Wise Businessman Makes Wise Decisions.
Decision making is a process of selecting one among options. We can relate it to ourselves as well. For example, suppose you want to buy a new car. To decide on which car to buy, you will have to consider a few things such as budget, color and brand preference and more. Similarly, people make decisions in business keeping few things in mind. In fact, there is a whole process of decision making which people should consider before reaching a final point.
A Five-Step Decision-Making Process Explained
1. Problem Identification: – The process of decision-making should always begin with the identification of the problem. The step, in fact, is the most crucial as many a time the problem is but a symptom. For example, High Blood pressure in a human body is not a problem but eventually a symptom of other problem. Therefore in business, manager should perform a diagnostic analysis to identify the problem which can enhance his chances to solve it.
2. Problem Analysis: – Problem analysis or “Restricting factors” is crucial for finding the cause of the problem. Once “Restricting Factors” analyzed, they can be changed or removed to solve the problem and achieve the set goals. For example, the manager of a company whose sales have declined will need to find Restricting factors such as poor advertising, inappropriate supply chain system, and poor after sales services that led to the decline.
3. Developing Alternative Solution: – This step demands innovative thinking and creativeness. The manager has to think every possible aspect to find a solution. Therefore, he makes a list for every possible solution so that he can weigh every solution in the end which can accomplish his goal. For selecting the best among the alternatives, the manager should use the divergent thinking technique which prefers:
(a) Quality over quantity
(b) A larger number of ideas for the best idea
4. Evaluating Each Alternative: – The manager needs to compare each alternative very sharply. He needs to do SWOT analysis for this to select the best idea which can increase sales which further can lead to increase in profits.
5. Make Decision: – This is the final step in the decision-making process. The idea should be implemented soon after being selected. However, the other ideas should not be written off. The other options have been evaluated and can replace the original idea if it fails. For example, if it fails to increase sales and profits, the other ideas come into consideration and the whole process starts again from scratch.
Conclusion: – The process of decision-making may seem to be very easy. In reality, it is not that easy. Your further goals and targets depend upon your decision-making capabilities. If you are capable of making the right decision at the right time and right place you will definitely succeed in your endeavor.