1

Time and Human relationships in Decision making

December 11, 2008Sree Rama Rao Sales/Marketing Management

Management is the practice of consciously and continually shaping formal

organization and the art of decision making is central to doing that.
Decision making – identifying and selecting a course of action to deal with
a specific problem or take advantages of an opportunity is an important
part of every manager’s job. We all make decisions of course. What sets
the practice of management apart is the systematic, specialized attention
that managers give to decision making.

We will describe the traditional process of decision making, the factors that
go into decision making and some of the difficulties that can arise in
selecting a course of organizational action. We will conclude with an
overview of two emerging approaches to decision making game theory and
chaos theory.

Time and human relationships are crucial elements in the process of

making decision. Decision making connects the organization’s present
circumstances to actions that will take the organization into the future.
Decision making also draws on the past; past experiences positive and
negative play a big part in determining which choices managers see as
feasible or desirable. Objectives of the future are thus based in part of past
experiences. For instances declining sales of Nike products helped turn
managers’ attention to basketball and Michael Jordan.

In some cultures, human relationships take on even more importance in

deciding about business dealings than they do in the United States. For
example, the Chinese believe that even the most comprehensive plan will
always involve unforeseen problems. To solve these one must rely on a
network of relationships. Therefore, the Chinese are more interested in a
long standing and sincere commitment to working together than in
apparently perfect contracts that appear to contain no loopholes. The
Chinese believe that a signed contract marks the end of the first stage in
business dealings, not a final agreement. With his or her signature, a
signatory to any contract automatically establishes himself or herself as a
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friend with a responsibility to help maintain a win-win agreement if

difficulties arise. It is considered not only a business necessity but also a
matter of reputation and face.

A manager of course does not make decisions in isolation. While he or she

is making decisions, other decision are being made by people both within
the same organization and outside at other businesses, government
offices, and social organization. When managers project possible
consequences of their own decisions, they must be conscious that other
people’s decisions may conflict or interact with their own. Decision making,
in short, is a process that managers conduct in relationships with other
decision makers. For instance, Knight and his colleagues at Nike were
making their decisions at the same time that Michael Jordan (a
businessperson in his own right) was making his own business decisions.

Decision making deals with a problem. A problem arises when an actual

state of affairs differs from a desired state of affairs. In many cases, a
problem may be an opportunity in disguise. The problem of customer
complaints about slow delivery of orders could, for example also be seen as
an opportunity to redesign production processes and customer service.
Because managers face many problems and opportunities we will begin our
discussion by looking at the factors that help effective managers recognize
both problems ad opportunities. Then we will look at the circumstances
that lead managers to act.

For 35 African American farmers, members of a Georgia small farm

association, recognizing a problem was the first step to identifying an
opportunity. With most of their soybeans sold as animal feed for a modest
profit, the farmers were jut scraping by. Thinking globally, the farmers
contacted 84 year old long time Atlanta resident Seiho Tajiri. He agreed
that if they were to grow a better grade of soybean, there could be an
opportunity for time in his native Japan, which produces only a small
portion of the soybeans it needs. With Tajiri’s assistance, a group of the
farmers traveled to Japan in 1993 and negotiated an order for 200 tons of
soybeans from Takano Foods, the largest maker of natto, a fermented
soybean dish that is a favorite of the Japanese. Now the farmers are
looking towards increasing their global trade opportunities. They need the
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soybeans and farmers need the market.

—

Time and decision making in humans

Abstract

Decision making requires evaluating alternatives that differ on a number of

attributes. During this evaluation process, selection of options depends on the
duration of the options, the duration of the expected delay for realizing the options,
and the time available to reach a decision. This article reviews the relationship
between time and decision making in humans with respect to this evaluation
process. Moreover, the role of psychological time, as compared with physical time,
is accentuated. Five topics have been selected that illustrate how time and mental
representations of time affect decision making. These are (1) the duration of
options, (2) temporal decision making, (3) the time between having made a
decision and experiencing the consequences of that decision, (4) the temporal
perspective of decision makers, and (5) the duration of the decision process. The
discussion of each topic is supplemented by suggestions for further research. It is
shown that psychological time is often neglected in human decision making but
seems to play an important role in the making of choices.

Keywords
Time Perspective Delay Discount Time Perception Small Reward Choice
Reaction Time Task
These keywords were added by machine and not by the
authors. This process is experimental and the keywords
may be updated as the learning algorithm improves.

This article was written as part of the “European Platform for Life
Sciences, Mind Sciences, and the Humanities” initiative of the Volkswagen
Foundation.

References

1. AINSLIE, G. (1992). Picoeconomics: The strategic interaction of successive

motivational states within the person. Cambridge: Cambridge University
Press.Google Scholar
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2. ALLAN, L. G. (1998). The influence of the scalar timing model on human

timing research. Behavioural Processes, 44, 101–117.CrossRefGoogle Scholar

3. ARIELY, D., & LOEWENSTEIN, G. (2000). The importance of duration in judgment

and decision making. Journal of Experimental Psychology: General, 129, 508–
523.CrossRefGoogle Scholar

4. ARIELY, D., & ZAKAY, D. (2001). A timely account of the role of duration in
decision making. Acta Psychologica, 108, 187–207.PubMedCrossRefGoogle
Scholar

The next step is to determine which course of action will best solve
the problem. ... Up to this point in the problem-solving, decision-making
process, leaders should have involved subordinates to research
the problem, gather information, and develop and analyze the various
courses of action.

Time Management, Decision Making, and Prioritizing. Time

management refers to a range of skills, tools, and techniques used to
manage time when accomplishing specific tasks, projects and goals. ...
A time management system is a designed combination of processes, tools
and techniques.
How Decision Making Applies to Time Management
by Christian Fisher

Related Articles
 1Long-Term Goals for Time-Management Skills
 2Be Productive in a Stressful Work Environment
 3Greatly Improve Your Motivation and Outlook
 4What Are the Best Ways to Make a Time Budget?
Several types of decisions help reduce the stress of urgency,
deadlines and high demands on your time. Poor allocation of your
time is the result of poor decisions and can lead to mistakes as
you progress toward your goals. Errors take time to correct and
 5

can lead to an ongoing cycle of more stress, greater urgency and

ultimately more mistakes. Decision-making is crucial to time
management.
Deciding on Now

We all share the same amount of linear time dictated by clocks

and calendars. Nobody has more hours in a day or days in the
year than anyone else. However, time is also a subjective
experience of what is happening to you right now. Deciding to
focus primarily on your subjective experience of time in the
present moment, and only secondarily on your clock and calendar
deadlines, gives you flexibility to get more done in a scheduled
time frame. For example, a two-hour meeting will be two hours
long no matter what happens during it. However, the value of the
meeting isn't controlled by how long it lasts but by how focused,
productive and results-oriented the participants are.

Aligning Priorities

Choosing what's most important gives you a structure by which

you can organize your day. Your daily tasks may change, but your
top goals and values are more important and lasting. Your
priorities, then, are the tasks that most align with your goals and
values. The less control you have over your priorities, the more
likely it is that you'll spend too much time on distractions rather
than productive activities. Taking time to decide on, and regularly
review, your professional and organizational goals and values will
help you prioritize your daily to-do list, while helping you realize
and eliminate less important tasks and distractions that may be
intruding on your time.
 6

Lightening the Load

Delegating or automating some of the tasks you are responsible

for is crucial to time management. Whether to outsource tasks,
automate a process within your department, use technology to
streamline some of your routine work, enlist help on tasks or
delegate them to employees are decisions that apply to how you
manage your personal workload. Pacing yourself and staying on
top of your work can keep you in control of your schedule. You can
stay focused more on the appointments and activities most
aligned with your goals.

Lifestyle Decisions

Your overall lifestyle decisions contribute to your level of effective

time management on and off the job. Eating right, getting enough
rest, staying hydrated and exercising can help you sharpen your
mind, have more energy and improve your problem-solving
abilities. Scheduling quality family time, personal growth activities
such as reading or meditation, hobbies, fun with friends, or the
occasional work vacation can help ensure you have balance in
your life. This can lead to better decisions on the job and less
stress about time.

Time management & decision making

The effective management and prioritization of tasks in time is a
key component that determines the success or failure of a project.
Underestimating this component would not always have a direct
and noticeable impact on the results – such as missing a deadline
on a project for example; but could lead to the accumulation of
less significant, however, numerous details that after a certain
 7

critical point begin to interfere with the efficiency of other

processes and lead to undesirable and ineffective results.

The training program focuses on understanding and mastering

the models and techniques for decision making, prioritization of
tasks and structuring of tasks. The effective prioritization of the
individual tasks underlies the successful execution of the overall
business process. Optimized analysis and prioritization of working
projects saves time and reduces stress and anxiety levels within
the team, resulting in increased productivity and quality of work.

The program examines and discusses models, techniques and

tools to achieve the following objectives:

increase productivity by optimizing business processes

reduce and manage stress and anxiety levels within teams

and improve emotional and working climate within the
organization

improve decision-making quality – models and techniques

optimize internal team processes – relationships and

subordination – increasing efficiency and reducing conflicts

opening up space and opportunities for employee initiative,

creativity and entrepreneurship

effective delegation

multiplication
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Time Management Tip: Managing Time During the

Decision-Making Process
posted in: Time Management | 0
Do you have trouble making decisions in a timely manner?

