What are the various stages of the decision making process?

Decision Making Process:

A good decision can merely be made as a result of a rational decision making process. The different stages of the said process are as follows:

(1) Recognising and defining the problem

• Recognise and know the real problem and not the symptoms.

• Describe the problem so as to find out the conditions for its solution.

 (2) Analysing the problem

• Means classifying this and finding the facts.

• Classification makes sure that a decision actually contributes to the entire business quite than solve an instantaneous or local problem at the expense of the entire.

• Facts are essential to make a sound decision and decrease risk.

• Must describe the unknown.

 (3) Finding out the possible alternatives

• Normally problems have generally more than one option.

• Should consider all possible options for arriving at a solution including competitors’ solutions or such used into the past.

 (4) Calculating the impact of Alternatives

• Decision maker should mentally put in effect all alternatives and visualise their impact, therefore forecast what will occur when a certain forecast is adopted.

• Qualitative and quantitative both factors to be considered.

• Restrictions of each alternative to be considered.

• Techniques as marginal analysis, cost-benefit analysis and cost effectiveness can be used.

 (5) Selecting the best solution

• Finest solution is selected through comparing merits and demerits, gains and losses of every alternative.

• Should consider degree of risk, restrictions and time compulsory for implementation and availability of resources.

 (6) Implementation

• Convert decision in action.

• Communicate, make sure subordinates’ participation.

• Monitor implementation by feedback.