Decision Making and Risk-Taking

Decision Making
and Risk-Taking
o
STEPS IN DECISION MAKING
THE DECISION MAKING PROCESS
PLANNING FOR DECISION MAKING
INTRODUCTION TO PLANNING
IMPORTANT ELEMENTS OF PLANNING
Steps in Decision
Step 1: Define the
Making
Problem
1.1 Size up the situation.
1.2 Set goals and priorities ( Ask yourself )
Step 2: Reevaluate the situation

2.1 Consider your options. The moment the problem has been identified, ask yourself
2.2 Dont make unnecessary decisions. Be aware that the best decision may be to do
nothing at the moment. But dont delay just to avoid making a tough or pleasant decision.
Step 3: Gathering Information. In order to solve a problem, you should make yourself
an expert on
the subject.
3.1 Use your time wisely. If a decision is not immediately necessary, use your time to gather
necessary data.
3.2 Seek advice. Secure help from other people whom you think can help you. Dont be shy
to
admit that you dont know the problem.
3.3 Use all resources. Use the library, 201 files of employees, or any source of facts on the
problem.
Step 4: Think of Alternatives. At this stage of the decision making process, any idea
is a good idea.
4.1 Be Open. Do not limit yourself to ideas that sound reasonable. Try brainstorming
and list everything that comes into your mind.

4.2 Dont judge. Avoid jumping to conclusions. Gather all ideas before considering your alternatives.
Step 5: Choose an alternative.

measures up against others.
Test each alternative carefully, to see how it
5.1 Think Ahead. Try to imagine the consequences of each alternative. Ask yourself, What
will happen if? Be thorough, and give each plan a chance.

5.2 Be Practical. Be sure your plan can be carried out.
5.3 Be creative. If necessary, you can combine the best features of several ideas.
Step 6: Put your Decision to Work
6.1 Take action. A good decision is nothing until it is put into effect.
6.2 Inform others. Be sure that all personnel who will be affected by the decision are well
informed.
6.3 Follow up your plan. Be sure to check from time to time to see that any changes you made
are still in effect or to see if adjustments are needed.
THE DECISION MAKING

PROCESS
1. Recognize the problem.
According to Katey Walker, Nayda I. Torres and Josephine Turner:
The decision-making process starts by recognizing that a problem exists; something has
to be changed in the situation and there are possibilities for improvement. Big problems musts
often be broken down into smaller, easier to deal with, components.
2.
Analyze the problem.
Once the problem is identified, study it carefully to find exactly what is causing it. Again,
be as specific as possible.
3.
Consider your goals.
Consider the goal you want to attain. The goals you select are influenced by the values
you have what is important to you. Becoming more aware of your values and the priorities you
place on them will help you see more clearly what is desired.
THE DECISION MAKING

PROCESS
Look for alternatives.
4.
Consider as many alternatives as possible. Try to look for more possibilities than the
obvious or habitual ones. If the decision is very important whether human or financial
matters it will be better to spend more time and effort in looking for a solution or making a
good choice.
5. Select the best alternative.
After carefully analyzing and evaluating every alternative, select the best one, having in
mind the values that are important to you, the goals you are working toward, and the resources
you have to work with.
6. Put your decision into action.
Making a decision doesnt usually end with selecting the best alternative. You must put
your decisions into action. Normally, people carry out their own decisions. Sometimes, however,
group action by members of the firm, or other groups, must be generated.
THE DECISION MAKING

PROCESS
7. Accept the responsibility.

You need to accept the responsibility and face whatever consequences for making the
decision. Dont be afraid to make a decision just because you have to revise it again. It is normal
to change or adjust your decision because of the fast changing needs of the times.
8. Evaluate your results.
The outcome or result of your decision must be evaluated to determine its relevance and
effectiveness.
Check if the
information
is
RELEVANT
and UP-TODATE
Identify
Objectives
Collect information
and ideas
Analyze
Information &
Ideas
Communication
is essential.
Everyone needs
to know what is
going on and be
clear about
their own part.
They need to
feel involved
and motivated.
Choose Action /
Make Decision
Communicate &
Carry out
Decision
Outcome &
Result
Several
possibl
e
courses
each
needs
to be
evaluat
ed to
find the
best
option.
Evaluate &
Report
This stage is
essential; it
must be clear
the decision
has been
effective.
Planning for Decision-Making

Four (4) Major Benefits of Planning:
1. Planning allows the establishment of independent goals.
2. Planning provides a standard of measurement.
3. Planning converts values to action.
4. Planning allows limited resources to be committed in an orderly way.
Planning
o
o
STEPS IN DECISION MAKING
THE IMPORTANCE OF PLANNING
Introduction to Planning
Planning is the most basic of the management functions. This involves the selection from
among the alternatives of future courses of action for the business firm as a whole and each
department / division / unit within it. The plan can be simple or complex, long-term, middle-term,
and short-terms. Normally, the lower management group prepares short-term plan, the middlemanagement group prepares middle-term plans and the top management group prepares longterm plans.
Planning is deciding in advance what is to be done, when, where, how and by whom it is to
be done.
Important elements of planning

According to M.U. Qureshi:
1. The essence of planning is looking ahead. It is always concerned with

future.
2. It involves a pre-determined course of action.
3. This action course is determined after a careful study of alternative
courses.
4. It is a continuous and integrated process.
5. It always has a dimension of time.
6. Its main objective is to achieve better results.

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Decision Making

STEPS IN DECISION MAKING

THE DECISION MAKING PROCESS

PLANNING FOR DECISION MAKING

IMPORTANT ELEMENTS OF PLANNING

Step 2: Reevaluate the situation

admit that you dont know the problem.

and list everything that comes into your mind.

Step 5: Choose an alternative.

Test each alternative carefully, to see how it

will happen if? Be thorough, and give each plan a chance.

THE DECISION MAKING

According to Katey Walker, Nayda I. Torres and Josephine Turner:

Analyze the problem.

Consider your goals.

THE DECISION MAKING

According to Katey Walker, Nayda I. Torres and Josephine Turner:

THE DECISION MAKING

According to Katey Walker, Nayda I. Torres and Josephine Turner:

7. Accept the responsibility.

Planning for Decision-Making

STEPS IN DECISION MAKING

THE IMPORTANCE OF PLANNING

Important elements of planning

1. The essence of planning is looking ahead. It is always concerned with

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