DECISION MAKING

- Decision making is the process of making choices by identifying a decision, gathering information, and
assessing alternative resolutions. Using a step-by-step decision-making process can help you make more
deliberate, thoughtful decisions by organizing relevant information and defining alternatives

Characteristics of Decision Making

1. Rational-thinking

Rational thinking is a process in managerial decision making that helps us to make sound decisions. It
involves systematically analyzing options and choosing the best course of action based on logic and
evidence. To think rationally, we must first identify our goals and objectives.

2. Process

Many people view decision making as a cold, rational process. However, there is much more to it than
simply choosing the most logical option. In reality, decision making is influenced by a variety of factors,
both conscious and unconscious. For example, our emotions play a role in the decisions we make, as do
our personal values and beliefs.

3. Selective

A key characteristic of managerial decision making is that it is selective. That is, deciding involves picking
the best options. There are many factors that influence what gets selected, including the clarity of the
options, the relevance of the criteria, and weighing the various factors.

4. Purposive

A purposive approach to decision making is one that is based on the specific goals and objectives of the
individual or organization. This type of decision making takes into account the desired outcome of the
decision, and considers all of the available options in order to select the best possible course of action.

5. Positive

Decision making process in management is an essential skill in any area of life, whether you're choosing
what to eat for lunch or deciding which company to work for. While there are many different
approaches to decision making, there are some common characteristics that tend to lead to positive
outcomes.

6. Commitment

If you want to make successful decisions, it is crucial that you have commitment. This means having the
drive to see the decision through, even when it gets tough. It also means being able to defend your
decision to others, even if they do not agree with you.

7. Evaluation

Evaluation is a key characteristic of good decision making. This involves considering all of the options
and weighing their pros and cons before making a choice. It is important to be as objective as possible
when evaluating the different options, and to look at the situation from all angles.

Decision Making Approaches

There are different approaches managers can use for decision-making to come to an effective choice in
order to achieve desired goals. Generally, there are three approaches to managerial decision making
which are mentioned below.

The Classical Approach

The classical approach to decision-making is also known as a prospective approach since it makes the
assumption that managers are logical and rational. Therefore, they will make decisions that are best for
the company.

It explains to managers the decision-making process. This method makes the assumption that all issues
are well stated and that all data necessary to make a decision is available.

The Administrative Approach

The descriptive model of decision-making, often known as the administrative approach, states that
decision-makers are unable to obtain comprehensive and accurate information. They are limited by
restricted rationality and have a tendency to be satisfying.

This method makes the assumption that managers may have to make judgments in scenarios that
involve ambiguity, uncertainty, and non-programmed choices. Decision-makers are restricted by the
limits of their reason. Its potential is constrained by beliefs, values, attitudes, aptitudes, skills, routines,
credentials, knowledge, and resources. The administrative method also argues that decisions are
satisfying and that people tend to look for the next option only until they find one that is at least
acceptable.

The Rational Approach

In the rational approach, the function of decision-making is completed by a step-by-step process where
managers identify the best alternative (s)

Decision making techniques

Step 1—Identify the Problem

The first step to a better decision-making model is to identify the problem causing you to make a
decision. When we first face a problem or issue, pinpointing it and the choices that have to be made to
resolve the problem are difficult.In this step, you want to analyze the current situation and paint a
picture of what’s happening. Start with the impact the issue has on a particular situation and the
consequences of not solving the problem.

Step 2—Summarize the Problem

After you’ve examined the scenario and can clearly explain the situation, summarize what you’ve
analyzed into a simple problem statement by filling in the blank: “The problem I’m trying to solve is
_______.” This puts your issue in perspective and provides a clear path on how to solve it.

Step 3—Ask Why This Is a Problem

Finally, ask yourself why this is a problem and do so repeatedly until you land on an obvious source.
Once you have a firm understanding of the issue at hand, you can now gather information. A good rule
of thumb to follow is to consistently gather more information than you’ll use as a decision because a
decision is only as good as the information you have available to you.

Every strong decision is strong in proportion to the surplus of details you choose. Once you’ve done your
research, you’ll now be able to identify some apparent alternatives to choose from, which will result in
an informed decision.

Step 4—Weigh Your Options and Possible Outcomes

After figuring out the alternative solutions you find valuable, you need to weigh the options using the
evidence you’ve gathered. Always keep in mind the benefits and consequences you will face in the light
of each alternative and think about maximizing the potential benefits.

Step 5—Act on Your Decision

Finally, an essential part of any decision-making process is acting on that decision and truly believing it’s
the best decision possible. Make sure to follow through with the choices you make and reassess if need
be down the road. You should also consider possible alternatives as part of a contingency plan is

Characteristics of a good decision

1. Good decisions positively impact others.

This statement may seem obvious, but if it were, bad decisions wouldn't exist. After all, anybody who is
adversely affected by a decision immediately classifies that decision as bad. Of course, now you just
need to find a common definition of "positive."

2. Good decisions are replicable.

People want to mimic a bad decision like a case of herpes. Enough said (and feel free to tweet that).

3. Good decisions foster opportunity.

An effective decision empowers others to act.

4. Good decisions include others.

Arriving at a conclusion that serves the company is a process. There are boxes to check off that ensure
accountabilities are established and authorities are met.

5. Good decisions are executable.

Integral to any decision is clarity around what that decision is. If there's ambiguity about what to do next
then that decision isn't clear enough. Clarity minimizes uncertainty, and although this may sound like an
obvious statement, remember that what's apparent to you may be newfound insight to others.

6. A good decision is systematic.

Ruling out the good criteria from the bad requires time, resources, clear (there's that word again)
requirements as to what the goal is and judgment to estimate the probability of success.

7. Good decisions are accountable.

With clarity also comes accountability. It's not easy hiding behind something that outlines, in detail, the
roles, responsibilities or expectations associated with a new decision. Tack on the timeline, assets
necessary and the conditions that define success and you're pretty much on a one-way highway to
execution without any U-turns (my metaphor for accountability avoidance).

8. Good decisions are pragmatic.

Humans are creatures of emotion, which means eliminating emotion from a decision isn't feasible.
However, what can be eliminated are self-serving emotional biases. In the SEAL Teams, for example,
there were three criteria upon which decisions were made: The mission, the team, the individual.

Consequences of making the wrong decision

Immediate setbacks: In the short term, a wrong decision might lead to setbacks, such as
financial loss, missing opportunities, or immediate stress and frustration.

Wasted time and resources: Wrong decisions can waste time, money, effort, and resources
that could have been allocated more effectively.

Damage to relationships: In personal or professional settings, poor decisions may strain

relationships or trust, particularly if others are affected by the consequences of those decisions.

Reputation damage: Continuously making wrong decisions can harm one's reputation, whether
in personal life or within professional or social circles.

Missed opportunities: Poor decisions might lead to missed opportunities or hinder progress
towards personal or professional goals.

Increased stress and anxiety: The aftermath of a wrong decision can lead to increased stress,
anxiety, and a sense of regret or self-doubt, impacting mental well-being.

Long-term consequences: Some wrong decisions can have far-reaching effects, impacting not
just the immediate future but long-term outcomes and opportunities.

Lack of growth or progress: Consistent wrong decision-making without learning from those
mistakes can hinder personal growth, learning, and development.

By:

Mark Gapoy Torrechilla

Radmart Tangente