Decision Making Process
When we talk about the decision-making process, we need to remember that modern decision-making and decision-taking have been done more easily with intelligent computer software. Most Energy, Health Care, Transportation, telecommunications, and other Organizations are using effective and efficient intelligent software for their Decisions rather than humans.
We are going to discuss the Decision Making and taking processes by the Managers. Moreover, a good decision leads the organization towards its sustainability and success, which every manager wants. The decision-making depends upon all four managerial areas of an organization and these functional managers are called Decision Makers.
Decision-making situations vary by problems occurring during the process & progress and their handling.
- If the outcome of an alternative decision is known, then there is a certainty to the managers for the accuracy at the time of implementation.
- If the outcome is unknown and there is insufficient information about the processes carried out in alternative decisions, then there remains Uncertainty for the managers.
- There remains a risk of possible losses than planned results. Uncertainty is the major cause of risk while the rapid changes in the environment are another major cause.
Effective Decision-Making Process
The Decision is to make alternative plans for the growth of the company or an organization through multiple steps from identification of the problem, proper handling, development of products, analysis, and selection of alternative ideas and suggestions. Implementation of a decision depends upon its effectiveness. Thus decision-making models may be descriptive or normative.
Descriptive Decision-Making Models
It describes the actual way that managers made the decisions.
Normative Decision-Making Models
It follows the way of the most effective and authentic decision making process.
These models normally contain four steps.
Steps to Effective Decision-Making Process
Identification of Problem
The first step contains the identification of the organizational problems and issues that are discrepancies in current states or conditions and desires.
- The scanning state is involved in monitoring the work situation of changing conditions, which may be a signal of a problem.
- The categorization state involves the attempt for understanding and verifies signs of a discrepancy between the current state and the desired state.
- Diagnosis is a stage that involves the collection of information and specification of the nature and cause of an issue or problem.
In association with brainstorming, four principles are used for the generation of alternative solutions that are;
- When you generate the possible solutions, do not avoid or criticize the ideas.
- Freewill; means providing even wild ideas to increase more usable ones from others.
- Provide so many ideas for the increase in the probability of effective solutions.
- Combination and Improvement of the ideas offered.
Choosing the Best One
After the alternatives of a decision are evaluated systematically, the choice of an alternative step occurs. It contains six general criteria:
- The alternative decision should be feasible in relation to organizational parameters that are policies, technology & equipment, time, and budget.
- The quality of the alternative decision should be effective in the solution of the problems.
- Acceptability of the person that is going to be affected by the implementation of the alternative decision.
- Alternative Decisions should not exceed the cost limits, to reduce unwanted side effects.
- There must be reversibility in the alternative decision, if necessary, it can be reversed.
- Compatibility with social responsibilities of the organization should meet its ethical standards by the alternative decision.
Monitoring and Implementation
- Monitoring and Implementation are the final stages to be taken for the chosen alternative decision with planning to avoid any failure. It contains the following steps:
- Careful planning is required for the implementation. Its amount is dependent on the changes introduced, either major or minor. A great amount of planning is required for the irreversible changes.
- Sensitivity of the involved or affected persons is required. Involved or affected persons should support or be informed while implementation.
- Monitoring is compulsory to look after the progress as planned and the problems triggering the process should be resolved on an immediate basis.
In today’s world, a significant number of people are involved in the decision-making process. For an organization, the decision-making process has both benefits and drawbacks. The following are some of the benefits of making sound decisions:
Advantages of Decision Making Process
Gives More Information
Before taking some action, a good decision-making process gathers enough details. A significant number of individuals are interested in decision-making. It is carried out by the whole community rather than by a single person. Each person expresses his or her point of view on how to deal with a specific situation.
Increase in Available Options
In group decision-making, businesses may obtain a variety of options for a given situation. For proper decisions, a community of people is working together. Each individual uniquely approaches a problem. Many of the options are thoroughly examined in light of the handling situation. To achieve a better outcome, the best one is chosen.
Strengthening The Organization
It fosters a sense of teamwork and solidarity among those who work there. They all work together to achieve the company’s objectives. This improves the organization’s overall competitiveness and enhances its overall structure.
Disadvantages of Decision Making Process
Decisions are useless if they are not made promptly. Making a decision entails a set of steps that must be taken to reach a certain conclusion. Different individuals are involved in the decision-making process. Planning, organizing, and coordinating various people to meet and have quality conversations requires time and effort.
The first and most significant drawback to decision-making is that it is prohibitively costly to carry out. Different individuals are involved in decision-making in organizations to take appropriate action. Bringing multiple people together in one place necessitates a significant amount of work. Furthermore, analyzing the various viewpoints offered by members of a community is too difficult.
Another downside to decision-making is the lack of clarity on who is responsible. Individual decision-making places the burden of proof on a single person. However, when a group makes a decision, the whole group is involved, and liability is unclear. Hence this narrows the reach of responsibility to a single person.
Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
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