Steps in Decision Making

Any human being must make decisions on a daily basis. There is no exemption in this case. Decision-making is both a habit and a process in commercial organisations.

Successful and effective decisions result in profits for the company, whereas bad decisions result in losses. As a result, the most important process in any business is corporate decision-making.

We choose one course of action from a few options during the decision-making process. Many tools, strategies, and views may be used in the decision-making process.

Furthermore, we have the option of making our own individual decisions or opting for a group decision.

Making decisions is usually difficult. The majority of business decisions entail some level of unhappiness or disagreement with a third party.

Let’s take a closer look at the decision-making process.

Decision-Making Process Steps

The steps in the decision-making process are listed below. Different tools and strategies may be used to support each step.

Step 1: Determine the reason behind the decision.

The problem is thoroughly examined in this step. When it comes to determining the decision’s purpose, there are a few questions to consider.

• What precisely is the issue?

• Why should the issue be resolved?

• Who are the people who are affected by the problem?

• Is there a time limit or a deadline for the problem?

Step 2: Gathering information.

Many people will be affected by an organisation’s problem. Furthermore, there could be dozens of components involved and impacted by the issue.

In order to solve the problem, you’ll need to acquire as much information as possible about the aspects and stakeholders involved. Tools like ‘Check Sheets’ can be quite useful in the information collection process.

Step 3: Criteria for evaluating alternatives.

The baseline criteria for judging the options should be established in this step. Organisational goals and business culture should both be considered while creating the criteria.

Profit, for example, is one of the most important considerations in any decision-making process. Unless there is an extraordinary circumstance, companies rarely make actions that lower profitability. Similarly, baseline concepts relevant to the topic at hand should be determined.

Step 4: Brainstorm and evaluate your options.

The greatest option for this phase is to brainstorm and write down all of your thoughts. Understanding the reasons for the problem and prioritising the causes is critical before moving on to the idea generating stage.

You can utilise cause-and-effect diagrams and the Pareto Chart tool for this. The cause-and-effect diagram aids in identifying all potential causes of the problem, whereas the Pareto chart aids in prioritising and identifying the factors having the greatest impact.

Then you can proceed to brainstorming all conceivable solutions (alternatives) to the problem at hand.

Step 5: Alternatives are assessed.

To analyse each option, apply your judgement principles and decision-making criteria. Experience and the effectiveness of the judgement principles are used in this step. You must weigh the advantages and disadvantages of each option.

Step 6: Choose the best option.

This step is simple once you’ve completed Steps 1 through 5. Furthermore, because you have already followed a methodology to derive and pick the greatest alternative, choosing the best alternative is an informed decision.

Step 7: Put your plan into action.

Convert your decision into a strategy or a set of steps. Execute your strategy alone or with the assistance of subordinates.

Step 8: Assess the outcomes.

Consider how your decision turned out. Check to see if there’s anything you should learn and correct in your future decisions. This is one of the most effective methods for improving decision-making abilities.

Conclusion

When making judgments, one should always consider the good and bad business implications and favour the positive outcomes.

This prevents the company from suffering losses and allows it to continue to expand. Avoiding difficult decisions appears to be easier at times, especially when making the difficult decision leads to a lot of conflict.

However, the only way to keep control of your corporate life and time is to make decisions and accept the consequences.