Wondering how you can make the decision-making process as

transparent and seamless as possible, where possible?

Today’s post shows you how to better manage your time so you
won’t waste your time (or anyone else’s for that matter!).

Here are several tips to help you make the most out of your
decision-making time:

If you’ve come to a decision, share it!

I know, this tip sounds rather simple, and it is. If you’ve come to a
decision about a problem or otherwise have an answer for
someone, share your thoughts as soon as possible. Waiting longer
to share information can cause unnecessary troubles and
headaches on both sides; your decision might actually become
irrelevant or no longer valid or necessary in some situations. Once
you’ve come to a decision, share it, and keep on movin’ on with
your life.
 9

Set a deadline for your decision.

Wrestling with a decision and need to report back to someone?

Set a deadline; otherwise you might find yourself deciding for the
next couple of years…or longer! Meet with the person and tell
them you’ll get back to them on a specific date and time with
your decision. Jot down your due date in your calendar or
schedule and keep to your word.

TAKE CONTROL OF YOUR CALENDAR.

The Order Expert’s Guide to Time Management is a hands-on

workbook that provides practical solutions to common, everyday
time management problems.

Click here to learn more about the workbook >>

Create time for yourself to come to a decision.

Sometimes the best way to finally come to a decision is to not

consciously think about a solution or answer to a problem, but to
let the item turn over in your subconscious. Give yourself both
thinking and non-thinking time to come to a decision on the
subject at hand. Translation? Permission to veg out is hereby
granted. Watch TV, daydream, play your favorite game app, take
a nap or do any other brain-off activity to give your mind a rest.

Give people permission to contact you with new

information.

It’s not always easy to come to a decision, especially when new

information becomes available or changes, directly affecting the
decision-making process! Encourage communication amongst
yourself and the people around you. This is incredibly important if
they have access to information that might make or break your
 10

timely decision. Let them know it’s ok for them to check in with
you…remember, it’s all in the interest of time.

Now to you…what do you find you struggle with the most when it
comes to making a decision? Leave a comment below and join in
the conversation!

Time and human relationships are crucial elements in the process

of making decision. Decision making connects the organization's
present circumstances to actions that will take the organization into the
future. ... Objectives of the future are thus based in part of past
experiences.
We can define human relations as relations with or between people,
particularly in a workplace or professional setting.Merriam Webster
Dictionary, accessed January 30, 2012, http://www.merriam-
webster.com/dictionary/human%20relations From a personal perspective,
there are many advantages to having good human relations skills. First, of
the top ten reasons people are fired, several reasons relate back to lack of
human relations skills—for example, the inability to work within a team,
personality issues, sexual harassment, and dishonesty.

The Process of Problem Finding

Managerial practices of problem identification, discussing research study in

operating division of large corporation.
In the organizational and business literature it was Pounds (1969) who
started to draw attention to the activity of problem formulation (at that time
he named it problem identification) and he particularly highlighted the
importance of understanding what the problem is all about rather than
focusing only on structuring it and finding solutions. Investigating
organizational problem formulation as a separate phase started in the
1980s ( Lyles and Mitroff 1980). ...
... Problem solving differs from this view as it strives to resolve a problem to
get from an actual situation to a desired one. Still, a decision has to be
made when choosing from a number of alternative problem
 11

statements (Pounds 1969;Smith 1988). Decision making means risk-taking

and thus a challenge to judgment, characteristics that are also valid for
problem formulation (Drucker 1954). ...
... The focal activity profoundly determines what problem is to be solved,
who is to be involved in further problem-solving activities, and how the
process is to be organized (MacDuffie 1997; Nickerson and Zenger 2004),
including the direction for a search and decision for solutions.
Subsequently, it affects the quality of the subsequent course of problem-
solving action (Pounds 1969;Mintzberg et al. 1976;Lyles and Thomas
1988;Smith 1989;Berthon et al. 1999). ...

Problem finding means problem discovery. It is part of the

larger problem processthat includes problem shaping
and problem solving. Problem finding requires intellectual vision and
insight into what is missing. This involves the application of creativity.
Problem finding and problem solving: Problem finding, creativity, and
giftedness

Problem finding skills are increasingly recognized in theories of creativity.

They should also be integrated into definitions of giftedness and recognized
by educators. This article reviews the research showing problem finding to
be distinct from problem solving, as well as the research supporting its role
in intrinsically motivated creative performances. Of most importance may
be that problem finding represents a family of related skills (e.g., problem
identification, problem definition, problem expression, problem
construction), each of which seems to be influenced by cognitive and
extracognitive (e.g., attitudinal) factors. Specific educational implications
and suggestions for developing the problem finding skills of gifted children
are discussed.
PROBLEM FINDING, CREATIVITY, AND GIFTEDNESS
Problem finding skills are increasingly recognized in theories of
creativity. They should also be integrated
into definitions of giftedness and recognized by educators. This
article reviews the research showing
 12

problem finding to be distinct from problem solving, as well as the

research supporting its role in
intrinsically motivated creative performances. Of most importance
may be that problem finding represents
a family of related skills (e.g., problem identification, problem
definition, problem expression, problem
construction), each of which seems to be influenced by cognitive
and extracognitive (e.g., attitudinal)
factors. Specific educational implications and suggestions for
developing the problem finding skills of
gifted children are discussed.
The research on creativity is especially interesting when it reflects
its own creativity. Examples of this are
not difficult to find; much of the current research in this area is
original, and numerous conceptual
breakthroughs have been reported in the last few years. Two are
especially pertinent to gifted education.
One involves the theory of domain specificity (Csikszentmihalyi,
1990; Gardner, 1983; Runco, 1987). In
the most detailed description of this theory, Gardner (1983)
argued that there are seven domains of ability
and possible exceptionality (i.e., verbal-symbolic, mathematical-
logical, musical, kinesthetic, spatial
PROBLEM FINDING, CREATIVITY, AND GIFTEDNESS
Problem finding skills are increasingly recognized in theories of
creativity. They should also be integrated
into definitions of giftedness and recognized by educators. This
article reviews the research showing
problem finding to be distinct from problem solving, as well as the
research supporting its role in
intrinsically motivated creative performances. Of most importance
may be that problem finding represents
a family of related skills (e.g., problem identification, problem
definition, problem expression, problem
construction), each of which seems to be influenced by cognitive
and extracognitive (e.g., attitudinal)
factors. Specific educational implications and suggestions for
developing the problem finding skills of
gifted children are discussed.
 13

The research on creativity is especially interesting when it reflects

its own creativity. Examples of this are
not difficult to find; much of the current research in this area is
original, and numerous conceptual
breakthroughs have been reported in the last few years. Two are
especially pertinent to gifted education.
One involves the theory of domain specificity (Csikszentmihalyi,
1990; Gardner, 1983; Runco, 1987). In
the most detailed description of this theory, Gardner (1983)
argued that there are seven domains of ability
and possible exceptionality (i.e., verbal-symbolic, mathematical-
logical, musical, kinesthetic, spatial
PROBLEM FINDING, CREATIVITY, AND GIFTEDNESS
Problem finding skills are increasingly recognized in theories of
creativity. They should also be integrated
into definitions of giftedness and recognized by educators. This
article reviews the research showing
problem finding to be distinct from problem solving, as well as the
research supporting its role in
intrinsically motivated creative performances. Of most importance
may be that problem finding represents
a family of related skills (e.g., problem identification, problem
definition, problem expression, problem
construction), each of which seems to be influenced by cognitive
and extracognitive (e.g., attitudinal)
factors. Specific educational implications and suggestions for
developing the problem finding skills of
gifted children are discussed.
The research on creativity is especially interesting when it reflects
its own creativity. Examples of this are
not difficult to find; much of the current research in this area is
original, and numerous conceptual
breakthroughs have been reported in the last few years. Two are
especially pertinent to gifted education.
One involves the theory of domain specificity (Csikszentmihalyi,
1990; Gardner, 1983; Runco, 1987). In
the most detailed description of this theory, Gardner (1983)
argued that there are seven domains of ability
 14

and possible exceptionality (i.e., verbal-symbolic, mathematical-

logical, musical, kinesthetic, spatial
Problem Finding Before Problem Solving
December 15th, 2016
Guest post by TJ Pavlov, Teacher & Real-World Learning Program
Coordinator a Chicago Tech Academy

We often hear how important it is to be a strong problem solver;

the skill is almost always included in 21st Century Skills for
students. One well-regarded framework for problem solving is
“Design Thinking,” a methodical process that guides stakeholders
through understanding, exploring and materializing solutions to
their challenges or products.

Something we don’t focus much on, however, is what problem we

are solving. We can solve all the problems we want but if we are
not solving the right ones, our efforts can be wasted.
 15

I coordinate all the Real-World Learning Programs at Chicago Tech

Academy, a public contract high school in the Chicago Public
School district that emphasizes technology and project-based
learning. The bulk of this work consists of leading an internship
program. Our 12th grade students spend an entire month outside
of the classroom working with corporate, philanthropic, public-
sector and entrepreneurial organizations. The goal is to give them
experiences that connect them to professionals and expose them
to work environments that can give them context for making
post-secondary plans.

