Question

Describe the 8 steps in decision making process.

Is there a difference between wrong decisions and bad decisions? How do you think managers can improve decision making skills?

Answer 1

Soln. Eight steps in the decision making process are listed below -

1. First step in the decision making process is defining the problem statement.

2. Second step involves identifying the factors that can affect the decision.

3. Third step involves assigning weight to each criteria, which is defined in step two, I means ranking the items on the list from most important to least important.

4. Fourth step is developing alternative that means listing all possible outcomes in regards to the problem, so essentially different options.

5. Next step is analyzing each alternative considering all the pros and cons.

6. Then, after doing analysis of all the alternatives, next step is to select the best and most effective alternative.

7. Then, after selecting the best alternative, next step is to implement the approach.

8. And finally, after implementing the option, next step involves analyzing the effectiveness of the alternative.

Yes, bad and wrong decisions are two different way of selecting the alternative decision. A wrong decision is the best guess when we do not have the complete information.It is a decision taken in spite of being warned of its failure. On the other hand, bad decisions are decisions taken due to unforced errors.

Managers can improve decision making skills by following below mentioned approach/technique -

1. By performing Cost-Benefit Analysis

2. By narrowing down the options considering the pros and cons factor effectively

3. By doing proper research

4. By planning in advance

5. By practicing conflict management