Although it may seem surprising, it’s true: Half the decisions made by managers fail to solve the problems they are aimed at; outcomes fall short of their objectives. The first step of the decision-making model is to classify and define the problem, which may sometimes take the form of an opportunity. Problems may be classified in terms of structure, conditions, and the type of decision.

For programmed decisions, those that arise in recurring or routine situations, you should use decision rules or organizational policies and procedures to make the decision. So it is not necessary to follow all the steps of the model. For nonprogrammed decisions, significant decisions that arise in nonrecurring and nonroutine situations, you should use the decision-making model.

The three decision-making conditions are certainty, risk, and uncertainty. When making a decision under the conditions of certainty, you know the outcome of each alternative in advance, so you can usually take quick action. Under conditions of uncertainty, lack of information or knowledge makes the outcome of each alternative unpredictable, so you cannot accurately determine probabilities. Although risk and uncertainty cannot be eliminated, they can be reduced.