I was fortunate to be invited to the Schools That Can – Education

to Employment (e2e) Symposium at NYU in early November. I
 16

had, what I thought was, a pretty clear understanding of what my

problem was. The question I posed was “How might we work with
our internship partners to better ensure our students are prepared
to fulfill their needs?”

Attendees of the e2e Symposium were grouped into teams to

work through unique challenges that educators were facing. My
team was a collection of talented individuals from the corporate
world, students who were in the process of navigating career
options, higher education representatives and other
teachers/administrators. As one would guess, I anticipated this
variety of perspectives would help immensely. Not only did it help,
it was critical.

We began by empathizing. I presented my challenge and some

data to the team for them to better understand my problem. From
there we moved into clarifying with probing questions for them to
get to know the climate I was working in, who our students were
and what our partners expected from the program.

Armed with this new insight, we moved to re-defining what my

challenge really was. This is where my aha moment unwrapped
itself. We spent some quality time challenging each other’s
thinking and made a breakthrough. I did not have one single
challenge that needed a solution, like my mind had settled on….I
had two! (And perhaps even a third, but time did not permit us to
address it.)

The Design Thinking Guide helped us with language to clearly

express our (we all owned it now, it was not just mine) problem
statements. We agreed on the following:

 #1| I am a ChiTech staff member trying to build our

partners’ capacity to have a successful month with
students, but I lack time and resources and the ability
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to develop enough strong relationships and prepare

the sites because time is limited and not all sites are
used to working with HS students, which results
in discouragement from internship sites and weaker
relationships or preparation for some sites.

 #2| I am a ChiTech 12th grader trying to navigate and

adapt to a new environment, but I have little
understanding or familiarity with the workplace
setting and expectations because I am from an
isolated environment where I wasn’t exposed to these
types of workplaces, which results in me developing a
negative perception and/or being discouraged, which
sometimes leads to me giving up.

These statements have been a foundation of my work ever since.

Clearly Identifying the problems at hand was the single most
impactful component of the design thinking process for me. Had
we not spent the time crafting these statements, my work would
have been misguided and any time or energy put into a solution
might not be effective.

All professionals, especially educators ought to use this process to

really understand what problem they are trying to solve. I cannot
think of a challenge in today’s workplaces that cannot be
adequately understood and addressed using design thinking.
When I would tell people that I’m trying to solve the problem of
preparing our students for internships, they would react
supportively but the conversation would not gain much traction.
Now, when I use these problem statements, dialogue flows easier
because the listener can contextualize the issue.

The rest of the time at the e2e Symposium was spent building
prototype solutions to address these problem statements. Our
team of bright thinkers from across professional continuum
 18

drafted two very valuable courses of action for me to take back to

Chicago.

The solution to our the first problem statement was a quick and
engaging video series for our partners that helps guide them
through the internship month. Here we can provide them with
activities and questions to pose to the students while on
internship.

Our solution for the second problem statement was to build out a
career exploration curriculum that we will implement in grades 9
through 12. Students will Explore, Investigate, Prepare and
Execute career related activities to ensure their internships are
successful, and more importantly, to feel inspired about their
plans for life after high school.

Both of these solutions are the basis of work for our newly created
Real-World Learning Action Group at ChiTech. This action group is
made up of me and one representative from each grade level who
will be the leaders of this work amongst their respective teaching
teams. We are testing and and implementing these prototypes
 19

while keeping anchored in the problem statements that guide our

work.

I am very optimistic and excited to continue the work that my e2e

team helped craft. Bringing together engaged minds from a
variety of professional situations is an incredibly effective way
find out what the problem that needs attention actually is……and
then work to solve it!

The next step is to determine which course of action will best solve
the problem. ... Up to this point in the problem-solving, decision-making
process, leaders should have involved subordinates to research
the problem, gather information, and develop and analyze the various
courses of action.
Opportunity Finding and Deciding to decide
March 21, 2009Sree Rama Rao General / Interesting

Alert managers often sense problems early. A study by Majorie A Lyles and
Ian I Mitroff included data from case histories from upper level managers
of major organizations. Eighty percent of these managers said they had
become aware of the existence of a major problem before it showed up on
financial statements or in other formal indicators and before it was
presented to them by others. Informal communication and in tuition were
described as the sources of their information.

Problem finding is not always straightforward. Sara Kiesler and Lee Sproull
have identified some of the most common errors managers make in
sensing problems. They describe three main categories of pitfalls that
managers often encounter: false association of events, false expectation of
events, and false self perceptions and social image. For example, during
the 1960s and early 1970s managers at mainframe computer
manufacturers had false expectations: They believed that a significant
demand for personal computers did not and probably never would exist.
 20

Their expectations were at odds with the reality that developed. Here is a
case where these managers past experiences were not a reliable guide to
future events. The past can play an important part in decision making but
that does not mean that what happened in the past will automatically
continue to happen in the future.

Opportunity Finding:

It is not always clear whether a situation faced by as manager presents a

problem or an opportunity. As we have noted, the two are often
intertwined. For example, missed opportunities create problems for
organizations, and opportunities are often found while exploring problems.
David B Gleicher, a management consultant, provides a useful distinction
between the two terms. He defines a problem as something that
endangers the organization’s ability to reach its objectives and an
opportunity as something that offers the chance to exceed objectives.

The dialectical inquiry method, sometimes called the devil’s advocate

method, is useful in problem solving and opportunity finding. In this
method the decision maker determines possible solutions and the
assumptions they are based on, considers the opposite of all of the
assumptions, and then develops counter solutions based on the negative
assumptions. This process may generate more useful alternative solutions
and identify unnoticed opportunities.

An enormous amount of research has been devoted to problem solving,

whereas very little research concerns problem finding and even less
concerns opportunity finding. Yet, as Peter Drucker makes clear,
opportunities rather than problems are the key to organizational and
managerial success. Drucker observes that solving a problem merely
restores normality whereas progress must come from the exploitation of
opportunities. Drucker links exploitation of opportunities to effectiveness
finding “the right things to do, and concentrating resources and efforts on
 21

them. When decision making is linked to opportunity finding, it clearly

involves choosing actions that can help make a future for the organization.
At Nike, Knight and his colleagues turned a problem into an opportunity
when they used the NBA rule about the acceptable color of basketball
shoes as an opportunity to market the shoe more cleverly.

Among those who have identified an opportunity to exploit are young

entrepreneurs Todd Holmes and Louis Amorosa. Noting that many people
seemed to be drinking less beer but experimenting with and enjoying a
wider range of beers, the two friends founded “Beer Across America”, a
microbrewery beer of the month club, in 1991, when they were 23. By
1994 theirs was one of a half dozen beer clubs around the country allowing
access to a wide range of brewers and beers. Members receive selected
beers, both domestic and imported, via UPS for about the same price as
charged by retailers. In 1993 Beer Across America reported $12 million in
sales.

Problem and opportunity Findings

December 11, 2008Sree Rama Rao General / Interesting

The problem finding process is often informed and intuitive. Four situations
usually alert managers to possible problems.

1. A deviation from past experience means that a pervious pattern of

performance in the organization has been broken. This year’s sales are
falling behind last year’s expenses have suddenly increased; employee
turnover has risen. Events such as these are signals to the manager that a
problem has developed.
2. A deviation from a set plan means, the manager’s projections or
expectations are not being met. Profit levels are lower than anticipated; a
department is exceeding its budget; a project is off schedule. Such events
tell the manager that something must be done to get the plan back on
 22

course.
3. Other people often bring problems to the manager. Customers complain
about late deliveries; higher level managers set new performance
standards for the manager’s department employees resign. Many decisions
that managers make daily involve problems presented by others.
4. The performance of competitors can also create a problem solving
situations. When other companies develop new processes or improvement
in operating procedures the managers may have to reevaluate processes or
procedures in his or her own organization.

Identifying a problem at Coca cola:

Coca Cola USA managers in Atlanta identified a training problem in 1992.

They had launched massive quality training program in 1989 in which all
1,500 workers learned techniques such as problems solving, statistical-
process controls, and process management. But three year later, most
employees had completely forgotten the tools they had learned. The
problem, they had never had a chance to use those tools in the workplace.
In 1993, Coca Cola managers modified the training programs to address
this problem. Employees were provided with training as they needed it
instead of all at once.

Rather than training all associates in the beginning of a TQM initiatives to

understand a myriad of tools they may never use, it’s useful to train teams
as they form. Using just in time approach real problems can be used to
illustrate tools and techniques. This will accelerates the ability of teams to
begin to solve problems ad improve processes.

Cocoa Cola learned the hard way that the maxim if you don’t use it, you
lose it is painfully accurate. In this case the problem was found through a
deviation from a set plan (that is, employees were not using the TQM
tools).
 23

Alert managers often sense problems early. Data from case histories from
upper level managers of major organizations. Eighty percent of these
managers said they had become aware of the existence of a major
problem before it showed up on financial statements or in other formal
indicators and even before it was presented to them by others. Informal
communication and intuition were described as the sources of their
information

Problems finding is not always straight forwards. Some of the most

common errors managers make in sensing problems. They describe three
main categories of pitfalls that managers often encounter: false association
of events false expectation of events, and false self perceptions and social
image. For example, during the 1960s and early 1970s managers at
mainframe computer manufacturers had false expectations: They believed
that significant demand for personal computer did not and probably never
would exist. Their expectations were at odds with the reality that
developed. Here is a case where these mangers’ past experience were not
a reliable guide to future events. The past can play an important part in
decision making but that does not mean that what happened in the past
will automatically continue to happen in the future.

