the social consequences is more detailed. Decision makers in these
cultures are more conservative and they avoid the risk.

Contrary to the foregoing, in cultures of small distance of power individuals are far more determined and
more likely to be at risk.

A.J. Ali links individualism as a dimension of national culture with business decision-making, i.e. with
expectations, commitment and behavior in decision-making. Individualism reflects the avoidance of
influence of authority and the preference of independent action and decision-making, while collectivism
reflects a longer-term perspective and greater affinity for consultation in the decision-making process.
The link between individualism and preferred decision-making style has been empirically confirmed on
several occasions.

The conclusion is: in collective societies there is a greater emphasis on decision-making styles that support
and strengthen consensus (example, consultative and participative style of decision-making), while in
individualist societies the style of decision-making is used in the pursuit of individual interests.
Individualistic culture encourages the risk of being opposed as an approach to achieving the goals and
benefits of an individual, thus promoting independence, relying on one's own knowledge, which of course
implies self-reliance on the consequences of decision-making. On the other hand, according to S.
Strohschneider, in the collectivist cultures, the system of value promotes the interests of the group and is
taking more careful approach to decision making, taking into account the social implications of the
decisions made.

Unlike the aforementioned authors (A.J. Ali and A. Strohschneider), E. Harrison concluded that it is
impossible to give an unambiguous answer to the question whether individual or group decision-making
is prone to risk or avoidance of uncertainty.

Careful decision-making is recognized as a style of decision-making in Western, individualistic cultures,

while in collective economies greater emphasis is placed on the social context and the role of other people
in decision-making.

A brief overview of the styles of business decision-making confirms the interconnection of particular
dimensions of national culture with decision-making styles. It would be acceptable to conclude that
cultural variables contribute, in combination with a series of individual and organizational factors, to
determining the style of decision-making.