Identify and explain the steps of a decision making process in an organisation

Rational decision making process/scientific decision making process.
According to David Schwartz, decision making is made up of the following identifiable steps:

1. Find and define the problem and its process:
In defining a problem, it is important to consider not just the problem itself, but the underlying courses e.g. High staff turnover may be as a result of:
i) Poor pay
ii) Lack of career progression
iii) Poor leadership
iv) Unconducive work environment, etc.

The causes of the problem must be understood before they are addressed. Managers must be aware of the risks of dealing with the symptoms of a problem instead of the real problem.

2. Generate alternative solutions:
A problem can be addressed in several ways. It is best to generate as many ways of solving the problem as possible. This is of course subject to availability for time and criticality of the decision.

3. Gather enough information about the alternative solutions:
Managers need to gather as much information as possible about the various alternatives generated before picking or dropping any one of them. This assists in realistic appraisal of each alternative.

4. Analyze or evaluate the alternatives:
Equipped with enough information, managers are now in a position to critically and realistically evaluate each alternative. They consider the pros and cons of each alternative before picking/dropping any of the alternatives.

The following tools may be useful in the evaluation/analysis:
i) Cost-benefit analysis: – Options whose benefits exceed associated costs are considered in priority.
ii) Marginal analysis: products with higher marginal contributions considered in priority.
iii) Decision trees: Expected values of the various possibilities/outcomes considered.

5. Decide/select the preferred solution:
This entails selecting the alternative offering the highest promise of attaining the objectives. This is probably the highest stage in decision making process. Sophisticated evaluation techniques may be used. However, there is nothing to guarantee the success of the decision. Fear of making a wrong decision sometimes causes managers to be indecisive. Indeed, manager’s success depends on the quality decisions made by them.

6. Implement the preferred solution:
Once the choice has been made, the alternative is converted into action and implemented.

7. Evaluation of outcomes:
Evaluate the results to find out if the decision is successful in the light of changes in the business environment.

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