The Nature of Decision Making. Making effectivedecisions, as well as

recognizing when a baddecision has been made and quickly responding to
mistakes, is a key ingredient in organizational effectiveness. Some experts
believe that decision making is the most basic and fundamental of all
managerial activities.
Decision Making: Characteristics, Nature, Techniques and Other
Details

Decision-making is an important job of a manager. Every day he has to

decide about doing or not doing a particular thing. A decision is the
selection from among alternatives. “It is a solution selected after examining
several alternatives chosen because the decider foresees that the course of
 24

action he selects will be more than the others to further his goals and will be
accompanied by the fewest possible objectionable consequences. It is the
selection of one course of action from two or more alternative courses of
action. In the words of Mac Farland, “A decision is an act of choice wherein
an executive forms a conclusion about what must be done in a given
situation.

A decision represents a course of behaviour chosen from a number of

possible alternatives.” The way an executive acts or decides the course of
action from among various alternatives is an act of decision-making.
George Terry says, “Decision-making is the selection based on some criteria
from two or more possible alternatives.” Though there are many
alternatives available for a manager but he has to choose the best out of
them.

Characteristics:

Following are the characteristics of decision-making:

1. Decision-making is based on rational thinking. The manager tries to
foresee various possible effects of a decision before deciding a particular
one.

2. It is a process of selecting the best from among alternatives available.

3. It involves the evaluation of various alternatives available. The selection

of best alternative will be made only when pros and cons of all of them are
discussed and evaluated.

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 25

4. Decision-making is the end product because it is preceded by discussions

and deliberations.

5. Decision-making is aimed to achieve organizational goals.

6. It also involves certain commitment. Management is committed to every

decision it takes.

Nature of Decision-Making:

A decision is always related to some problem, difficulty or conflict.

Decisions help in solving problems or resolving conflicts. There are always
differences of opinions, judgments, etc. Managerial decision helps in
maintaining group effectiveness. All problems may not require decision-
making but merely the supply of information may be sufficient. For
example, when will different groups report for re-orientation? The supply
of information about training programme may be enough.

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Decision problems necessitate a choice from different alternatives. A

number of possibilities are selected before making a final selection.
Decision-making requires something more than a selection. The material
requiring a decision may be available but still a decision may not be
reached. A decision needs some sort of prediction for the future on the
basis of past and present available information. The effect of a decision is to
be felt in future so it requires proper analysis of available material and a
prediction for the future. If decision premises do not come true, then
decision itself may be wrong.
 26

Sometimes decisions are influenced by adopting a follow- the-leader

practice. The leader of the group or an important manager of a concern sets
the precedent and others silently follow that decision. Whatever has been
decided by the leader becomes a guide for others and they also follow suit.
The decisions may also emerge from answers to pertinent questions about
the problem. Such answers try to narrow down the choice and help in
making a decision.

Techniques or Basis for Decision-Making:

Decision-making has become a complex problem. A number of techniques,

extending from guessing to mathematical analyses, are used for decision-
making process. The selection of an appropriate technique depends upon
the judgment of decision-maker.

Following techniques of decision-making are generally

employed:
1. Intuition:

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Decision-making by intuition is characterized by inner feeling of the

person. He takes a decision as per the dictates of his conscious. He thinks
about the problem and an answer is found in his mind. The decision-maker
has his own preferences, influences, psychological make-up and these
things play a vital role in taking a decision. The past knowledge, training
and experience of the decision-maker plays an important role in intuitive
decisions.
 27

With this technique of decision-making, decisions are taken quickly and the
decision-making capability of the person is also used. In case the intuition
of the decision-maker is wrong then decision will also be incorrect. The
other techniques of decision-making are also neglected.

2. Facts:

Facts are considered to be the best basis of decision-making. A decision

based on facts has its roots in factual data. Such decisions will be sound and
proper. The increasing use of computers has helped in systematic analysis
of data. The information has become a major tool in managerial decision-
making. It may not be possible to secure all relevant facts for taking
decisions. Managers, generally, complain of insufficient information. It is
also essential that facts should be properly diagnosed, classified and
interpreted. Facts alone may not be sufficient for decision-making. The
imagination, experience and beliefs of the decision-making also required to
comprehend the facts in proper perspective.

3. Experience:

Past experience of a person becomes a good basis for taking decisions.

When a similar situation arises then the manager can rely on his past
decisions and takes similar decisions. The person sees and understands
things in terms of concepts with which he is familiar. Experience should not
be followed blindly. The new situations should be analyzed on the basis of
past knowledge. A successful decision in the past may not prove useful this
time also, on the other hand, a decision once failed need not be avoided for
all times in future. Though past experience is a good basis but present
 28

situations should be properly analyzed and assessed before taking a

decision.

4. Considered Opinions:

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Some managers use considered opinions as a basis for decision-making.

Besides pertinent statistics, opinions are also given due weightage.
Something discussed and considered by more persons become logical and
may form a sound basis for decision-making. A marketing manager, before
deciding whether to market a new product or not, will like to see marketing
statistics as well as considered opinions before finally making a choice.

5. Operations Research:

The traditional methods of taking decision on the basis of intuition,

experience, etc. are replaced by systematic techniques based on analysis of
data. The operations research is one of the techniques used by modern
management for deciding important matters. It helps managers by
providing scientific basis for solving organizational problems involving
interaction of components of the organization.

6. Linear Programming:

This technique is used to determine the best use of limited resources for
achieving given objectives. This method is based on this assumption that
there exists a linear relationship between variables and that the limits of
variations could be ascertained. Linear programme can be used for solving
problems in areas like production, transportation, warehousing, etc.
 29

Decision Making Conditions:

Decision making involves the selection of one of the alternatives available.

A decision taken at present will have effect in future. A decision-maker tries
to visualize the conditions in future and take decisions accordingly. So
decisions are made in an environment of at least some uncertainty. There
are certain risks involved in decision making and the conditions vary from
certainty to complete uncertainty. The strategy of taking decisions under
different conditions vary.

The conditions under which decisions are taken are as follows:

Certainty:

Under the conditions of certainty, people are reasonably sure about what
will happen when they take a decision. The required information is
available and it is reliable and the cause and effect relationships are known.
The manager makes decisions under such situations at different times with
the same results. Under such situations a deterministic model is used, in
which all factors are assumed to be exact with the chance playing no role.

Risk:

In a risk situation, factual information may exist but it may be insufficient.

Most of the business decisions are taken under risk conditions. The
available information does not answer overall questions about the outcome
of the decision. A manager has to develop estimates of the likelihood of the
various states of events occurring. The estimates may be based on past
experience, other available information or intelligence.
 30

In order to improve decision-making under these conditions, one may

estimate the objective probabilities of an outcome by using, for example,
mathematical models. On the other hand, subjective probability, based on
judgment and experiences, may be used. There are a number of tools
available which help a manager in taking decisions under such conditions.

Uncertainty:

Under conditions of uncertainty a manager has only little information and

he is not sure about its reliability also. Since the manager does not have
proper information on which he can develop, the best he can do is to be
aware that he has no chance of predicting the events. The interaction of
various variables cannot be evaluated for taking decisions. The decision
making under uncertainty is a difficult proposition. For example, if a
company wants to enter a foreign market, if may not be sure about the
consumer preference for the product, economic situation, above all the
political conditions.

The conditions in a new market may so fluctuate that proper decision

taking becomes a problem. The use of a number of modern techniques may
improve the quality of decisions under uncertain conditions. The use of risk
analysis, decision trees and preference theory can help in making proper
decisions under those situations.

Types of Decisions:

Different decisions differ in nature and significance. Some decisions are

taken in routine while some may have to be carefully evaluated.

Various decisions are discussed as follows:

 31

1. Programmed and Non-Programmed Decisions:

Programmed decisions are of a routine nature and are taken within the
specified procedures. These decisions are made with regard to routine and
recurring problems which require structured solutions. A manager is not
required to go through the problem solving procedures again and again for
taking programmed decisions.

The decision rules for programmed decisions should be prepared carefully

and intelligently so that lower level executives are able to take the decisions
without making references to higher managerial levels. No judgment or
discretion is needed to find out solutions to such problems. These decisions
remain consistent for a relatively longer period of time and over many
solutions.

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Non-programmed decisions are related to problems which are unique and

non-repetitive. The information and knowledge about such decisions is not
available. Such decisions are made under new and unfamiliar
circumstances. The standard and pre-determined procedures and rules are
rendered ineffective in programmed decisions because every decision will
have to be taken separately. Non-programmed decisions are usually grade
for solving unstructured problems which keep on changing from time to
time.

Every problem has to be restructured and analyzed by the manager by

using his skill, judgment and creativity. For example, a decision regarding
adding a new product, purchase of new machinery, opening a new branch,
 32

appointment of a new chief executive are all non- programmed decisions

and require separate attention for each decision.

