Decision Making Process

Decision Making Process

Identifying the problem: The decision making process begins with recognition of a problem that requires a decision. The problem may arise due to gap between present & desire state of affairs. The threats & opportunities created by environment changes may also create decision problem. At this stage manager should identify & define the real problem, imagination, experience & judgment are required for deduction of problem that requires managerial decision.

Diagnose the problem: diagnosing the real problem implies, analyzing the pro in terms of its elements, magnitude its urgency, its causes, its relationship. In order to diagnose the problem correctly, a manager must obtain all pertinent facts & analyse them carefully.

Generation of alternative: After defining the problem, the next in decision making is to develop the alternatives. In searching the alternatives some of the resources that can be drawn upon are past experience of the decision maker, Similarly with the problems & solution occurred in the past response of the people effected by the decision.

Evaluation/ selection of best alternative: In order to make final choice of the best alternative one will have to evaluate all possible alternatives. Peter Drucker has laid down three criteria’s to evaluate various alternatives………

Risk- Degree of risk involves in each alternative

Economy of effort- Cost, time & effort involved in each alternative.

Limitation of resources-  Physical, financial & human resources available / some of the criteria’s against which the alternatives are to be measured are quantities in nature, such as return on investment, market share, profits & so on  Qualitative- consumer attitude, employees morale, ethics of the organization etc.                      

Implementation of decision: Implementation means putting the selected alternative into action & seeing it through its completion. The process implementation starts with assigning responsibilities to person who will be involved in carrying out the decision. The possibility of any assistance to change should be examined carefully specially if its effects or conflicts with the personal values & personalities or group norms of the organization.

Review: Monitoring the review of the decision. It means the effectiveness of the implemented decision. If possible a mechanism should be built into the process to give or generate reports. 

Decision Making Process

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By Hassham

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