â€¢ Making decisions is a part of everyday life. Some consider it an art, others a proficiency. Decisions may be personal or professional, but, in each case, the choices will often have lasting consequences.
â€¢ Decision-making is a comprehensive process, not just a simple act of choosing among alternatives. Depending on the source and certain concepts, decision-making is described as a process that consists of 6 to 11 steps. In this unit weâ€™ll present the concept that identifies an 8 step process of making decision.
â€¢ Eight steps of decision making process
â€¢ The decision-making process begins with the existence of a problem or, more specifically, a discrepancy between an existing and a desired state of affairs. Effective problem definitions isnâ€™t simple or trivial. In order to identify a problem, you should recognize and understand the three characteristics of problem:
â€¢ You must be aware of the problem. Be sure to identify the actual problem rather than a symptom of the problem.
â€¢ You must be under pressure to act. A true problem puts pressure on decision maker to act; a problem without pressure to act is a problem that can be postponed.
â€¢ You must have the authority or resources to act. When one recognizes a problem and is under pressure to take action but does not have necessary resources, he or she usually feels that unrealistic demands are being put upon him/her.
â€¢ Once you have identified a problem, the decision criteria important to resolve the problem must be identified. That is, you must determine whatâ€™s relevant in making decision. Whether explicitly stated or not, every decision maker has criteria that guide his or her decision. These might include criteria such as:
â€¢ Costs that will be incurred (investments required)
â€¢ Risks likely to be encountered (chance of failure)
â€¢ Outcomes that are desired (growth of the firm)
â€¢ If the criteria identified in step 2 arenâ€™t equally important, the decision-maker must weigh them in order to give them the correct priority in the decision. A simple approach to weight criteria is to give the most important criterion a weight of 10 and then assign weights to the rest compared with this standard. Thus, a criterion with a weight of 10 would be twice as important as one given a 5. Of course, you could use any other scale or any number as the highest weight. The idea is to prioritize the criteria you identified in step 2 by assigning a weight to each of them.
â€¢ The fourth step in the decision-making process requires the decision maker to list viable alternatives that could resolve the problem. In this step, a decision maker needs to be quite creative.
â€¢ Once the alternatives have been identified, a decision maker must critically analyse each one by appraising it against the criteria established in steps 2 and 3. From this comparison, the strengths and weaknesses of each alternative become evident.
â€¢ The sixth step is choosing the best alternative from among these considered. Once all the pertinent criteria in the decision have been weighted and viable alternatives analysed, we choose the alternative that generated the highest total in step 5.
â€¢ Step 7 is concerned with putting decision into action. This involves conveying the decision on those affected by it and getting their commitment to it. If the people who need to carry out a decision participate in the decision-making process, theyâ€™re more likely to enthusiastically support the outcome than if you just tell them what they have to do.
â€¢ The last step in the decision-making process involves evaluating the outcome of the decision to see if the problem had been resolved. If the evaluation shows that the problem still exists, then the decision maker needs to assess what went wrong.
â€¢ Was the problem incorrectly defined?
â€¢ Were errors made when evaluating alternatives?
â€¢ Was the right alternative selected but poorly implemented?
â€¢ These answers might lead you to re-do an earlier step or might even require starting the whole process over.