Managers are constantly called upon to make decisions in order to solve problems. Decision making and problem solving are ongoing processes of evaluating situations or problems, considering alternatives, making choices, and following them up with the necessary actions. Sometimes the decision-making process is extremely short, and mental reflection is essentially instantaneous. In other situations, the process can drag on for weeks or even months. The entire decision-making process is dependent upon the right information being available to the right people at the right times.
The decision-making process involves the following steps: 1. Identifying the problems 2. Identify decision criteria 3. Allocating weights to criteria 4. Develop alternatives. 5. Analyze the alternatives. 6. Select the best alternative. 7. Implement the decision. 8. Establish a control and evaluation system. 1. Identifying the problems In this step, the problem is thoroughly analysed. There are a couple of questions one should ask when it comes to identifying the purpose of the decision. * What exactly is the problem? * Why the problem should be solved? Who are the affected parties of the problem? * Does the problem have a deadline or a specific time-line? 2. Identifying decision criteria The most obviously troubling situations found in an organization can usually be identified as decision crietria of underlying problems (Table 1). These citeria all indicate that something is wrong with an organization, but they don’t identify root causes. A successful manager doesn’t just attack the decision criteria but he works to uncover the factors that cause. TABLE 1| Identifying Decision Criteria| Criteria | Underlying Problem|
Low profits and/or declining sales| Poor market research| High costs| Poor design process; poorly trained employees| Low morale| Lack of communication between management and subordinates| High employee turnover| Rate of pay too low; job design not suitable| High rate of absenteeism| Employees believe that they are not valued| | 3. Allocating weights to criteria Assigning a weight to each item places the items in the correct priority order of their importance in the decision-making process. 4. Developing alternatives Time pressures frequently cause a manager to move forward after considering only the first or most obvious answers.
However, successful problem solving requires thorough examination of the challenge, and a quick answer may not result in a permanent solution. Thus, a manager should think through and investigate several alternative solutions to a single problem before making a quick decision. One of the best known methods for developing alternatives is throughbrainstorming, where a group works together to generate ideas and alternative solutions. The assumption behind brainstorming is that the group dynamic stimulates thinking — one person’s ideas, no matter how outrageous, can generate ideas from the others in the group.
Ideally, this spawning of ideas is contagious, and before long, lots of suggestions and ideas flow. Brainstorming usually requires 30 minutes to an hour. The following specific rules should be followed during brainstorming sessions: * Concentrate on the problem at hand. This rule keeps the discussion very specific and avoids the group’s tendency to address the events leading up to the current problem. * Entertain all ideas. In fact, the more ideas that comes up, the better. In other words, there are no bad ideas. Encouragement of the group to freely offer all thoughts on the subject is important.
Participants should be encouraged to present ideas no matter how ridiculous they seem, because such ideas may spark a creative thought on the part of someone else. * Refrain from allowing members to evaluate others’ ideas on the spot. All judgments should be deferred until all thoughts are presented, and the group concurs on the best ideas. Although brainstorming is the most common technique to develop alternative solutions, managers can use several other ways to help develop solutions for example: * Nominal group technique.
This method involves the use of a highly structured meeting, complete with an agenda, and restricts discussion or interpersonal communication during the decision-making process. This technique is useful because it ensures that every group member has equal input in the decision-making process. It also avoids some of the pitfalls, such as pressure to conform, group dominance, hostility, and conflict, that can plague a more interactive, spontaneous, unstructured forum such as brainstorming. 5. Analyzing alternatives The purpose of this step is to decide the relative merits of each idea.
Managers must identify the advantages and disadvantages of each alternative solution before making a final decision. Evaluating the alternatives can be done in numerous ways. Here are a few possibilities: * Determine the pros and cons of each alternative. * Perform a cost-benefit analysis for each alternative. * Weight each factor important in the decision, ranking each alternative relative to its ability to meet each factor, and then multiply by a probability factor to provide a final value for each alternative. Regardless of the method used, a manager needs to evaluate each alternative in terms of its * Feasibility – Can it be done? Effectiveness – How well does it resolve the problem situation? * Consequences – What will be its costs (financial and nonfinancial) to the organization? 6. Selecting an alternatives After a manager has analyzed all the alternatives, she must decide on the best one. The best alternative is the one that produces the most advantages and the fewest serious disadvantages. Sometimes, the selection process can be fairly straightforward, such as the alternative with the most pros and fewest cons. Other times, the optimal solution is a combination of several alternatives. Sometimes, though, the best alternative may not be obvious.
That’s when a manager must decide which alternative is the most feasible and effective, coupled with which carries the lowest costs to the organization. (See the preceding section. ) Probability estimates, where analysis of each alternative’s chances of success takes place, often come into play at this point in the decision-making process. In those cases, a manager simply selects the alternative with the highest probability of success. 7. Implementing the alternative Managers are paid to make decisions, but they are also paid to get results from these decisions. Positive results must follow decisions.
Everyone involved with the decision must know his or her role in ensuring a successful outcome. To make certain that employees understand their roles, managers must thoughtfully devise programs, procedures, rules, or policies to help aid them in the problem-solving process. 8. Evaluating decision effectiveness Even the most experienced business owners can learn from their mistakes. Always monitor the results of strategic decisions you make as a small business owner; be ready to adapt your plan as necessary, or to switch to another potential solution if your chosen solution does not work out the way you expected.
Conclusion When it comes to making decisions, one should always weigh the positive and negative business consequences and should favour the positive outcomes. This avoids the possible losses to the organization and keeps the company running with a sustained growth. Sometimes, avoiding decision-making seems easier; specially, when we get into a lot of confrontation after making the tough decision. But, making the decisions and accepting its consequences is the only way to stay in control of our corporate life and time.