Being made up of rational beings, organizations are faced with the different sets of challenges that each member has to deal with every day. The changing world offers a wider range of alternatives and opportunities that each organization has to critically assess whether these are to be taken as benefits or threats. The traditional process of deciding whether it is a yes or a no to something can no longer be held viable today especially with the tougher challenges posed by globalization trends. The steps in the decision-making process still holds true to all industries but the details should be updated according to the demands of time and trend.
In this paper, we will be discussing the elements and issues involved in the process of making decisions. This paper focuses on the process involved in the business organization, as they seem to be more complex than with other organizations. This argument is based on the ground that business organizations involved more stakeholders who are directly involved in almost all transactions of the organization and thus are to be considered and consulted at all times.
Every member of the organization has to make decisions there is only one reason that best explains this fact: organizational members are rational beings who can and need to make decisions. The company janitor decides the what room should be cleaned first: the boss’ office who arrives usually during lunch time or the plant manager’s desk who arrives early but does not care so much about the messy office. The logistics manager also decides what are the delivery requirements to be scheduled the next day. The managing director decides on more complex issues that are usually beyond the authority of the middle managers.
In an organization, each member has to be given the authority or better yet the autonomy to decide on things that are within their scope of work. This will not only help the managers or supervisors in lessen the burden of spending time and energy on little things that can be decided upon by those at the lower level. Moreover this process gives the employees the opportunity to exercise critical thinking and at the same time lifting their morale as they do not need to act as robots who do things and avoid things by command. However a good decision maker is evaluated based on his 1ability to see potential meanings and relationship of facts, ability to make judgments and the skills of communicating such judgments to others for the desired results. Although everyone in the organization can be decision-makers, problems and transactions to be decided upon are to be placed in the hands of the best person who can make the best possible decision for the benefit of the organization. In fact one of the problems to be solved and to be decided upon is who is to make the decision.
ELEMENTS INVOLVED IN DECISION-MAKING
Yates has developed a guide to decision-making process that he recommends to be used as a guide before the actual decision-making process (as in problem solving) has to be carries out. This guide is referred to by Yates as the 10 Cardinal Decision Issues (Yates, Frank J.)
- Need – Yates stressed that decision-makers should have the strong ability to determine whether a decision has to be made. Vigilance is required of decision maker in determining whether an event should be treated as a problem to be to address or an opportunity to exploit. For example when a close competitor implemented a price increase, decision-makers are faced with the challenge of determining whether they are to see such event as a problem or an opportunity.
2.Investment – investment issues challenges the skill of the decision-makers on weighing costs and benefits. These investments may include material and human resources.
- Value – the value of the outcome of the decision is of primary concern since it takes into account all the stakeholders of the company or the organization. The value necessarily will vary from stakeholder to stakeholder depending on how much they would value the outcome of the decision. For example, a decision to phase out a line of product or probably to sell it will have just one general outcome but the impact of it will be different with the employees in the line, the advertising manager and other stakeholders.
- Options – options are primary considerations in the decision-making process that has to something to say whether a decision will bring success or a failure to the organization. Again options challenge the weighing and judgment ability of the decision-maker.
- Trade Offs – looking at trade off issues will require the decision-maker to examine strengths and weaknesses of the options available.
- Acceptability – because of the presence of the stakeholders, one of the issues to be resolved is the acceptability of the options or the decision to each of them.
- Mode – As stated earlier, each member of the organization is a decision-maker because each was given accountability over his or her own tasks. However issues to be decided upon are classified according to their severity (as with problems to be solved), their immediacy, importance and complexity. This nature of the things to be decided upon requires the assignment of the decision responsibility to the most fitted or able person in the organization.
- Possibilities – every angle of the issue has to be considered in order to see all possibilities. Objective evaluation of possibilities is required in order to have a clear view of the possible options and results.
- Judgment – “Decisions are shaped by predictions, opinions and projections” (Yates, Frank J.). It is not at all times that a decision is placed in the hands of a single decision-maker but there are times that it is placed in the judgment of several people. In both cases, judgment has to be strong and objective in order to come up with accurate results.
- Implementation – every decision has to be implemented because it is useless to discuss and evaluate things when there is no intention to do something about it. The implementation of the decision marks the beginning of the realization of the things foreseen.
THE DECISION-MAKING PROCESS
There are four general phases involved in the process of making decisions: the input phase, the processing phase, the output phase and the review phase (Bradsford & Stein, 1984). Each of these phases include several steps in which we are to examine in this section.
