Posted by Chester Morton / Tuesday, 28 November 2017 / No comments
Steps in the decision-making process
STEPS IN DECISION
MAKING
Definition and meaning of decision making
Decision making represents a process of choosing the best
alternative from among many possible options available to the manager of the
business unit. A manager at any given moment of making a decision concerning
the business would first of all assess all the different alternative decisions
which the business can take. Each of these alternative decisions will be looked
at in terms of their advantages and disadvantages which are known to the
managers of the business. From this evaluation, a final decision may be arrived
at. Weighing the merits and demerits of each choice or option helps the
managers of the company to make the best decisions.
One must bear in mind that decision making is an important
function of management. Without this managerial function of decision making,
other functions of management such as planning, directing, organizing and
staffing cannot be performed because each of these function involve making
decisions. In the words of Stephen Robins, “decision making is the selection of
a preferred course of action from two or more alternatives.”
STEPS IN DECISION
MAKING
Introduction
It is easy to fall into the trap of taking that decision at a
go. Quiet on the contrary, decision making goes through several steps
Step 1. Identify the problems
Problem identification constitutes the first step of decision
making. Managers often make decisions to solve the problems they identify. Identified
problem must be defined. Definition of the problem involves describing the
problem and indicating what it might mean for the business; what the symptoms
of the problems are. Symptoms are not the problems they are warning signs that
the problem exists. For example, a fall in sales could be a symptom of poor
product quality or availability of a better product in the market. The
importance of identifying a problem lies in the wisdom that a problem once
identified is half solved.
Step 2. Analysis the problem
After a problem is identified,
managers and their team must proceed to analyze the problem. Analysis of the
problem involves finding the root cause of the problem, and figuring out the
impact of the problem if left unsolved. Usually, the nature of the analysis
depends on how complex and serious the problem is. In seeking to effectively
analyze a problem, relevant information must be gathered about the problem. How
effective and accurately the problems are analyzed will determine management’s
ability to find the right solutions.
Step 3. Developing alternative
solution
At this stage management develops various alternatives to
solving the problem which has been analyzed. Each solution developed is based
on the analysis carried out of the problem which has been identified. However,
developing alternative solutions is only a step towards taking the decision
considered as the best way of dealing with the problem. Alternative solution
can also rely on the past experience of the manager, opinion of experts,
brainstorming by management team etc., all of which may be helpful to developing
the different alternatives.
Step 4. Evaluation of best
alternative
After various alternatives have been developed, the best
option from among the many solutions developed by management is carefully
evaluated. At this stage the goal of management is to determine which of the
solutions developed is the most cost effective or least expensive; which of
them carries a greater risk factor; how much advantage and disadvantage comes
with the solution and what extra benefit could the company obtain by choosing a
solution.
Step 5. Selection of best
alternative
After each alternative has been thoroughly examined and
evaluated. Managers reach the stage where manager decide on the best choice of
solution. This decision takes into account what the managers may have already
done towards solving the problems and foreseeing desirable outcome of deciding
on each decision and getting to decide on the one which offers the best, surest
and if possible the cheapest answer to the problems of the business.
Step 6. Implementing the best alternative Selected
Upon deciding on the best solution, organization must proceed
to implement that decision. Even though a lot of factors has been considered in
arriving at the deciding on the best alternative among all others, how
effective the decision choice is in helping the business achieve the business’
problem depends on how well it is implemented.
A good decision which is poorly implemented would yield a poor business
result. Implementation is important.
Step 7. Reviewing the implementation
This stage is often the last in the business decision making
process. It involves monitoring and evaluating the implemented decision to see
if everything has gone as expected. This allows the management of the firm to
measure the effectiveness of the decision taken so that lessons can be drawn for
the future or so that actions can be taken to modify the implementation process
to suit the changing situations.
ALSO READ:
