The Decision Making Process

THE DECISION MAKING PROCESS:
Managers make decisions affecting the organization daily and communicate those decisions to other organizational members. Some decisions affect a large number of organization members, cost a great deal of money to Carry out, or have a long term effect on the organization. Such significant decisions can have a major impact, not only on the management systems itself, but on the career of the manager who makes them.
Other decisions are fairly insignificant, affecting only a small member of organization members, costing little to carry out, and producing only a short term effect on the organization.

Figure 1: The Decision-Making Process

The model in Figure 1 above is a normative model, because it illustrates how a good decision ought to be made. Business Studies also uses positive models which simply aim to illustrate how decisions are, in fact, made in businesses without commenting on whether they are good or bad.
1. Identifying a problem: The first step towards a decision making process is to define the problem. Obviously, there would be no need to make a decision without having a problem. So, the first thing one has to do is to state the underlying problem that has to be solved. You also have to clearly state the outcome or goal that you desire after you have made the decision. This is a good way to start, because stating your goals would help you in clarifying your thoughts. If the problem is stated incorrectly or unclearly then your decisions will be wrong.
2. Identify Alternatives: Sometimes your only alternatives are to do it or don't do it. Most of the time you will have several feasible alternatives. It is worth doing research to ensure you have as many good alternatives as possible.
3. Develop Alternatives: The situation of making a decision arises because there are many alternatives available for it. Hence, the next step after defining the main problem would be to state out the alternatives available for that particular situation. Here, you do not have to restrict yourself to think about the very obvious options, rather you can use your creative skills and come out with alternatives that may look a little irrelevant. This is important because sometimes solutions can come out from these out-of-the-box ideas. You would also have to do adequate research to come up with the necessary facts that would aid in solving the problem.
4. Evaluate the Alternatives: This can be said to be the one of the most important stages of the decision making process. This is the stage where you have to analyze each alternative you have come up with. You have to find out the advantages and disadvantages of each option. This can be done as per the research you have done on that particular alternative. At this stage, you can also filter out the options that you think are impossible or do not serve your purpose. Rating each option with a numerical digit would also help in the filtration process. This is where the analysis begins. You must have some logical approach to rank the alternatives. Two such logical approaches are discussed at Example of a Decision Matrix and at Sample SWOT Analysis.
5. Make A Decision - You have evaluated your alternatives. Two or more of your high ranked alternatives may be very close in the evaluations. You should eliminate all of the alternatives that were low ranked. Now it is time to go back and examine the inputs you made to evaluation criteria for the close high ranked alternatives. Do you still feel comfortable with the inputs you made? When you have made any changes it is time for some subjection. You have eliminated the alternatives that do not make logical sense. Now it is time to let your subconscious work. Review all the details of the remaining high ranked close alternatives, so they are completely clear in your mind. Completely leave the project alone for a few days. When you return to the project, the decision will likely be very clear in your head. This only works if you have done your homework!
6. Implement the Solution: The next obvious step after choosing an option would be implementing the solution. Just making the decision would not give the result one wants. Rather, you have to carry out on the decision you have made. This is a very crucial step because all the people involved in the implementation of a solution should know about the implications of making the decision. This is very essential for the decision to give successful results.
7. Monitor your Solution: Just making the decision and implementing it is not the end of the decision making process, it is very important to monitor your decision regularly. At this stage, you have to keep a close eye on the progress of the solution taken and also whether it has led to the results you expected.
These steps to decision making process may, at first, seem very complicated. However, these are essential decision making techniques that would aid you in taking proper decisions in your personal as well as professional life.