A. The Input Phase
This first phase of the process aims to perceive and understand the problem or the issue on hand. This phase involves the following steps:
- The identification and statement of the problem – the identification of the problem or understanding the situation is important in order to see what are the probable effects of the event or situation to the company. Identification of the problem/situation enables the decision-maker to know if it will or will not affect the company or the organization (Beinstock, 1984). In this phase, the decision-makers have to identify what Arnold referred to as “gaps” (Arnold, J. 1978). In the identification and statement of the problem, the decision-maker recognizes that there is something wrong and needs to be corrected, threat or threats that need to be prevented, an opportunity that needs acceptance or might be something that the company lacks and needs to be provided. These gaps are identified through the process of collecting ideas from the participants or of discussing each other’s observations and perceptions. When problems are identified or situations have been analyzed, they are listed, categorized and prioritized according to their importance and immediacy or maybe value with the organization.
- Statement of criteria for evaluation of alternatives – each participant in the decision-making process should have the opportunity to provide their ideas and perceptions as to solving a problem or of deciding on something . These are then accumulated and will be discussed and be evaluated objectively in order to come up with the best alternative. If a decision is to be made by one person, he can still survey alternatives from other employees or co-managers even without in informal conversations. However the result of this kind of decision is to be held as the responsibility of the one who decided even if he used the ideas or recommendation of others.
- Information Gathering – relevant and credible information has to be accumulated that will help the decision-maker segregate the feasible from impossible alternatives (Rubenstein, M. 1986). Such information gathering maybe come in the form of discussion with other members of the organization
B. The Processing Phase
- Development of alternatives– alternative solutions to the problem should be developed. Options are required in order to give way to a clearer view of possible outcomes. These are to be compared which options are acceptable. It is however to be stressed that quality of alternatives should be placed higher importance than quantity because much alternatives may just confuse decision-makers rather than giving them options (Whimbey and Lochhead, 1982).
- Evaluation of Alternatives – once the alternatives have been identified and weighed, each has to undergo evaluation of the participants in the decision-making process. Again the process of evaluation should involve objective and sound judgment because here lies the success or failure of solving a problem.
- Development of Solution – after the thorough evaluation of alternatives, the best should be chosen as solution. Whatever alternative the panel or the decision-makers have chosen, it is still important to assess the value of its implications.
C. The Output Phase
Once the solution has been developed, it has to be implemented. The details of the plan must be organized and detailed so it will be easier for the responsible persons to implement them. It is important that the processes involved are clear and concise in order to ensure that every step taken is accurate and observed to the least detail of the plan (Bransford & Stein 1984). The implementation of the solution is better when it comes in phases with corresponding time span or the target completion of each phase. It helps to present the details of the plan in tables with the person responsible for the tasks involved are presented. This way each knows their accountability and when should they enter the scene. This process also will help in the evaluation process especially when something has gone wrong. It will be easier to pinpoint the fault area when the process is carefully divided in phases.
D. The Review Phase
The decision-making process does not end at the implementation of the solution. Indeed it is equally important as those with other steps to have the review of the implemented solution. In this phase, the steps in the solution are evaluated as to their completeness and effectiveness relative to the problem to be solved. It is in this phase where the solution will be tagged as either a failure or a success. It is in this phase that lacking elements or measures are identified, are there deviations to the set standards of implementation or is there a fault in the solution itself or just the implementation of it. Review of the solution is vital in the decision-making process and as such is to be done in the same sincerity as those with the earlier phases.
The success of the solving a problem or of decision made comes from a long and hard way. The success or failure of a decision begins from the critical identification of the problem at hand including the possible effects of the situation at hand to the organization. The identification of the players in the solutions to be implemented are also critical because in this in their sincerity and keenness to details will can possibly make or break the organization. A solution developed or formulated, no matter how systematic and good they are, will all turn to nothing if the assigned persons to carry out the steps involved does not care so much of the outcome.
A decision involves material and human resources, including time, opportunities which make process more complicated in the business set up. In this regard, it is vital that decisions have to seriously consider these elements in order to come up with the best and the most efficient solution. Finally the review phase of the process has to be placed high importance. Although this phase involves the faultfinding process, it is in this phase where opportunities for improvement are identified. By evaluating the different phases and steps in the decision-making process, we were able to see how each step connects with the others and therefore has to be considered equally important.
Arnold, J. (1978). The Seven Building Blocks to Better Decisions. New York: AMACON.
Beinstock, E. (1984). Creative Problem Solving. Stamford, CT.
Bransford, J., & Stein, B. (1984). The Ideal Problem Solver. New York: W. H. Freeman.
Rubenstein, M. (1986). Tools for Thinking and Problem solving. Englewood Cliffs, NJ: Prentice-Hall.
Schnelle, K. (1967). Case Analysis and Business Problem Solving. New York: McGraw-Hill.
1The Decision Maker. Retrieved on October 01, 2007 from http://cob.isu.edu/kreggaytes/decision_making.htm
Whimbey, A., & Lochhead, J. (1982). Problem Solving and Comprehension (3rd ed.). Philadelphia: Franklin Institute Press.
Yates, Frank J. A Game Plan to Achieve Organizational Grand Slams. Retrieved on October 01, 2007 from http://www.bus.umich.edu/FacultyResearch/Research/DecisionManagement.html