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Decision Making Process

What is a Decision making Process?

A decision-making process includes the series of steps taken by a manager or another individual to initiate specific actions that meet certain needs. Ideally, decisions are made based on analyses of objective facts, supported by various tools and business intelligence (BI). Decision-making processes play an important role in determining both organizational and management activities. Decisions are made at every management level that affect whether or not business goals are met. In addition, decisions reflect the functional core values that an organization adopts to guarantee optimal controllability and growth.

What is a Decision making Process?

A decision-making process includes the series of steps taken by a manager or another individual to initiate specific actions that meet certain needs. Ideally, decisions are made based on analyses of objective facts, supported by various tools and business intelligence (BI). Decision-making processes play an important role in determining both organizational and management activities. Decisions are made at every management level that affect whether or not business goals are met. In addition, decisions reflect the functional core values that an organization adopts to guarantee optimal controllability and growth.

Different options or directions are possible in every business situation. The variety of alternatives for each action makes the decision-making process a critical element of managing a successful business. It is therefore not surprising that the decision-making process is an integral part of modern management and is seen as the primary function of general management.

Every manager consciously and unconsciously makes hundreds of decisions. For managers it is therefore a reasoning process based on the knowledge, assumptions, preferences and beliefs of the decision maker. Each decision-making moment produces a final choice. The decision-making process is a continuous and indispensable part of the management of organizations and business activities.

Making decisions leads to different types of outcomes, challenges and successes. There are several approaches to decision-making, such as proactive and reactive decision-making. Proactive decision-making involves anticipating problems and events, and taking action to work around those problems and maximize successful outcomes. Reactive decision-making involves taking actions after an incident or problem occurs.

Decision-making process techniques

Techniques to support the decision-making process are divided into two categories: individual and group decision-making techniques. Examples of group decision-making techniques are the consensus method, voting, the Delphi method or participatory decision-making. When difficult decisions have to be made in daily life, many people use a list of pros and cons. This is a tool aimed at individual decision-making. The TDODAR decision-making model is also a decision-making tool. This model was originally developed for pilots in threatening situations.

It is believed that when people are rational beings, free to make their own decisions, they behave according to relational choice theory. This theory states that individuals consistently make choices that lead to the best outcome for that individual, while taking into account all available considerations. An example of a method to support the making of considerations is the cost-benefit analysis. In reality, however, there are multiple factors that can influence the decision-making process and lead people to make irrational choices. A rational decision is generally seen as the best decision to achieve set goals and results.

The decision-making process consists of several steps, depending on the method used. However, the same basic steps are reflected in all methods. The first step involves identifying a problem or issue on which to make a decision. After that, it is important to collect as much relevant information about this issue as possible and to identify the effect of various decisions. In step three, the alternative choices are evaluated and a final choice is made. The decision is then implemented in the organization, after which the situation and the impact of the decision are monitored. A rational decision-making process has several extra steps, such as weighing criteria and assessing options based on data.

Decision-making process tips and tricks

What are the most effective models and methods to support the decision-making process? How can I optimize my individual decision-making process? Or how do I ensure that my team makes better decisions in the workplace? How can I use the different theories of decision-making for my personal development?

Decision Making Under Uncertainty

May 17th, 2021

In this article George Chacko, among others, describes the process of decision making under uncertainty, in a practical way. After reading it, you will understand the basics of this powerful decision making tool. What does decision making under…

Impact Analysis (IA)

December 5th, 2018

This article explains the Impact Analysis in a practical way. After reading it, you will understand the basics of this powerful decision making method. What is an Impact Analysis? In 1996, American software engineers Robert S. Arnold and Shawn A.

Multiple Criteria Decision Analysis (MCDA)

August 26th, 2018

This article provides a practical explanation of the concept of Multiple Criteria Decision Analysis (MCDA). After reading it, you will understand the necessity and the benefits of Risk Analysis. What is a Multiple Criteria Decision Analysis (MCDA)? A Multiple-Criteria…

Risk Analysis

August 12th, 2018

This article provides a practical explanation of the concept of Risk Analysis. After reading it, you will understand the necessity and the benefits of Risk Analysis. What is Risk Analysis? the definition Organisations are often exposed to countless threats…

Decision Matrix Analysis

June 26th, 2018

This article explains the Decision Matrix Analysis in a practical way. After reading it, you will understand the basics of this powerful decision making method. This article also contains a downloadable and editable Decision Matrix Analysis template. What is a…

Monte Carlo Simulation

June 13th, 2018

This article explains the Monte Carlo Simulation in a practical way. After reading it, you will understand the basics of this powerful Decision Making tool. What is the Monte Carlo Simulation? The Monte Carlo Simulation is a computer-operated technique in…

Blindspot Analysis

June 5th, 2018

This article explains the Blindspot Analysis in a practical way. After reading it, you will understand the basics of this powerful Decision Making tool. What is a Blindspot Analysis? The Blindspot Analysis uncovers dangerous, incomplete, incorrect and outdated assumptions that…

What-If Analysis

January 18th, 2018

This article explains the What-If Analysis or Scenario Analysis in a practical way. After reading it, you will understand the basics of this powerful Decision Making tool. What is a What-If Analysis? All throughout the day, people make decisions; at…
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