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.