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Steps in Decision-Making

Scientific decision-making involves the following stages:

(i)    Defining the problem.
(ii)    Analyzing the problem.
(iii)    Collection of data.
(iv)    Developing alternatives.
(v)    Review of key factors.
(vi)    Selecting the best alternative.
(vii)    Implementing the decision.
(viii)    Follow up.


(i)    Defining the Problem. Sufficient time should be spent on defining the problem as it is not always easy to define the problem and to see the fundamental thing that is causing the trouble and that needs correction. Practically, no problem ever presents itself in a manner that an immediate decision may be taken, otherwise the manager will answer the wrong question rather than the core problem. Clear definition of the problem is very important as the right answer can be found only to a right question.

(ii)    Analyzing the problem. After clearly recognizing the problem, the next phase of decision-making is the analysis of problem which involves classifying the problem and gathering information. Classicization’s necessary in order to know who should take the effectiveness of the decision may be jeopardizes. The problem should be classified keeping in view the following factors.:

(a)    the nature of the decision, i.e. whether it is strategic or it is routine,
(b)    the impact of the decision on other functions,
(c)    the futurity of the decision,
(d)    The periodicity of the decision, and
(e)    the limiting or strategic factor relevant to the decision.
(iii)    Collection of Data. A lot of information is required to classify any problem. SO long as the required information is not available, any classification would be misleading. This will also have an adverse impact on the quality of the decision. Trying to analysis without facts is like guessing direction at a crossing without reading he highway signboards. Thus, collection of right type of information is very important in decision-making. It would not be an exaggeration to say that a decisions as good as information on which it is based.

(iv)    Review of Key Factors. While developing alternatives, the principle of limiting factor has to be taken care of. A limiting factor is one which stands in the way of accomplishing the desired goal. It is a key factor in decision-making. If such factors are properly identified, manager can confine his search for alternatives to those which will overcome the limiting factors. Depending upon the situation faced, the limiting factor may be inadequate funds, shortage of human resources, old machines, or lack of marketing skills.

(v)    Selecting the Best Alternative. In order to make the final choice of the best alternative, one will have to evaluate all the possible alternatives. Peter Drucker has laid down four criteria in order to weigh the consequences of various alternatives. They are
(a)    Degree of risk involved
(b)    Economy of effort
(c)    Timing of decision
(d)    Limitation of resources.

(vi)    Implementing the Decision. The choice of an alternative will not serve any purpose if its is not put into practice. The manager is not only concerned with taking a decision, but also with its implementation. He should try to ensure that systematic steps are taken to implement the decision. The main problem which the manager may face at the implementation stage is the resistance by the subordinates who are affected by the decision. If the manager is unable to overcome this resistance, the energy and efforts consumed indecision-making will go waste. In order to make the decision acceptable, it is necessary for the manager to make the people understand what the decision involves, what is expected of them and what they should expect form the management. The principle of slow and steady progress should be followed to bring about a change in the behavior of the subordinates.

(vii)    Follow Up. It is better to check the results after putting the decision into practice. The reasons for flowing up of decision are as follows:

(a)    It the decision is good one, one will know what to do if faced with the similar problem again.
(b)    If the decision is a bad one, one will know what not to do the next time.
(c)    If the decision is bad and one follows up soon enough, correctives action may still be possible.

In order to achieve proper follow up, the management should devise an efficient system of feedback information. This information will be very useful in taking the corrective measures and in taking right decisions in the future.

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