2. Strategic and Tactical Decisions:

Strategic decisions relate to policy matters and need the development and
analysis of alternatives. These decisions influence organizational structure,
objectives, working conditions, finances etc. Strategic decisions exercise
great influence on the functioning and direction of the organization and
have long-term implications. They also define and establish the relationship
of the organization with external environment. Such decisions require more
resources, judgment and skill. Because of their importance, strategic
decisions are taken at top managerial levels.

The decisions such as adding a new product or service, introduction of new

technology, taking over of another organization, selection of a location are
all strategic decisions. These decisions once taken cannot be easily
reversed. The impact of these decisions is fairly long because expansion,
growth, development and profitability of the organization is linked to them.
Strategic decisions somewhat resemble to non- programmed decisions
because they possess the characteristics of the latter.

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In order to implement strategic decisions, management has to make some

tactical, operational or routine decision. One strategic decision may require
many operational decisions. These decisions are concerned with routine
and repetitive matters arising out of the working of the organization. Such
decisions do not require managerial judgment and are taken at lower levels
 33

of the management. Tactical decisions are more specific, functional and

have short-term implications. Such decisions are taken by referring to
established rules, procedures and standards.

3. Individual and Group Decisions:

A decision taken by one person is known as individual decision. In a small

concern normally the owner takes most of the decisions, in a bigger concern
the routine or simple decisions may be left to a particular manager. Such
decisions are generally taken as per predetermined rules and procedures
and require less application of judgment and skill. When a manager is
required to take a decision, he is supplied with information and other
inputs needed for this purpose. All managers, whether at top level or at
lower level, take decisions for carrying out their activities.

When decisions are taken by two or more persons, these are known as
group decisions. Generally, strategic or other important decisions are taken
by groups instead of individuals because of risk involved. The decisions of
Board of Directors or Committees come under this category.

Group decisions are normally important and have long-term implications

for the concern. A decision regarding introducing a new product, shifting to
latest technology, trying labour saving devices etc. may be better taken by a
group of specialists than by an individual. Group decisions are generally
time consuming but otherwise these are well discussed decisions.

Decision Making - Meaning, Nature, Characteristics and Elements

Fundamentals of Management
 34

Decision making may be reviewed as the process of selecting a course of

action from among several alternatives in order to accomplish a desired
result. The purpose of decision making is to direct human behaviour and
commitment towards a future goal. If there are no alternatives, if no choice
is to be made, if there is no other way-out, then there would be not need for
decision making. It involves committing the organisation and its resources
to a particular choice of course of action thought to be sufficient and
capable of achieving some predetermined objective.

Managers at all level in the organisation make decision and solve

problems. In fact, decision-making is the process of reducing the gap
between the existing situation and the desired situation through solving
problems and making use of opportunities. A decision is a course of action
consciously selected from available alternatives, with a view to achieving a
desired goal. It is an outcome of the judgement and represents a choice
and commitment to the same. It is a final resolution of a conflict of needs,
means or goals made are the face of uncertainty, complexity and
multiplicity. A decision is conclusion reached after consideration it occurs
when one option is selected to the exclusion of others – it is rendering of
judgement.

Different management scholars have defined Decision making as follows:

 35

George Terry
Decision making is the selection based on some criteria from two or more
alternatives.

Heinz Weihrick and Harold Koontz

Decision making is defined as the selection of a course of action among
alternatives, it is the care of planning.

Louis Allen
Decision making is the work a manager performs to arrive at conclusion
and judgement.

Nature Or Characteristics of Decision Making

Decision making is globally thought to be selection from alternatives. It is
deeply related with all the traditional functions of a manager, such as
planning, organizing, staffing, directing and controlling. When he performs
these functions, he makes decisions. However, the traditional management
threorists did not pay much attention to decision making. Infact, the
meaningful analysis of decision making process was initiated by Chester
Bernard (1938) who commented, The process of decision are largely
techniques for narrowing choice.

The nature of decision-making may be clearly understood by its following

characteristics features:
1. Decision making is an intellectual process, which involves imagination,
reasoning, evaluation and judgement.
 36

2. It is a selection process in which best or most suitable course of action

is finalized from among several available alternatives. Such selected
alternative provides utmost help in the achievement of organizational goals.
The problems for which there is only one selection are most decision
problems.

3. Decision making is a goal oriented process. Decisions are made to

attain certain goals. A decision is rated good to be extent it helps in the
accomplishment of objectives.

4. It is a focal point at which plans, policies, objectives, procedures, etc.,

are translated into concrete actions.

5. Decision making is a continuous process persuading all organizational

activity, at all levels and in the whole universe. It is a systematic process
and an interactive activity.

6. Decision making involves commitment of resources, direction or

reputation of the enterprise.

7. Decision making is always related to place, situation and time. It may be

decision not act in the given circumstances.

8. After decision making it is necessary and significant to communicate its

results (decisions) for their successful execution.
 37

9. The effectiveness of decision-making process is enhanced by

participation.

Elements of Decision Making

There are following elements in decision making:
• The decision maker.
• The decision problem or goal.
• Attitudes, values and personal goals of the decision maker.
• Assumption with regard to future events and things.
• The environment in which decision is to be made.
• Available known alternatives and their estimated or imagined outcomes.
• Analytical results in the whole perspective.
• The constraints.
• The act of selection or choice.
• Timing of decision.
• Proper communication of decision for its effective execution.
Nature of Managerial Decision Making Process
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To solve the business decisions problems is the task of a managerial

economist. Resources at the disposal of an organisation are scarce.

Therefore optimum solution to the business decision-making problem

requires that resources should be so used as to achieve the objective
efficiently.
 38

The limited amount of resources is one type of constraint faced by the

manager of a firm.

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The other type of constraint faced by the manager of a firm is imposed by

the economic environment which includes the state of the economy, the
phase of business cycles, the competition from the rival firms, government’s
fiscal and monetary policies, export and import policies etc. Given these
constraints the manager has to make business decisions. Therefore, the
decision-making problem faced by a manager is one of constrained
decision-making.

Decision-making problem requires a choice among alternative courses of

action so as to achieve the objective. These alternative courses of action
among which choice has to made are often called business strategies.

The nature of decision-making problem faced by business firms

is therefore of the following type:
‘To identify the alternative courses of action of achieving given objective(s),
and then to select the course of action that achieves the objective in the
economically most efficient way’.

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An example will make clear the nature of decision-making problem

requiring solution by the managers of business firms. Consider Maruti
Udyog Limited which manufactures cars. Suppose it has identified two
possible courses of action (generally called strategies) to meet the growing
market demand for its products. First course of action or strategy is to plan
for its internal expansion of productive capacity. The second course of
action is to take over the premier Auto Limited and use its capacity to
increase output to meet growing demand of its product.

The objective of Maruti Udyog Limited is to maximise profits (that is, the
present value of expected returns) to be earned from expansion of output.
Let S1 stand for strategy 1 or the first course of action (that is, expanding its
 39

internal capacity), S2 for strategy 2 or the second course of action, that is, to
take over the other firm.
The objective function for the above decision-making problem
can be stated as:
Maximise profits (S1, S2)
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To choose from the two alternative strategies, the following decision rule
can be made:

Choose strategy S1 if profits from > profits from S2.

Choose strategy S2 if profits from S2> profits from S1.
The above simple example only brings out the essential feature of the
decision-making problem faced by the managers of business firms and the
rule for their rational solution. It is important to note that the knowledge of
economic theory for decision-making by managers is important to
formulate the objective function and to arrive at the decision rule for
choosing a strategy or a course of action.

Modern economics is divided into two broad branches: microeconomics

and macroeconomics. Microeconomics is concerned with theory of
individual choice: Choice by a consumer and choice by a business firm. On
the other hand, macroeconomics focuses on analyzing the economy as a
whole and its aggregates such as GNP, the general price level, the level of
employment, etc. Managers or rational businessmen get assistance from
both the microeconomics and macroeconomics while making business
decisions, but concepts and techniques of microeconomic theory is of
greater help for them.

This is because microeconomics tells us how to make a rational choice in

allocating scarce resources of the firm while making decisions regarding
price, output, technology, advertising expenditure, and capital investment
expenditure which are the direct concern of business management.
Through their individual actions and choice managers can do little to affect
the aggregate economy, with which macroeconomics is concerned.
 40

But macroeconomics tells him how his business environment will change as
a result of movements in the aggregate economy such as situations of
recession or inflation, changes in economy’s balance of payments and the
Government policy adopted to tackle them. All these factors which affect
the outcome of business decisions. Thus, the managers during their
decision-making process must take into the account the current
macroeconomic outlook and likely changes in it in the future.

