What are the 7 steps of Decision Making


Meaning of Decision Making

Decision making is simply a process used by managers in taking action for solving the problem. It is an integral part of the management system of the company which aims at improving efficiency. Decision making is the one through which managers are able to take right decisions at right time. Taking decisions is the core part of every organization management team. If any decision is taken wrong then it would be having negative consequences on the organisation.

It may affect its overall functioning making it hard for organisations to attain their goals. Decision making process makes it possible to choose the right action among different alternatives available. This right decision selection makes it easy to properly manage all business affairs and easily attain objectives. Decision making is a continuous and dynamic activity for every business.

It must be ensured that people of sound mind and creative thinking should be involved in the decision-making process. Decision-making process involves a series of steps to be followed properly to take better action. In today’s time, the organisation involves a large number of peoples in their decision making.

Every decision making process follows a series of systematic steps to arrive at a better conclusion. These steps are very important to take the right action at the right time by properly analysing different alternatives. These are discussed below:

7 Steps of Decision Making

8 Steps in Decision making
8 Steps in Decision making

Problem Detection

The first and foremost step in good decision making is to identify the problem. This is the basic requirement of every decision making process. Unless and until the business is able to recognise its problems properly, it can’t handle them. If the business is not able to handle its problems timely and properly, it can have adverse effects on business. So, it is very important that problems are identified by the decision making process.

Understanding the Problem

The next step is to do properly diagnosis of problem. It involves properly understanding the nature of the problem. Root causes of problems are identified for better understanding. Attempts are made to find out why problem have occurred, who all are affected by it, what are its causes and what are its effects if not handled timely.

Acquiring Information

After understanding the real causes and nature of problems, information is collected from different sources. Information is collected both internally and externally from the organisation to properly study the factors relating the problems.

This information gather is used for better understanding and find out the proper solution timely. Business use tools like ‘Check Sheet’ for effective collection of relevant and useful information.

Establish Different Solutions

The next step is concerned with finding out the different possible ways of handling the problems. It aims at creating possible solutions for particular problem. Once information is gathered, now the collected information is properly studied to arrive at conclusion.

Here, ultimately solutions to the particular issues of organisation are developed from different perspectives. Here creativity of peoples involved in decision making has an important role. It helps them in developing numerous solutions. More are the solution developed; more are the chances of having good decision making.

Analysing Alternatives

This involves properly evaluating each and every solution developed to handle the problems. All the alternatives already established in previous step are analysed from different perspectives. Strong and weak points of each and every solution developed is checked properly. It helps in easily judging the most effective alternative for managing problems. This is the most important and supportive step in good and effective decision making process.

Choosing the Best Solution

In this step, best and the most convenient solution among large number of alternatives available is shortlisted. Attempts are made to choose the one which can effectively handle the problem. It is the core of good decision making.

If proper solution is not selected then it can have long term adverse effects. The solution that is best suited in accordance with company needs and objectives are chosen. Methodologies used for evaluating alternatives make it easy and convenient to choose the best alternative.

Applying the Decision

This step simply involves implementing the shortlisted alternatives. Decision is of no use if it is not applied timely as it will lose its effectiveness. Once the best solution is determined using different methodologies, it should be implied properly and timely. Everything should go as per your decisions taken to arrive at effective conclusion.

Evaluate the Results

This is the last step in the process of decision making. It is here where the performance and effectiveness of decisions made by are analysed. It checks the outcomes of the decision and whether it is able to solve the problem properly or not.

Efforts are made to find out the shortcomings of decision in tackling the problems and then correcting them. If decision is found inaccurate in handling the problem, then the different alternative is chosen and implied.