Decision making process

 

Decision making process:

            These are the following steps involved in decision making process.

1)      Defining the Process: Decision making process really starts with defining the exact problem. The decision maker has to basically identify what exactly is the problem, before making a decision on the situation. A problem exists when there is difference between what is or will be happening and what should happen in given situation. The real and most basic cause of the problem must be identified. While defining the problem, it is essential to find out the critical or strategic factors of problem. These factors pose restriction or present obstacles in finding the solution to the problem. In adequacy of finance, limited managerial talent, low employee morale, adverse change in the government policy etc. are some of the critical factors which need a careful attention while deciding over a problem.    

2)   Analysis: Once the problem is defined and the right question is found, the next step is the systematic analysis of available data or information. Additional information may not be necessary for correct solutions when the problems fall within the scope of existing policies. In all the other cases, getting the relevant and adequate facts is necessary step for sound decision making.

Information system and data bases provide timely flow of relevant information to management. This will assure proper information for analysis. Judgment is necessary to secure only relevant facts for analysis. Management and information system and decision making are closely inter-connected as sound decision are based on collection, classification and analysis of facts and figures. Creative ideas help creative search for alternative solution to a problem.

3)      Development of Alternative Solutions: After analyzing a problem with the help of relevant information, the decision maker should formulate several alternative solutions for the problem. There is hardly any problem in the world wherein alternatives cannot be decision which is to be made. The development of alternative involves as activity of choosing. Choosing, by definition, implies judging the merits of various alternative and selection of specific alternative on the basis of these merits.

4)      Screening the Alternative: After developing various alternatives, the next step should be to judge and evaluate them through some decision criteria. The criteria are those things which one would like to see at the ideal outcome of any action one takes. Peter Drucker has pointed out that the four criteria for selecting the best alternative are the risk involved, cost and economy, timing and urgency and lastly limitation of resources.

5)      Selecting the Best Solution: After evaluation of various alternatives, the next step is the selection of the best solution. It requires an ability to draw distinction between seen and unseen forces, between tangible and intangible forces, between facts and guesses. To select a proper solution amongst various alternative, several basic approaches, such as experimentation, technique research, analysis technique, etc. They are open to the manager. But in making a final decision the manager will invariably be guided by guided by his past experience.

6)      Execution of the Decision: It is the final step in decision making. A manager has to put the selected decision into action. As decisions are made effective through the action of other people, we need the following three things 1) Effective communication of decision is necessary. Information must flow to those people who will convert the decision into action. Decisions must the communicated in clear, concise and understandable terms to the subordinates. 2) Securing employee acceptance is necessary in the execution of the decision. Group participation in both creative thinking and decision making will facilitate the smooth execution of decisions. A manager can look after diagnosis and analysis, 3) Correct timing of decision execution will minimize the resistance to change. Every decision introduces a change  and people are reluctant to accept a change. Hence, timing plays an important role in effective decisions.

7)      Feed back and control: Inspite of the best efforts and analysis, managers cannot make infallible decisions. So, the management should receive continues information and evaluate it regarding the effect of his implemented decision. If he considers it necessary, he may modify his decision, plan, goal and strategy and may take appropriate action to make decision a complete success.