Non Programmed decisions are used for unique and ill-structured

situations of organization; both internal and external. Mostly Lower level
managers makesProgrammed decisions. Mostly Upper level managers
makes Non-Programmed decisions.Feb 2, 2017

What Is the Difference Between Programmed & Unprogrammed Decisions From a

Business Perspective?
by M.T. Wroblewski; Updated June 04, 2019

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 4Implications of a Bad Organizational Structure
Like many small-business owners, you probably view time as your
most valuable commodity. And what you wouldn't do for more of
it. Until a genie appears at your door with a magic lantern, you
 41

can free up more time in your day by learning to delegate

programmed decisions to middle- and lower-level managers, while
you handle the thornier unprogrammed decisions that require
more creativity and strategic thinking. Technically, this
management technique contains no magic, even though it may
feel this way.
Programmed Decisions Are Rote

Programmed decisions are those you've encountered many times

before and so know how to handle with ease. They often involve
routine, straightforward matters that are addressed in your
company's rules and procedures manual. By now, these are so
familiar that you may know them by heart, too.
Programmed decisions also may share other characteristics:
 They are often structured and automated (or capable of
being automated). They tend to have successful outcomes,
because of their rote nature. Once they're made the first time,
they set the bar for formulating new rules and procedures that
should be simple for others to follow.
Programmed Decisions Should Seem Familiar

You don't have to run a small business for long, before you're
confronted with programmed decisions such as:
 Reordering office supplies.* Dealing with time off and
vacation requests from employees.
 Addressing power outages and service interruptions to your
customers.
Unprogrammed Decisions Are Thornier

No one ever said that programmed decisions aren't time

consuming. They can be. And the fact that you're considering
delegating some business decisions to your colleagues suggests
that you already know how you can spend an entire day moving
from one programmed decision to another.
 42

It's not necessarily the time element that makes unprogrammed

decisions different; it's their qualitysince they often:
 Defy easy answers, involving nuances and complexities. You
won't find the answer in a rules and procedures
manual. Contain an element of novelty that may give you
pause and say, Not so fast. Require evaluation, brainstorming,
contemplation and, perhaps, some trial and error.
Unprogrammed Decisions Break the Mold

As your business grows, you hire new employees and gain new
customers, so it stands to reason that the number of
unprogrammed decisions you encounter will grow exponentially.
These decisions often involve personal, strategic or crisis
situations – the type you know in your gut that you had better get
right or the consequences will reverberate through your business.
Perhaps you've already seen some of them in the form of:
 Altering your marketing plan to address a new market
niche. Dealing with a competitor who is chipping away at your
customer base by seemingly copying some of your best
tactics. Confronting a threatened work strike from one of your
vendors.* Addressing a customer complaint on social media
(although for some small-business owners, this occurrence is
happening with such regularity that it is moving into the
programmed decision category).
Make a Smart Executive Decision

You may be thinking of a similar problem in your business that

traverses both categories. But you should be able to place every
decision you face into one of the two categories – if you think of
programmed decisions as involving structured problems – and
unprogrammed decisions as involving unstructured problems. Put
another way, unprogrammed decisions do not require creativity
and innovation because they involve routine problems.
 43

Vesting your middle- and lower-level managers with the authority

to make programmed decisions will do more than free your time;
it will empower them (and will flatter them) and will also help
them grow in the roles.
They may never say it out loud, but your employees and
customers need your creative thinking and problem solving skills.
They need your ingenuity. And they need the leadership that flows
from unprogrammed decisions. It's not magic; a genie might say
that it's just good business.
Programmed Decision and Non-Programmed Decision Explained

Programmed decision and Non-

Programmed decision are the two basic types of decisions that managers
make. This depends on their authority, responsibility, and position in the
organizational decision-making structure.
Definition, similarities, and differences of Programmed Decision and Non-
Programmed Decision are explained below;
Programmed Decision

Programmed decisions are those that are traditionally made using standard
operating procedures or other well-defined methods. These are routines
that deal with frequently occurring situations, such as requests for leaves of
absence by employees.
In routine situations, it is usually much more desirable for managers to use
programmed decision than to make a new decision for each similar
situation.
 44

In programmed decisions, managers make a real decision only once, when

the program is created. Subsequently, the program itself specifies
procedures to follow when similar circumstances arise.
The creation of these routines results in the formulation of rules,
procedures, and policies.
Programmed decisions do not necessarily remain confined to simple
issues, such as vacation policies or similar such things; they are also used
to deal with very complex issues, such as the types of tests that a doctor
needs to conduct before performing a major surgery on a patient with
diabetes.
To summarize; programmed decisions features are;

 Programmed decisions made using standard operating procedures.

 Deals with frequently occurring situations. (Such as requests for

leaves of absence by employees)

 Much more appropriate for managers to use programmed decision for

similar and frequent situations.

 In programmed decisions managers make a real decision only once

and program itself specifies procedures to follow when similar
circumstances arise.

 Leads to the formulation of rules, procedures, and policies.

Non-Programmed Decision

Non-programmed decisions are unique. They are often ill-structured, one-

shot decisions. Traditionally they have been handled by techniques such as
judgment, intuition, and creativity.
More recently decision-makers have turned to heuristic problem-solving
approaches in which logic; common sense and trial and error are used to
 45

deal with problems that are too large or too complex to be solved through
quantitative or computerized approaches.
In fact, many management training programs on decision-making are
designed to help managers think through problems using a logical, non-
programmed approach.
In this way, they learn how to deal with extraordinary, unexpected, and
unique problems.
Non-programmed decision features are;

 Situations for Non-programmed decisions are unique, ill-structured.

 Non-programmed decisions are one-shot decisions.

 Handled by techniques such as judgment, intuition, and creativity.

 A logical approach to deal with extraordinary, unexpected, and unique

problems.

 Managers take heuristic problem-solving approaches in which logic;

common sense and trial and error are used.

Similarities of Programmed Decision & Non-Programmed Decision

 Both are Required to run operations of Business efficiently.

 Complements each other in setting goals and managing resources

of the organization.

Differences of Programmed Decision & Non-Programmed Decision

Programmed Decision Non-Programmed Decision
Used for frequent situations of the Used for unique and ill-
organization; both internal and external. structured situations of the organization;
both internal and external.
 46

Mostly Lower level managers are making Mostly Upper-level managers are making
these decisions. these decisions.
Follows structured and non-creative Takes an outside of the box unstructured,
patterns. logical and creative approach.

Programmed decisions usually relate to structured problems while non-

programmed decisions are taken to solve unstructured problems.
It is also to be noted that the programmed decisions are taken at the lowest
level whereas the non-programmed decisions are taken at the highest level
of the organization hierarchy.

Types of Decisions: Programmed and Non-Programmed

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After reading this article you will learn about the programmed
and non-programmed decisions.

Programmed Decisions:
Decisions related to structured situations, where the problem is more or
less routine and repetitive in nature are known as programmed decisions.
For example, problems related to leave are solved by policy relating to leave
rules. Employees who take leave according to leave rules Eire granted leave
and those who do not follow the leave rules may not be granted leave. The
routine problems may not always be simple.

There may be complex routine problems. For example, production

department follows a routine that managers order for inventory when it
reaches the re-order point. If there is sudden increase in demand for the
product, managers cannot wait for inventory to reach the re-order point to
make fresh orders. Orders are placed before this level is reached. Ordering
 47

inventory is, thus, a problem of routine nature but ordering inventory

before the re-order point is a routine but complex problem.

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In either situation, managers depend on pre-established criteria for taking

decisions. Various policies, schedules and procedures guide these decisions
and, therefore, policies and procedures should be as clear as possible. Since
decisions are based on pre-defined standards, they do not require much of
brainstorming and are taken normally by middle and lower-level managers.

Managers do not think of innovative ways to solve the routine problems.

Therefore, they can concentrate on important and crucial activities. These
decisions also involve some amount of certainty, i.e., outcomes of these
decisions are, by and large, known.

Various types of programmed decisions are:

(1) Organisational decisions

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(2) Operational decisions

(3) Research decisions, and

(4) Opportunity decisions.

Non-Programmed Decisions:
These decisions are taken in unstructured situations which reflect novel, ill-
defined and complex problems. The problems are non-recurring or
exceptional in nature. Since they have not occurred before, they require
extensive brainstorming. Managers use skills and subjective judgment to
solve the problems through scientific analysis and logical reasoning.

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 48

Subjective judgment is based on assessment of the situation. In objective

judgment (in case of programmed decisions), past experience forms the
basis for decision-making. These decisions involve fair degree of
uncertainty since outcomes of decisions are not always known. These
decisions are based on partial ignorance as the alternatives and their
outcomes cannot be known in advance. They are taken in the context of
changing, dynamic environmental conditions.

For example, increase in advertising expenditure, effective salesmanship,

upgraded technology, quality controls, brand image and reasonable prices
are expected to increase sales and profits. If, despite all this, profits are
declining, it requires immediate decision-making and such decisions are
non-programmed decisions.

These decisions are taken by top-level managers. As we move up the

organisational hierarchy, the need for taking non-programmed decisions
increases.

Different types of non-programmed decisions are:

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(1) Personal decisions,

(2) Strategic decisions,

(3) Crisis intuitive decisions, and

(4) Problem-solving decisions.

 49

There is no clear line of demarcation between programmed and non-

programmed decisions. Decisions are neither totally programmed nor non-
programmed. They are a combination of both and lie on continuum of
decision; between totally programmed decisions at one end of the
continuum and totally non-programmed decisions at the other end.

A brief description of different types of programmed and non-

programmed decisions is given below:

1. Organisational and personal decisions:

These decisions reflect use of authority. Decisions taken in interest of the
organisation are organisational decisions and decisions taken for personal
interests are personal decisions. Organisational decisions can be delegated
but personal decisions cannot.

