3. Definition
Decision making is the process of making choices by
identifying a decision, gathering information, and
assessing alternative resolutions.
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4. Introduction
• Effective and successful decisions make profit to the
company and unsuccessful ones make losses.
Therefore, corporate decision making process is the
most critical process in any organization.
• In the decision making process, we choose one course
of action from a few possible alternatives. In the
process of decision making, we may use many tools,
techniques and perceptions.
• Usually, decision making is hard. Majority of corporate
decisions involve some level of dissatisfaction or
conflict with another party.
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5. Steps of Decision Making
Step 1: Identification of the purpose of the decision
• 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?
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6. Steps of Decision Making
Step 2: Information gathering
• A problem of an organization will have many
stakeholders. In addition, there can be dozens of
factors involved and affected by the problem.
• In the process of solving the problem, you will have to
gather as much as information related to the factors
and stakeholders involved in the problem. For the
process of information gathering, tools such as 'Check
Sheets' can be effectively used.
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7. Steps of Decision Making
Step 3: Principles for judging the alternatives
• In this step, the baseline criteria for judging the
alternatives should be set up. When it comes to
defining the criteria, organizational goals as well as
the corporate culture should be taken into
consideration.
• As an example, profit is one of the main concerns in
every decision making process. Companies usually do
not make decisions that reduce profits, unless it is an
exceptional case. ●●●
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8. Steps of Decision Making
Step 4: Weigh the evidence
• Draw on your information and emotions to imagine
what it would be like if you carried out each of the
alternatives to the end. Evaluate whether the need
identified in Step 1 would be met or resolved through
the use of each alternative.
• As you go through this difficult internal process, you’ll
begin to favor certain alternatives: those that seem to
have a higher potential for reaching your goal.
●●●
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9. Steps of Decision Making
Step 5: Choose among alternatives
• Once you have weighed all the evidence, you are
ready to select the alternative that seems to be best
one for you. You may even choose a combination of
alternatives.
Step 6: Take action
• You’re now ready to take some positive action by
beginning to implement the alternative you chose in
Step 5.
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10. Steps of Decision Making
Step 7: Review your decision & its consequences
• In this final step, consider the results of your
decision and evaluate whether or not it has
resolved the need you identified in Step 1. If the
decision has not met the identified need, you may
want to repeat certain steps of the process to
make a new decision.
• For example, you might want to gather more
detailed or somewhat different information or
explore additional alternatives.
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12. Importance of Decision Making
• The meaning of decision-making is strongly
connected with management roles. Whether you
create plans or organize discussions, give orders
or advice, approve plans or reject them, every
action involves decision-making..
• The importance of decision making lies in the way
it helps you in choosing between various options.
Before making a decision, there is a need to
gather all available information and to weigh its
pros and cons. It is crucial to focus on steps that
can help in taking the right decisions.
●●●
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14. 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;
especially, when you get into a lot of confrontation
after making the tough decision.
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