The decision-making process in business is the most important function of a manager as Peter F Drucker says that whatever a manager does, he does through decision making.
Decision making is arriving at the conclusion whether to do certain things or not to do. It is cutting of deliberations, it is also termed as that user activity is in the process of decision making one course of alternative is chosen from among the several courses of an alternative to arrive at decision.
Steps of the Decision Making Process in Business
Following steps of the decision-making process in business organization.
1. Identification of Problem
The first step in the process of decision making is the identification of the problem. Which exists in an organization.
So, There can a large number of problems in an organization but the most important among them would be the identification of the real problem troubling the organization.
2. Diagnosis of the Problem
The next step would be to diagnose the problem incorrect perspective. It is not enough that the problem has been identified.
It is equally important that the problem is diagnosed in the correct perspective.
3. Collection of Information
The next step would be the correct information regarding the problem.
It would be collected from all sources, whether they are internal and external.
Thus, The step is collected with a view to know the problem in detail and understand it thoroughly.
4. Developing Alternative Solutions
The next phase good to develop alternative courses of solutions. Here the role of creativity comes in.
The more the alternative is developed, the better are the chances the effective decision making shall be involved.
Generally, In the development of the alternatives, Efforts should be made to develop those alternatives which are not immediately Apparent.
There is seldom a problem for which is reasonable solutions do not exist.
Thus, At the time of determining the alternative solutions, all those alternatives which come to mind should be listed.
It is possible that at times and alternative which is looking not so good is selected and comes out to be the best.
Related: 22 Types of Planning in Management.
5. Evaluating Alternative Courses
Then comes the stage for the thorough evolution of the alternatives which were generated in the earlier stage.
In the process of evolution, the strong and weak points of each alternative solution should be probed.
The alternative should be evaluated in light of the objectives of the decision making and goals of the organization.
Thus, An alternative that is good otherwise but is not in accordance with the spirit, philosophy or constraint of the organization is not a good alternative.
The yardstick of ‘best’ comes on the basis of the objectives of the organization.
6. Selection of the Best Alternative
In this stage, an attempt was made to select the best alternative.
This is a point at which the solution is formally accepted an adopted.
It is the real point of the decision making of the evolution of various alternative The most workable and fit alternative is selected.
7. Implementing the Decision
The next step is to implement the decision. It is no use of making a good decision. It is equally important decisions are implemented.
All enemies, money, resources and other things shall go waste if the decision is not properly implemented.
Sometimes, the decision made is quite good but if it is not properly implemented, it does not bring the desired results.
The next step would be to get feedback as to how the decisions are bringing the results.
This can be known only from the feedback.
Thus, Feedback also reveals the drawbacks or good points of the decision and in this manner as a manager improves its decision-making capacity and effectiveness in the times to come.
Thus, we find in the steps of the decision making process in business a manager chooses and picks up on the best alternative out of several alternatives to come to a conclusion.