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Managers are officially authorised to make organisational decisions but

they do not have authority to make personal decisions. They are based on
personal biases. For example, firing an employee because he does not
conform to rules is an organisational decision but firing due to personal
enmity is a personal decision.

2. Operational and strategic decisions:

 50

These decisions reflect scope of decision-making processes. Operational

decisions are taken as a matter of routine. They relate to daily operations
and aim to achieve short-term objectives of the firm. They are taken by
middle and lower- level managers within the framework of policies and
procedures and allow limited use of discretion by managers. Their impact is
also limited and short-range in nature.

These decisions affect part of the organisation and are based on pre-defined
policies and procedures. For instance, purchase of stationery and raw
material are day-to-day decisions which affect only the purchase
department and are taken according to pre-defined procedures defined for
the purchase department.

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Decisions related to important and non-recurring problems are called

strategic decisions. Managerial skill and judgment are used to make these
decisions. They relate to long-term goals of the company, define
relationship of the organisation with the environment and are risky in
nature. They are taken by top-level managers. Decisions to update the
technology, launch a new plant or change the policies are strategic
decisions.

These decisions affect the whole or major part of the organisation and
contribute directly to organisational objectives. They are usually not based
on past experience and involve a major departure from earlier business
practices regarding various business decisions like expansion of business in
international markets, diversification, change in marketing mix etc.

Strategic decisions involve three important elements:

(a) Result element:

It specifies the result (objective) to be achieved through the decision.

(b) Action element:

It specifies the action to be taken to achieve the result.
 51

(c) Commitment element:

It specifies the dedication, loyalty and commitment with which people who
are responsible for taking action to achieve results are involved in making
the decisions.

3. Research and crisis—intuitive decisions:

These decisions reflect urgency of decision-making. Decisions which
involve regular survey of the market are research decisions and decisions
made under situations of crisis or emergency are crisis — intuitive
decisions. For example, decision to allocate funds to Research and
Development for product designing is a research decision; decision to
increase production of medicines because of earthquake or war is a crisis-
intuitive decision.

4. Opportunity and problem-solving decisions:

These decisions reflect foresightedness. Managers forecast opportunities to
promote organisational growth. The decision to grow and diversify (market
penetration and market development) is an opportunity decision.

Problem-solving decision solves a specific problem. For example, decision

to enter into new markets even when the company is making profits in the
existing market is an opportunity decision and decision to drop a product
line because it is unprofitable is a problem-solving decision.

(Market penetration increases sale of existing products to the existing and

new customers in the existing markets and market development increases
sale by entering into new markets with same products or products with
minor modifications).

What are the differences between programmed and non-

programmed decisions?
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 52

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Arnab Saha, IITian, JavaHolic, Raconteur, Aficionado, CSE Graduate.
Answered Feb 2 2017 ∙ Author has 64 answers
and 152.7k answer views
Programmed Decisions
Programmed decisions are those that a manager has encountered and made
in the past. The decision the manager made was correct because he used
the assistance of company policies, computations or a set of decision-
making guidelines. In addition to being well structured with predetermined
rules regarding the decision-making process, programmed decisions may
also be repetitive or routine as their outcome was successful in the past. It
generally does not take a manager as long to come to a conclusion when
faced with a business-related programmed decision because the challenge
faced is not new. As a result, programmed decisions allow a manager to
make streamlined and consistently effective choices. In short:
1. These are for solving day to day and routine problems and are repetitive
in nature.
2. Rules and procedures are described for taking these decisions.
3. These decisions remains consistent for a relatively longer period of time
and over many situations.
4. These decisions are made for solving both simple and complex problems.
5. Decisions are of routine nature requiring no judgment.
Examples of Programmed Decisions
Individuals naturally make programmed decisions on a daily basis. From a
business perspective, a company may create a standard routine for
handling technical issues, customer service problems or disciplinary
 53

matters. An employee’s duties may become routine with repetition, like the
process a mechanic uses to troubleshoot problems with a customer’s car.

Unprogrammed Decisions

Unprogrammed decisions involve scenarios that are new or novel and for
which there are no proven answers to use as a guide. In such a case, a
manager must make a decision that is unique to the situation and results in
a tailored solution. Unprogrammed decisions generally take longer to make
because of all the variables an individual must weigh; and the fact that the
information available is incomplete, so a manager cannot easily anticipate
the outcome of his decision and be in a dilemma, or a state of confusion. In
short:

1. These are for solving non-repetitive tactical or unique problems.

2. Every decision will have to be taken separately by analyzing and
evaluating each problem.
3. Every decision is different and there is no consistency.
4. Such decisions are for solving complex.
5. Such Decisions require judgment in each case.
Examples of Unprogrammed Decisions
In the business world, the makers of the earliest personal computers had to
make unprogrammed decisions regarding the type of marketing to use to
attract customers who possibly had never used a computer in the past.
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 54

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Related QuestionsMore Answers Below

 How are non-programmed and programmed decisions

different?
 What are non-programmed decisions?
 What are some examples of non-programmed decisions?
 What are the main differences between programmed
decision making and non-programmed decision making?
 What are some examples of a programmed decision and
non-programmed decision?

Ibrahim Raji
Answered Feb 1, 2017
Differences between Programmed and Non-programmed decisions:

Programmed decisions are used for frequent situations of organization;

both internal and external. Non Programmed decisions are used for unique
and ill-structured situations of organization; both internal and external.

Mostly Lower level managers makes Programmed decisions. Mostly Upper

level managers makes Non-Programmed decisions.

Programmed decisions follows structured and non-creative patterns. Non-

programmed decisions takes an out side of the box unstructured, logical
and creative approach.

Programmed decisions usually relate to structured problems while non-

programmed decisions are taken to solve unstructured problems.
 55

It is also to be noted that the programmed decisions are taken at the lowest
level whereas the non-programmed decisions are taken at the highest level
of organization hierarchy.

8.2k views ∙ View 3 Upvoters ∙ Answer requested by Dion

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Ahmed Abubacar
Answered Jul 10, 2018
Differences between Programmed and Non-programmed
decisions: ... Non-programmed decisions takes an out side of the box
unstructured, logical and creative approach. Programmed
decisions usually relate to structured problems while non-programmed
decisions are taken to solve unstructured problems.

1.7k views
Florio Potter
Answered May 29, 2018 ∙ Author has 335 answers
and 225.9k answer views
Unprogrammed decisions involve scenarios that are new or novel and for
which there are no proven answers to use as a guide. In such a case, a
manager must make a decision that is unique to the situation and results in
a tailored solution. Unprogrammed decisions generally take longer to make
because of all the variables an individual must weigh; and the fact that the
information available is incomplete, so a manager cannot easily anticipate
the outcome of his decision.

1.Describe the difference between programmed and

nonprogrammed decisions. What are the implications of these
differences for decision makers?Programmed decisions are either
 56

structured or recur frequently, or both. Nonprogrammed decisions

are those that cannot be structured or that occur with much less
frequency. Programmed decisions can be made with less time and
other resources. In many cases, programmed decisions can be
made routine so that real decision making is unnecessary. On the
other hand, nonprogrammed decisions are typically complex,
lengthy, and difficult to resolve.2.What are the different conditions
under which decisions are made?Under certainty, the decision
maker knows the alternatives and the conditions associated with
them with reasonable certainty. Under risk, the probabilities of the
conditions are known or can beestimated. Under uncertainty, the
alternatives, the risks associated with them, and the likely
consequences are unknown.3.Describe the behavioral nature of
decision making. Be certain to provide some detail about political
forces, risk propensity, ethics, andcommitment in your
description.Political forces in decision making are common.
Coalitions often attempt to influence the decision-making process
in organizations.Some managers will be very conservative and try
to adhere to the rational model of decision making. Others will be
more aggressiveand willing to take bigger risks. The
organization’s culture will influence the manager’s attitude toward
risk.Each individual has his or her own beliefs about which
behavior isright and wrong. These beliefs factor into the decision-
making process. Intuition and the escalation of commitment may
also have an impact on the decision.4.What is meant by the term
escalation of commitment? In your opinion, under what conditions
is escalation of commitment likely to occur?Escalation of
commitment occurs when a decision maker persists in supporting
his or her original decision, in spite of evidence that demonstrates
that that decision is ineffective. Escalation of

commitment is likely to occur when decision makers must make a

public show of support for their decision. Once they have done
that, it is much more difficult for them to admit they were wrong.
 57

Modern Techniques for Non-programmed Decisions

Decision making is one of the most important functions of all managers. Each
manager has to routinely take decisions which carry consequences. Due to the
unpredictable nature of these consequences, managers must make sure they consider
all aspects of decisions carefully. Over the course of time, managers have evolved
several modern techniques for regulating non-programmed decisions.

Programmed and Non-programmed Decisions

The study of management categorizes decisions into various types. One such
category is programmed and non-programmed decisions. The difference between
these two kinds of decisions is basically in the way in which managers apply them.

Programmable decisions are those which are routine and repetitive in nature.
Managers often have standard operating procedures to deal with them. For example,
if an employee wants a holiday, he will just ask his supervisor for the same. The
supervisor may either approve or deny the leave as per the standard procedure.

