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Management Concepts & Organisational Behaviour - Decision Making

Steps in the Decision-making Process

   Posted On :  17.05.2018 10:40 pm

Rational decision-making process contains the following steps:

Steps in the Decision-making Process
Rational decision-making process contains the following steps:


Define the Problem

Problem definition is the most crucial step in the entire decision-making process. As the saying goes, “a problem well defined is a problem half-solved,” utmost care has to be exercised in this stage for wrong definition of the problem leads to wrong solutions. This is also called diagnostic stage. Jumping to conclusions on the basis of certain symptoms has to be avoided. The problem has to be examined from different angles so as to identify the exact causes. Unless exact causes are identified, right decisions cannot be taken.

Analyze the problem

The problem has to be thoroughly analysed. The past events that contributed to the problem, the present situation and the impact of the problem on the future have to be examined. Problems do no crop up overnight. The genesis of the problem and the various contributing factors need to be analysed. In analysing the problem, personal prejudices have to be avoided. As far as possible, an objective assessment of the situation is useful to arrive at right decisions.
Proper analysis of the problem helps the manager to assess the scope and importance of the problem. If the problem is of minor nature, he can authorize his subordinates to solve it. If it is a major problem requiring the involvement of many people, he can initiate the necessary steps. Interestingly, at times some of the problems may not warrant any decision. Leaving the problem as it is could be the better option.

Develop Alternatives

There are hardly few problems for which there are not many alternatives. Effective decision-making depends on the development of as many alternative solutions as possible. The underlying assumption is that a decision selected from among many alternatives tends to be a better one. The ability to identify and develop alternative courses of action depends on the manager’s creativity and imagination. As the thinking of two people may not be similar, the skills and abilities in developing alternatives significantly vary from one manager to the other.

Evaluate Alternatives

The next step in the decision-making process involves evaluation of the alternative courses or solutions identified to solve the problem. Alternatives have to be evaluated in the light of the objectives to be achieved and the resources required. Evaluation involves a through scrutiny of the relative merits and demerits of each of the alternatives in relation to the objectives sought to be achieved by solving the problem.

Select and Implement the Decision

Scientific evaluation of the alternatives reveals the acceptability of various alternatives. After weighing the pros and cons in detail, the best alternative has to be selected and implemented. It may not always be possible to select the best alternative for a given problem for want of complete information, time and resources. In such a case, the manager has to satisfy with limited information and optimize the yields under a given set of circumstances.
Once an alternative is selected that becomes the decision and it has to be implemented in a systematic way. The required resources for the implementation and the necessary cooperation from the people concerned with or affected by the decision have to be ensured. Otherwise, however good the decision may be, it may encounter stiff resistance in the implementation stage.

Follow-up and Feed back

Once the decision is implemented, it has to be closely monitored. Adequate follow-up measures have to be taken. In the course of implementation, so many unexpected events may render the decision ineffective. The decision may not yield the desired results. Constant follow-up helps to take corrective measures as and when necessary. Further, such a follow-up enables to identify the shortcomings or negative consequences of the decision. It provides valuable feed-back on which the decision may be reviewed or reconsidered.


Tags : Management Concepts & Organisational Behaviour - Decision Making
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