What Is The First Step Of The Decision-making Process – 1. Diagnosis: The first step in decision making is to identify what the problem actually is. If the problem is not properly diagnosed, efforts to fix it will be futile.
For example, if sales are falling, managers may assume that rising costs are the problem. But the real problem is inadequate sales plan or poor quality or lack of promotion. Therefore, management’s efforts to reduce costs will not help in increasing sales. Joseph L. Massey rightly said that “good decision-making depends on identifying the right problem.” Correct diagnosis of the problem is very important because a disease can only be cured if it is correctly diagnosed.
What Is The First Step Of The Decision-making Process
2. Identification of the problem: After determining the exact problem, it should be thoroughly analyzed and information and data collected about it. It helps the management to get a clear idea about the problem. Any problem involves innumerable factors, but to minimize wastage of time and effort, focus on relevant and closely related factors for the purpose of gathering analytical information and data. Also, from the collected data and information, managers must separate facts from beliefs and opinions, and decisions must be primarily based on facts.
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3. Develop Alternative Solutions or Actions: The next step is to develop alternative solutions or actions. Managers can take a decision after evaluating various options, and evaluating alternatives helps managers make the best decision. For example, if managers want to fill a vacancy, they may have to consider various options, such as promoting from within or hiring from the outside or hiring a relative of a previous employee. Likewise, the methods of selling one’s products may include various options such as whether to sell directly, or through an intermediary, or a combination of the two, ie. Direct sales and through intermediaries. Therefore, there are other options for each problem and should be analyzed before making a final decision.
4. Selecting the best solution: The next step is to select the best solution among the many options generated. To this end, managers must consider the pros and cons of each alternative solution and the costs and sacrifices associated with each solution. Some of the criteria for selecting the best solution are feasibility, risk level, time required for implementation, feasibility of the solution, availability of resources, alignment with company goals, etc. Generally good knowledge and practical experience. The manager helps him choose the best solution.
5. CONVERTING THE DECISION INTO EFFECTIVE ACTION: After selecting the best solution or decision, the management takes steps to implement the decision with the cooperation of the employees. It is better to involve employees in the decision making process to avoid employee resistance to implementing the decision.
6. Follow the decision: Sometimes the manager’s decision is not right. Therefore, the manager should follow the follow-up method while converting the decision into action. It helps to protect against wrong decision and change or change the decision without losing time.
Answered: Instructions Identify Each Statement As…
There are many decisions to be made in every organization. It may be related to finance, marketing, HRD, product quality assurance, customer relations etc. When such diverse decisions have to be made, it is important to identify decision makers at different levels. Individuals must develop some intelligence to make decisions. Justification includes two aspects to consider:
The scope of the administrative decision refers to the period of validity of the decision in the organization. This indicates the extent to which the result can be used.
But “level of management” refers to different levels of management in an organization. The following image shows the decision taken and its validity period.
This diagram describes the validity of decisions and who makes decisions. If top management takes a decision, it usually applies to policy decisions and lower levels. Although the decision is taken by the middle management, it applies to the middle and lower levels. If decided by entry level administrators, the relevant period is limited to that level. Robert Frost wrote: “Two roads diverge in a forest, and I took the one less traveled, and that made all the difference. But unfortunately, not all decisions are as simple as “take this road and see where it leads,” especially when you’re making decisions about your business.”
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Whether you manage a small team or lead a large organization, your success and the success of your company depends on you making the right decisions and learning from the wrong ones.
Use these steps in the decision-making process to help you make more profitable decisions. You will be better equipped to resist impulsive decision making and make more educated decisions.
The business decision-making process is a step-by-step process that allows professionals to solve problems by weighing evidence, examining alternatives, and choosing a path from there. At the end of this defined process, it also provides an opportunity to review whether the decision was correct or not.
These seven steps are commonly used by professionals, although there are slight differences in decision making found online, in business textbooks, and in leadership presentations.
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To make a decision, you must first identify the problem you need to solve or the question you need to answer. Define your decision clearly. If you find the wrong problem to solve, or the problem you’ve chosen is too detailed, you’ll leave the train before it leaves the station.
Once you’ve identified your decision, it’s time to gather information about that option. Do an internal assessment to see where your company succeeded and failed based on your results. Also obtain information from external sources, including surveys, market research and, in some cases, estimates from paid consultants.
Remember that you can get bogged down with too much information and this can complicate the process.
Now with relevant information at your fingertips, identify potential solutions to your problem. There is usually more than one option to consider when trying to achieve a goal. For example, if your business is trying to get more engagement on social media, your options may be social advertising, changing your organic social media strategy, or a combination of the two.
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After you have identified several alternatives, weigh the evidence for or against the identified alternatives. Look at what companies have done in the past to succeed in these fields, and take a hard look at your own company’s successes and failures. Identify the potential risks for each of your options and weigh them against the potential rewards.
Part of the decision-making process is where you actually make the decision. You have identified and clarified what decision to make, gathered all relevant information, and considered possible avenues for development and adoption. You have to be willing to choose.
Once you’ve made your decision, act on it! Create a plan to make your decision clear and actionable. Create a project plan based on your decision and then assign tasks to your team.
After a predetermined period of time—which you define at a point in the decision-making process—take an honest look at your decision. Did you solve the problem? Did you answer the question? Did you achieve your goals?
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If so, note what works for future reference. If not, learn from your mistakes as you restart the decision-making process.
Depending on the decision, you can evaluate the evidence using a decision tree. In the example below, a company is trying to decide whether to market test a product before introducing it. Various articles list the probability of success and the estimated payouts so that the company can see which option is the most profitable.
Visual activities are the perfect choice for quickly generating ideas and reaching consensus. Use these powerful functions with your team members to turn quality feedback into actionable insights and make easy decisions in seconds.
A decision matrix is another tool to help you evaluate your options and make better decisions. Learn how to take a decision matrix and get started quickly using the template below.
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You can create a classic pros and cons list and clearly identify whether your options meet the necessary criteria or are too risky.
With the 7 steps we’ve outlined and some tools to get you started, you’ll be able to make more informed decisions faster.
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