What are the 7 steps of decision making?

In our regular day to day activities whether in personal lives or in our professional lives, we very often face situations filled with choices or alternatives. Choices may involve options for solution to a problem in hand, choosing a path at cross road (such as go or no-go decisions) etc. And we need to decide the seemingly best option or alternative to move forward. Decision making is one of the most important basic management skills for all of us. It is a cognitive ability. It can differ from person to person.

Making decision which are timely and which are based on careful analysis of various information is critical to our success. Decision making is a habit as well as a process. Decisions should neither be taken in haste nor be procrastinated indefinitely. Decision making can be hard sometimes

While the individual cognitive ability for decision making will depend on each individual, however, we can follow a well-structured process for decision making as suggested below:

[Please draw and insert a flow diagram showing the below steps]

1. Identify the decision to be made 

• What is the problem on hand
• What is the objective to be achieved 
• How the decision will impact people or the organization
• Urgency and criticality of the decision

2. Gather relevant information

It is important to gather all relevant information about the decision to be made with regards to above mentioned points. It will include identifying all various parties, stakeholders who will part of the decision, how the decision will be impact different groups or individuals or the organization etc.

3. Identify the options

We need to identify clearly all the available alternative options, paths or actions for the decision to be made. 

4. Evaluate the evidence

Evaluating all the options with their pros and cons needs to be carried out

5. Choose among alternatives

Choose the best alternative based on the above careful analysis of all the alternatives.

6. Implement the chosen alternative

Implement the actions associated with the alternative path or option being selected.

7. Analyse the results

We need to analyse the outcome achieved after the implementation of the actions selected in the above step.

Some of the tools and techniques which are used in the process of decision making includes but not limited to are market research, cost-benefit analysis, swot analysis, decision tree, T-chart, Pareto analysis, 5-why’s analysis etc.

Conclusion

Timely and well-thought decision making is extremely important for success in today’s time. We must take a logical approach for decision making. We must also inculcate the habit of decision making.

February 10, 2017  |  5 Min Read

In general, the decision making process helps managers and other business professionals solve problems by examining choices and deciding on the best route to take. Using a step-by-step approach is an efficient way to make thoughtful, informed decisions that positively impact your organization’s short- and long-term goals.

The business decision making process is commonly divided into seven steps. Managers may utilize many of these steps without realizing it, but gaining a clearer understanding of best practices can improve the effectiveness of your decisions.

Steps of the Decision Making Process

The following are the seven key steps of the decision making process.

1. Identify the decision

The first step in making the right decision is recognizing the problem or opportunity and deciding to address it. Determine why this decision will benefit your customers or fellow employees.

Next, it’s time to gather information so that you can make a decision based on facts and data. This requires making a value judgment, determining what information is relevant to the decision, and how you can get it. Ask yourself what you need to know to make the right decision, then actively seek out anyone who needs to be involved.

“Managers seek out a range of information to clarify their options once they have identified an issue that requires a decision. Managers may seek to determine potential causes of a problem, the people and processes involved in the issue, and any constraints placed on the decision-making process,” according to Chron Small Business.

3. Identify alternatives

Once you have a clear understanding of the issue, it’s time to identify the various solutions at your disposal. You likely have many options when deciding, so it is essential to come up with a range of options. This helps you determine which course of action is the best way to achieve your objective.

4. Weigh the evidence

In this step, according to management experts Phil Higson and Anthony Sturgess, you’ll need to “evaluate for feasibility, acceptability and desirability” to know which alternative is best. Managers need to be able to weigh the pros and cons, then select the option that has the highest chance of success. It may be helpful to seek a trusted second opinion to gain a new perspective on the issue.

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5. Choose among alternatives

When it’s time to make your decision, be sure you understand the risks involved with your chosen route. You may also select a combination of alternatives now that you fully grasp all relevant information and potential risks.

6. Take action

Next, you’ll need to create an implementation plan. This involves identifying what resources are required and gaining support from employees and stakeholders. Getting others on board with your decision is a key component of executing your plan effectively, so be prepared to address any questions or concerns.

7. Review your decision

An often-overlooked but important step in the decision making process is evaluating your decision for effectiveness. Ask yourself what you did well and what can be improved next time.

“Even the most experienced business owners can learn from their mistakes … be ready to adapt your plan as necessary, or to switch to another potential solution.”

CHron Small Business

If your decision didn’t work out the way you planned, you may want to revisit some of the previous steps to identify a better choice.

Common Challenges of Decision Making

Although following the steps outlined above will help you make more effective decisions, there are some pitfalls to look out for. Here are common challenges you may face and best practices to help you avoid them.

• Having too much or not enough information. Gathering relevant information is key when approaching the decision making process, but it’s important to identify how much background information is truly required. “An overload of information can leave you confused and misguided, and prevents you from following your intuition,” according to Corporate Wellness Magazine.

In addition, relying on one single source of information can lead to bias and misinformation, which can have disastrous effects down the line.

• Misidentifying the problem. In many cases, the issues surrounding your decision will be obvious. However, there will be times when the decision is complex and you aren’t sure where the main issue lies. Conduct thorough research and speak with internal experts who experience the problem firsthand to mitigate this. Corporate Wellness Magazine says it will save you time and resources in the long run.
• Overconfidence in the outcome. Even if you follow the steps of the decision making process, there is still a chance that the outcome won’t be exactly what you had in mind. That’s why it’s so important to identify a valid option that is plausible and achievable. Being overconfident in an unlikely outcome can lead to adverse results.

Decision making is a vital skill in the business workplace, particularly for managers and those in leadership positions. Following a logical procedure like the one outlined here and being aware of common challenges can help ensure both thoughtful decision making and positive results.

If you are interested in business management topics like these, consider Concordia University, St. Paul’s online MBA program. You can also download our free guide, “Climbing the Corporate Ladder: Your Guide to the MBA and Beyond,” for an in-depth look at the value of the MBA.

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