What are the steps in the decision making process?

Introduction

Decision making is a daily activity for any human being. There is no exception about that. When it comes to business organizations, decision making is a habit and a process as well.

Effective and successful decisions make profit to the company and unsuccessful ones make losses. Therefore, corporate decision making process is the most critical process in any organization.

In the decision making process, we choose one course of action from a few possible alternatives. In the process of decision making, we may use many tools, techniques and perceptions.

In addition, we may make our own private decisions or may prefer a collective decision.

Usually, decision making is hard. Majority of corporate decisions involve some level of dissatisfaction or conflict with another party.

Let's have a look at the decision making process in detail.

Steps of Decision Making Process

Following are the important steps of the decision making process. Each step may be supported by different tools and techniques.

Step 1: Identification of the purpose of the decision

In this step, the problem is thoroughly analysed. There are a couple of questions one should ask when it comes to identifying the purpose of the decision.

• What exactly is the problem?

• Why the problem should be solved?

• Who are the affected parties of the problem?

• Does the problem have a deadline or a specific time-line?

Step 2: Information gathering

A problem of an organization will have many stakeholders. In addition, there can be dozens of factors involved and affected by the problem.

In the process of solving the problem, you will have to gather as much as information related to the factors and stakeholders involved in the problem. For the process of information gathering, tools such as 'Check Sheets' can be effectively used.

Step 3: Principles for judging the alternatives

In this step, the baseline criteria for judging the alternatives should be set up. When it comes to defining the criteria, organizational goals as well as the corporate culture should be taken into consideration.

As an example, profit is one of the main concerns in every decision making process. Companies usually do not make decisions that reduce profits, unless it is an exceptional case. Likewise, baseline principles should be identified related to the problem in hand.

Step 4: Brainstorm and analyse the different choices

For this step, brainstorming to list down all the ideas is the best option. Before the idea generation step, it is vital to understand the causes of the problem and prioritization of causes.

For this, you can make use of Cause-and-Effect diagrams and Pareto Chart tool. Cause-and-Effect diagram helps you to identify all possible causes of the problem and Pareto chart helps you to prioritize and identify the causes with highest effect.

Then, you can move on generating all possible solutions (alternatives) for the problem in hand.

Step 5: Evaluation of alternatives

Use your judgement principles and decision-making criteria to evaluate each alternative. In this step, experience and effectiveness of the judgement principles come into play. You need to compare each alternative for their positives and negatives.

Step 6: Select the best alternative

Once you go through from Step 1 to Step 5, this step is easy. In addition, the selection of the best alternative is an informed decision since you have already followed a methodology to derive and select the best alternative.

Step 7: Execute the decision

Convert your decision into a plan or a sequence of activities. Execute your plan by yourself or with the help of subordinates.

Step 8: Evaluate the results

Evaluate the outcome of your decision. See whether there is anything you should learn and then correct in future decision making. This is one of the best practices that will improve your decision-making skills.

Conclusion

When it comes to making decisions, one should always weigh the positive and negative business consequences and should favour the positive outcomes.

This avoids the possible losses to the organization and keeps the company running with a sustained growth. Sometimes, avoiding decision making seems easier; especially, when you get into a lot of confrontation after making the tough decision.

But, making the decisions and accepting its consequences is the only way to stay in control of your corporate life and time.

In our regular day to day activities whether in personal lives or in our professional lives, we very often face situations filled with choices or alternatives. Choices may involve options for solution to a problem in hand, choosing a path at cross road (such as go or no-go decisions) etc. And we need to decide the seemingly best option or alternative to move forward. Decision making is one of the most important basic management skills for all of us. It is a cognitive ability. It can differ from person to person.

Making decision which are timely and which are based on careful analysis of various information is critical to our success. Decision making is a habit as well as a process. Decisions should neither be taken in haste nor be procrastinated indefinitely. Decision making can be hard sometimes. So to be on the safer side, a project management professional preparation course is the best way to make correct project decisions.

While the individual cognitive ability for decision making will depend on each individual, however, we can follow a well-structured process for decision making as suggested below:

[Please draw and insert a flow diagram showing the below steps]

1. Identify the decision to be made 

• What is the problem on hand
• What is the objective to be achieved 
• How the decision will impact people or the organization
• Urgency and criticality of the decision

2. Gather relevant information

It is important to gather all relevant information about the decision to be made with regards to above mentioned points. It will include identifying all various parties, stakeholders who will part of the decision, how the decision will be impact different groups or individuals or the organization etc.

3. Identify the options

We need to identify clearly all the available alternative options, paths or actions for the decision to be made. 

4. Evaluate the evidence

Evaluating all the options with their pros and cons needs to be carried out

5. Choose among alternatives

Choose the best alternative based on the above careful analysis of all the alternatives.

6. Implement the chosen alternative

Implement the actions associated with the alternative path or option being selected.

7. Analyse the results

We need to analyse the outcome achieved after the implementation of the actions selected in the above step.

Some of the tools and techniques which are used in the process of decision making includes but not limited to are market research, cost-benefit analysis, swot analysis, decision tree, T-chart, Pareto analysis, 5-why’s analysis etc.

Conclusion

Timely and well-thought decision making is extremely important for success in today’s time. We must take a logical approach for decision making. We must also inculcate the habit of decision making.

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