Decision Making Process:

Decision refers to a process by which a person chooses a particular course of action from many options to produce the desired result. The main purpose of decision-making is to direct the resources of an organization towards the future. It reduces the difference between a goal and the actual situation and the desired situation by solving effective problems and taking advantage of business opportunities.

The decision-making process involves organization, its employees and commitment towards its resources in the direction of a special course from various options available to achieve some predefined objectives. It helps in deciding managers try to identify organizational problems and solve them. It is taken at all management levels in an organization Decision taken in one organization are usually related –
1. The goals and objectives of the organization
2. Organizational structure
3. Organizational Design
4. Budget
5. Duration of time
6. Employees – salary, wages, working hours, promotion, down gradation
7. Marketing Mix – Product, Price, Location, Promotions
8. Research and Design

Steps of Decision Making Process:

Step 1: Identify the purpose of the decision: In this phase, the problem is thoroughly analyzed. There are some questions that, after asking, should identify the purpose of the decision.

  1. What exactly is the problem?
  2. Why should the problem be solved?
  3. Who are the affected side of the problem?
  4. Is there a deadline of the problem or a specific timeline?

Also read | Techniques of decision making

Step 2: Collecting information: There will be many stakeholders in the problem of an organization. Apart from this, there can be dozens of factors involved and affected by the problem. In the process of solving the problem, you have to gather information related to the factors and stakeholders involved in the problem. For the process of gathering information, tools like ‘check sheets’ can be used effectively.

Step 3: Principles of Identifying Options: In this phase, the basic criteria should be established to identify alternatives. When it comes to defining norms, corporate culture along with organizational goals should also be taken into account. As an example, in every decision-making process profit is one of the main concerns. Companies generally do not make decisions that reduce profits, unless it is an exceptional case. Similarly, basic principles related to the problem in hand should be identified.

Also read | Planning – Types of plans

Step 4: Consider different options and brainstorm: For this step, brainstorming is the best option to list all the ideas. Before considering the idea of the generation, it is important to understand the priorities of the causes and causes of the problem. For this, you can use the Cause-and-Effect Diagram and the Perto Chart Tool. The cause-and-effect diagram helps you identify all the possible causes of the problem and the Parátto Chart helps you prioritize and identify the reasons for the highest impact. Then, you can proceed with generating all possible solutions for the problem in hand.

Step 5: Evaluating Options: Use your decision principles and decision-making criteria to evaluate each option. In this phase, experience and effectiveness of decision principles come into play. You need to compare each option for their positivity and negativity.

Also read | What is planning process?

Step 6: Choose the best option: Once you go from step 1 to step 5, this step is easy. Apart from this, choosing the best option is an informed decision because you have already followed a method to get the best option and to choose.

Step 7: Perform the Decision: Change your decision in a plan or sequence of activities. Perform your plan with the help of self or subordinates.

Step 8: Evaluate Results: Evaluate the outcome of your decision. See if there is something you should learn and then be right in making future decisions. It is one of the best practices that will improve your decision-making skills.

Also read | Bounded rationality – What is bounded rationality? Give an example

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Akansha Shrivastava
Akansha Shrivastava
2 years ago

Thanks for this amazing article.
I loved reading this article it is recommendable.

2 years ago

Thank you so much for this incredible article on the decision-making process.

2 years ago

Kudos! Good and substantive write up. Very easy to understand.

2 years ago

Liked the explanation, it’s quite clear

2 years ago

Very good article explained in a simple and elegant way. Thanks!

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