Process of Decision Making

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 Process of Decision Making

Decision making is crucial in business, involving selecting the best course of action among several alternatives. It impacts profitability and organizational success.

Steps of Decision Making Process:

Step 1: Identification of the Purpose of the Decision

  • Analyze the Problem: Understand the issue thoroughly.
  • Key Questions: What is the problem? Why solve it? Who is affected? Is there a deadline?

Step 2: Information Gathering

  • Collect Data: Gather all relevant information about factors and stakeholders involved in the problem.
  • Tools: Use tools like Check Sheets for efficient data collection.

Step 3: Principles for Judging the Alternatives

  • Set Criteria: Define baseline criteria for evaluating alternatives, considering organizational goals and culture.
  • Example: Profitability is a common criterion unless exceptional circumstances dictate otherwise.

Step 4: Brainstorm and Analyze the Different Choices

  • Idea Generation: Brainstorm to list all possible solutions.
  • Understand Causes: Use Cause-and-Effect diagrams and Pareto Charts to identify and prioritize causes.
  • Generate Alternatives: Develop all potential solutions for the problem.

Step 5: Evaluation of Alternatives

  • Assess Options: Evaluate each alternative using judgment principles and decision-making criteria.
  • Compare Positives and Negatives: Weigh the pros and cons of each option.

Step 6: Select the Best Alternative

  • Make an Informed Choice: Choose the best alternative based on thorough analysis.
  • Ease of Selection: This step is straightforward if the previous steps are followed diligently.

Step 7: Execute the Decision

  • Action Plan: Convert the decision into a plan or sequence of activities.
  • Implementation: Execute the plan with or without the help of subordinates.

Step 8: Evaluate the Results

  • Assess Outcomes: Review the results of the decision.
  • Learn and Improve: Identify lessons learned to enhance future decision-making skills.

Key Points:

  • Balance Consequences: Weigh positive and negative outcomes to avoid losses and ensure sustained growth.
  • Confrontation and Control: Making and accepting tough decisions is crucial for maintaining control over corporate life and time.