The following are 15 Best And Most Effective decision making process in business:
- Identify the decision
- Analyze the decision
- Gather information about the decision
- Sources of information
- Analyze the information
- Figure out alternatives/choices
- Evaluate each alternative
- Make a choice
- Implement your choice
- Monitor the performance of your choice
- Ask for feedback
- Positive feedback
- Negative feedback
- Address all issues raised
- Re-implement your revised decision
In decision making processes, you will need to choose a particular line of action from a number of available alternatives or options.
Decision making processes cuts across all aspects of human activities, including governments, companies and individuals.
Although, decision making processes in governments and companies often follow the same principle, the same cannot be said of individuals and households.
This article is, therefore, focusing on decision making processes businesses.
Decision making process: Identify a decision
In decision making, the first stage is to recognize the existence of a plan, proposal or an action that requires decision making.
In addition, in decision making two conditions must exist.
Firstly, there must exist a situation or problem that needs decision.
Secondly, the problem to be solved must have alternatives or options from which you can make a choice.
Economists tell us that without alternatives or options there will be no choice to make.
For example, if you have only one item of clothing you will have no choice to make.
In other words, you will be restricted to using the only one clothing you have.
Therefore, decision making is all about making choices from a available several alternatives or options.
Analyze the decision
Having identified a situation that requires decision making, the next step is to analyze the situation or problem with a view to finding a solution.
Accordingly, you will need to find out the exact nature of the problem.
Additionally, you will also need to identify:
- the actual cause of the problem.
- The type of decision that will best solve the problem.
- When and how the decision will be made
- Who will make the decision.
In all cases, your overall priority should be to make the best decision that will meet your needs.
Decision making process: Gather info about the decision
The next process is to gather as much information as possible about the decision to make.
This stage of the process is very important because you are going to make a decision that can make or break your business.
Therefore, you should be really ensure that you gather only relevant information about the business.
This is because decision made on the basis of unverified data can most likely not produce the desired result.
Sources of information
For you to make informed decision, you need credible information.
In other words, you need reliable data.
You can find credible information from the following sources:
- The internet
- Oral interviews
- Industry publications
- Or even personal observations.
You need to find out if the problem was as a result of:
- poor planning.
- or it fell under the category of frequently occurring problems.
- unexpected problem that you have never had before.
- action or inaction of someone in the chain of command.
Finally, you will need to ask questions and get answers as to how that or similar problem was resolved in the past by those who have experienced it before you.
Analyze the information
The next process in decision making is to analyze the information.
This time you will need to break down the whole problem into many separate parts with a view to analyzing them.
Furthermore, you will need to analyze every single part of the whole information that you have gathered.
Furthermore, your aim is to determine how or the role each part played that brought about the problem.
Most importantly, you should remember that if you do not know the root cause of the problem, you cannot make a valid and workable decision.
Decision making process: Figure out alternative choices
As mentioned earlier in this article, you should be able to make a choice from all the available alternatives or options.
In decision making, this is one of the most important part of the process.
However, the rule of the thumb, as always, is to make a decision that will best meet the needs of your business.
At this stage of the decision making process, you will need to consider many factors, including the following:
- How many alternatives or options are available to you
- The pros and cons of each alternative or option
- The costs and benefits of each alternative or option
- The short-term and long-term benefits of each alternative or option.
- The time and conveniences associated with each alternative or option.
At this stage of the decision making process, all options are on the table.
Therefore, you will need great care and wisdom in the process of making a decision.
Evaluate each alternative choice
In practice, some of the alternative choices might have the same or equivalent costs and benefits.
Similarly, some of the alternatives may have the same or very close values.
When you have ties like this one, decision making becomes even more difficult.
Consequently, you will need to rely on credible info and wisdom in making your decision.
Moreover, you should not go for an option just because it will cost little money.
On the other hand, you should not just discard an option because the costs high.
Therefore, you need to use wisdom, not sentiment, to make a decision that will be in the best interest of your business.
After all, only the best is good for you.
Sometimes, decision making can be really challenging.
However, if you find it difficult to arrive at a workable decision, you should feel free to seek advice from your mentor or those who have been there before you.
Decision Making Process: Make a choice
Making a choice is the most critical aspect of the process.
The ultimate goal of the processes is to make a valid and optimal decision that will take your business to where you want it to be.
Therefore, you should make sure that your decision making is based on verifiable and credible data.
In other words, your decision should be based on facts and figures: not sentiment.
To help you at this critical time, there are two well known strategies you can use in decision making. They are called Rule 24 and Rule 72.
Rule 24 simply means that you should use 24 hours to think and find a workable solution to the problem.
Rule 72 means that you need to spend 72 hours to arrive at a decision.
However, should the problem become overwhelming, you can seek help from outside.
Remember that decisions made on the basis of trial and error can produce positive or negative effects on your business.
In some cases, poor decision can even create more problems than the one you are trying to solve.
Decision making process: Implement your choice
Now that you have made a choice from the various options generated by your analysis, it is time for you to implement your choice.
It is important for you to remember that you still need to keep your working papers.
In other words, you should not discard all the papers you used during the various stages of the process.
This is because you might have need to refer to them in the future.
Looking back on those papers, once a while, will help you to ensure that you are not abandoning your earlier findings.
Monitor the performance of your choice
In business it is one thing to make a decision but it is quite another to implement and see the decision through.
Therefore, you must monitor the performance of your decision to make sure that the decision is on the right track.
At the end of the day you success and the growth of your business is what you want.
Ask for feedback
After implementing your decision, you will need to ask your customers for feedback on the performance of your decision.
Additionally, the feedback you get from your customers will enable you to know how customers are reacting to your decision.
If you get positive feedback from your customers, you should take advantage of the positive reactions of your customers to improve even more.
In other words, you should embrace the concept of continuous improvements.
Even the big companies practice continuous improvements to enable them remain competitive in the marketplace.
In decision making, negative feedback plays an important role.
This is because feedback will normally point out to you the weaknesses in your business.
So the quality of your decision is decided by customers in the marketplace.
Moreover, if you receive negative feedback, you should accept it good faith.
Bill Gates was quoted as saying “your most complaining customers are your greatest source of learning.
When you do receive negative feedback concerning your products or services you should go back to the drawing board, work it out and find out what went wrong.
Decision making process: Address issues raised
After identifying and fixing the criticisms, suggestions and complaints, you should revisit the decision to address all issues raised in the feedback.
You can also reach out to all your working papers to see if there was an important point you missed out when you were analyzing the information you gathered.
Relaunch your revised decision
After you have considered and made all the necessary adjustments based on the feedback you got from your customers, you should then implement the decision again.
In conclusion, note that even the most successful companies are still looking for better and cheaper ways of improving the fortunes of their businesses.
Therefore, you will need to continually monitor and update your decisions.
This will enable you to solve current and future problems.
B. Sc. Accounting (University of Benin)
Benin City, Nigeria.