What Is Decision Making?
It is known that people find it hard to make a decision. Nonetheless, we all have to make decisions all the time, whether it be trivial issues like what to eat for dinner or life-altering decisions such as who to marry. There are also some of us that put off decision-making non-stop in order to find out more information on the matter or to get other people to offer their insights. On the other hand, some of us resort to the decision-making process by taking a vote or simply tossing a coin. Regardless of what our course of action might be, it is safe to say that decision-making is an integral part of modern-day management, not to mention life itself. Therefore rational and sound decision-making has become one of the primary functions of the business and management world. While every manager makes hundreds of decisions – be it consciously or subconsciously – on a daily basis, that particular decision has the potential of playing an important role in determining both managerial and organizational activities. So what is decision making? How does one’s competence to make a decision affect their part in the business world? What are decision-making skills everyone should have? Here is everything you need to know about what decision-making is and how it can impact your professional outcomes.
The Definition of Decision Making
In the most basic sense, decision-making can be defined as the act of choosing between two or more courses of action. When searching for the decision-making definition, it can also be described as a course of action purposely chosen from a set of alternatives to achieve specific goals or objectives. This process is continuous and is an indispensable component of management, regardless of its size, industry, or business activities. Simple or hard, decisions are made on a daily basis to sustain the facilities of all organizational functions.
Decision-making may also involve choosing between possible solutions regarding a problem in the wider problem-solving process. Research has shown that decisions can be made through either a reasoned or an intuitive process, or in some cases, a combination of the two.
What Is Intuitive Decision Making Based on?
Intuition is the method of using your “gut feeling” when choosing between possible courses of action. Even though people refer to intuition as a sort of a “sense,” intuition is actually a smart blend of personal core values and past experiences. Since it reflects your learnings in life, it is always worth taking your intuition into consideration when making decisions. However, since intuition cannot exceptionally be based on reality, rather your perceptions of it, it may not always result in mature outcomes.
What Is Rational Decision Making Based on?
Rational decision making, or in other words, reasoning, is known as using facts and figures when making choices. Reasoning is based on the facts in front of you and has its roots in the here-and-now. On the other hand, reasoning may lead the decision-maker to run the risk of ignoring emotions altogether, leaving the emotional and experimental aspects of the case out of the equation completely.
While intuition is considered a perfectly acceptable foundation when making a decision, it is generally more applicable to decide cases of simple nature or needs that need to be made quickly. Usually involving both intuition and rationalism, more complicated and life-changing decisions tend to require a more structured approach. It is also essential to be wary of impulsive reactions towards a particular situation.
What Are the Sequential Steps in the Decision-Making Process?
When defining the decision-making process, we can agree that it is the ultimate process of making choices by identifying a decision, gathering sufficient information on the matter, and evaluating alternative resolutions. This, in fact, is the core of the 7 decision-making steps that make up the universal concept. Using a step-by-step approach when making decisions can help you make more thoughtful, deliberate and goal-oriented decisions by organizing relevant data and defining various alternatives. Here are the 7 steps of the decision-making process that will help you achieve the most satisfying alternative between choices. To learn more on the matter, read our full-on guide on the 7 steps of the decision making process.
Step 1: Identifying the Decision
Initially, you realize that you are forced to make a decision. This first step is crucial since it will help you clearly define the nature of the decision you need to make.
Step 2: Gathering Information
Before making your decision, you need to collect some relevant information on the matter: what kind of information will you need? What is the best source of data on your matter? How can you access this information? This second step of the process involves both external and internal action, where you will go through a self-assessment, as well as finding external information online, from other people, in books, or various other sources.
Step 3: Identifying the Alternatives
Every decision brings on a set of alternatives that eventually the decision-maker is forced to land on. As you gather information, you will be able to identify several possible paths of action. You can also resort to your imagination and seek additional information to come up with new alternatives as well. Listing all possible and desirable choices is a good way of having a bird-eye view of the alternatives your process bears.
Step 4: Weighing the Evidence
Another crucial step of the decision-making process, drawing on your information and emotions, helps you imagine what it would be like if you followed through one of the alternatives to the end. Make sure to assess if the need you had identified in Step 1 would be resolved completely through the use of each alternative path. As you proceed on this complicated internal process, you will start to favor certain paths to others, especially those with a higher potential to reach your objectives. Placing the alternatives in a priority order may help you create your own value system and ease the decision making process.
Step 5: Choosing Between Alternatives
Once you have finished weighing the evidence and evaluating various outcomes, it is time to select the alternative that seems ideal for you. Sometimes you may lean towards choosing a combination of other options. The choice you land on during this step will likely be similar to the option you had placed at the top of your priority list during Step 4.
Step 6: Taking Action
This is the step where you actually take positive action and begin implementing the alternative you have chosen in Step 5.
Step 7: Reviewing the Decision & Its Outcomes
This final step entails the consideration of the results and consequences, as well as the evaluation of whether or not the selection has resolved the need identified initially in Step 1. You may need to repeat certain steps of the process to make a revised decision in case it has not met the identified need. Gathering more detailed information or reprioritizing your alternatives list might be some of the steps that require a second visit.
What Can Prevent Effective Decision-Making?
While these seven steps of the decision-making process definitely help decision-makers land on the ultimate choice, there are several inevitable problems that may occur during the process and jeopardize the effectiveness of the ideal selection. When looking for answers to the question of “What is decision making in management“, it makes sense to know the setbacks that managers and stakeholders may come across while going through this procedure. Here are some of the factors that may prevent you from making the best decision:
- Not having enough information: If you have not gathered sufficient and worthwhile information on the matter you are deciding, it can feel as though you are making a decision without any solid basis. That is why it is important to take some time to gather the necessary data that will inform and enrichen your process – even if the timescale is tight. You may also resort to prioritizing the information gathered and identifying the most valuable information to you.
- Having too much information: Just as having not enough data, having an overflow of information may also cloud your view while making a tough choice. Having so much conflicting information that it becomes impossible to see the wood for the trees is referred to as analysis paralysis, and is a problem that is seen surprisingly often. You can solve this problem by getting everything together to decide what information is really important and why, whereas setting apart the data sets with a lower potential for benefitting your goal.
- Forming emotional attachments: Decisions tend to involve the prospect of change, which to some people that are attached to the status quo, may come as difficult.
- Having no emotional attachments at all: On the contrary, it is sometimes also difficult to make a decision when you simply don’t care one way or the other. In such cases, a structured decision-making process as stated above can often help to identify basic pros and cons of particular actions and force people to see the issue in another light.
Our Concluding Decision…
While Robert Frost says, “Two roads diverged in a wood, and I took the one less traveled by, and that has made all the difference,” unfortunately, not every decision is as simple as taking a random path and seeing where it will lead you – especially when you’re entitled to make a decision regarding your business. Be it a small team or a vast corporation, the success of the group depends on making sound choices and the right decisions. You can use these decision-making steps to help you make more profitable choices in the business world and prevent hasty decision-making so that you can reach educated and healthy decisions.