On the contrary, non-programmable decisions arise due to other problems that do not
occur routinely. Unlike programmable decisions, there can be no standard procedures
for these decisions.

For example, several employees might suddenly take a day off from work without
permission. The reasons for this could be willful insubordination, protest, inability to
commute, etc. This is no longer a routine problem because no manager might have
thought of it. Therefore, in this case, the top level management might step in and take
some unprecedented action.

Learn the Quantitative techniques of decision making here.

 58

Modern Techniques for Non-programmed Decisions

Since managers do not have to take non-programmed decisions very often, they lack
standard procedures for solving them. These decisions generally require a careful
study of the problem using scientific analysis. Furthermore, managers have to probe
all possible alternatives before selecting one.

The following are some modern techniques managers can employ to take such
decisions:

1. Creative Techniques
Since non-programmable decisions do not have standard solutions, managers have to
come up with creative ideas. Creativity basically means the ability to think of new
and innovative ideas.

The most popular method to encourage creativity is brainstorming. In this technique,

a group of people gather around and think of all possible ideas. Some of these ideas
might be either impractical or ludicrous. However, managers can use inspiration from
them to come up with solutions.

The technique of brainstorming generally involves more than one person. This, in
turn, leads to more creativity of ideas and opinions.

2. Participative Techniques
Another method that managers can use for decision making using a democratic
approach is the participative technique. Under this method, managers actively
involve employees in the decision-making process. Managers encourage employees
to raise their grievances and suggest their solutions.

The most important benefit of this technique is that it fosters a sense of togetherness
between the management and employees. Since the employees also take decisions,
they are likely to implement them with more responsibility and commitment.
Furthermore, this boosts their morale and helps them perform better at their work.
 59

3. Heuristic Techniques
This technique basically relies on the fact that taking complex decisions cannot
always involve systematic implementation. This is because the consequences of such
decisions are often unpredictable and sporadic.

Therefore, managers use a trial-and-error approach in this technique. They take each
step individually and evaluate it before moving on further. Managers can use
scientific techniques and modern technology to make the process easier.

Questions on Non-programmed Decisions

Question: Mention the missing words in the following sentences.

(a) __________ decisions arise routinely while non-programmed decisions do not.

(b) __________ is the most popular method to encourage creativity in a group.

(c) __________ techniques generally rely on a trial-and-error approach.

(d) __________ techniques encourage the employees to raise their concerns and
suggest solutions.

Answers: (a) Programmed (b) Brainstorming (c) Heuristic (d)

Participative
 60

Decision making is the process of making choices by identifying

a decision, gathering information, and assessing alternative resolutions.
Using a step-by-stepdecision-making process can help you make more
deliberate, thoughtful decisions by organizing relevant information and
defining alternatives.

Decision-making process

Decision making is the process of making choices by identifying a

decision, gathering information, and assessing alternative resolutions.
Using a step-by-step decision-making process can help you make more
deliberate, thoughtful decisions by organizing relevant information and
defining alternatives. This approach increases the chances that you will
choose the most satisfying alternative possible.

Step 1: Identify the decision

You realize that you need to make a decision. Try to clearly define the
nature of the decision you must make. This first step is very important.
 61

Step 2: Gather relevant information

Collect some pertinent information before you make your decision: what
information is needed, the best sources of information, and how to get it.
This step involves both internal and external “work.” Some information is
internal: you’ll seek it through a process of self-assessment. Other
information is external: you’ll find it online, in books, from other people,
and from other sources.

Step 3: Identify the alternatives

As you collect information, you will probably identify several possible
paths of action, or alternatives. You can also use your imagination and
additional information to construct new alternatives. In this step, you will
list all possible and desirable alternatives.

Step 4: Weigh the evidence

Draw on your information and emotions to imagine what it would be like if
you carried out each of the alternatives to the end. Evaluate whether the
need identified in Step 1 would be met or resolved through the use of
each alternative. As you go through this difficult internal process, you’ll
begin to favor certain alternatives: those that seem to have a higher
potential for reaching your goal. Finally, place the alternatives in a priority
order, based upon your own value system.

Step 5: Choose among alternatives

Once you have weighed all the evidence, you are ready to select the
alternative that seems to be best one for you. You may even choose a
combination of alternatives. Your choice in Step 5 may very likely be the
same or similar to the alternative you placed at the top of your list at the
end of Step 4.
 62

Step 6: Take action

You’re now ready to take some positive action by beginning to implement
the alternative you chose in Step 5.

Step 7: Review your decision & its consequences

In this final step, consider the results of your decision and evaluate
whether or not it has resolved the need you identified in Step 1. If the
decision has not met the identified need, you may want to repeat certain
steps of the process to make a new decision. For example, you might
want to gather more detailed or somewhat different information or
explore additional alternatives.

7 Steps of the Decision-Making Process

Posted By: Lucidchart Content Team

December072017

Decision Making Process

The decision-making process is a step-by-step process allowing

professionals to solve problems by weighing evidence, examining
alternatives, and choosing a path from there. This defined process also
provides an opportunity, at the end, to review whether the decision was the
right one. Use these decision making process steps to help you make more
profitable decisions.

Robert Frost wrote, “Two roads diverged in a wood, and I—I took the one
less traveled by, and that has made all the difference.” But unfortunately,
not every decision is as simple as “Let’s just take this path and see where it
goes,” especially when you’re making a decision related to your business.

Whether you manage a small team or are at the head of a large

corporation, your success and the success of your company depend on you
making the right decisions—and learning from the wrong decisions.
 63

Use these decision making process steps to help you make more profitable
decisions. You'll be able to better prevent hasty decision-making and make
more educated decisions when you put a formal decision-making process
in place.

Decision Making Process (Click on image to modify online)

Defining the business decision-making process

The business decision-making process is a step-by-step process allowing

professionals to solve problems by weighing evidence, examining
 64

alternatives, and choosing a path from there. This defined process also
provides an opportunity, at the end, to review whether the decision was the
right one.

The 7 decision-making process steps

Though there are many slight variations of the decision-making framework

floating around on the Internet, in business textbooks, and in leadership
presentations, professionals most commonly use these seven steps.

1. Identify the decision

To make a decision, you must first identify the problem you need to solve
or the question you need to answer. Clearly define your decision. If you
misidentify the problem to solve, or if the problem you’ve chosen is too
broad, you’ll knock the decision train off the track before it even leaves the
station.

If you need to achieve a specific goal from your decision, make it

measurable and timely so you know for certain that you met the goal at the
end of the process.

2. Gather relevant information

Once you have identified your decision, it’s time to gather the information
relevant to that choice. Do an internal assessment, seeing where your
organization has succeeded and failed in areas related to your decision.
Also, seek information from external sources, including studies, market
research, and, in some cases, evaluation from paid consultants.

Beware: you can easily become bogged down by too much information—
facts and statistics that seem applicable to your situation might only
complicate the process.
 65

3. Identify the alternatives

With relevant information now at your fingertips, identify possible solutions

to your problem. There is usually more than one option to consider when
trying to meet a goal—for example, if your company is trying to gain more
engagement on social media, your alternatives could include paid social
advertisements, a change in your organic social media strategy, or a
combination of the two.

4. Weigh the evidence

Once you have identified multiple alternatives, weigh the evidence for or
against said alternatives. See what companies have done in the past to
succeed in these areas, and take a good hard look at your own
organization’s wins and losses. Identify potential pitfalls for each of your
alternatives, and weigh those against the possible rewards.

Depending on the decision, you might want to weigh evidence using

a decision tree. The example below shows a company trying to determine
whether to perform market testing before a product launch. The different
branches record the probability of success and estimated payout so the
company can see which option will bring in more revenue.
 66

Decision Tree Template (Click on image to modify online)

You could also use Lucidchart to build a pros and cons list. With a ton of
colors and shapes available to customize your visual, you can clearly
highlight whether your options meet necessary criteria or whether they
pose too high of a risk. Any diagram you create in Lucidchart is simple
to embed into a presentation or share with stakeholders so everyone
involved sees your research.
 67

Pros and Cons List (Click on image to modify online)

5. Choose among alternatives

Here is the part of the decision-making process where you, you know, make
the decision. Hopefully, you’ve identified and clarified what decision needs
 68

to be made, gathered all relevant information, and developed and

considered the potential paths to take. You are perfectly prepared to
choose.

6. Take action

Once you’ve made your decision, act on it! Develop a plan to make your
decision tangible and achievable. Use Lucidchart diagrams to plan the
projects related to your decision, and then set the team loose on their tasks
once the plan is in place.

7. Review your decision

After a predetermined amount of time—which you defined in step one of

the decision-making process—take an honest look back at your decision.
Did you solve the problem? Did you answer the question? Did you meet
your goals?

If so, take note of what worked for future reference. If not, learn from your
mistakes as you begin the decision-making process again.

Manage the decision-making process with Lucidchart (it’s free!)

With a large selection of templates and shape libraries, Lucidchart makes all
of your processes run more smoothly.

Sign up for free today to get started—or, if you’re not sure, run through the
seven steps listed above to figure out whether Lucidchart is right for you
and your business.

7 Steps of the Decision Making Process

Posted February 10, 2017 | By Tricia Hussung
Facebook92Twittergoogle_plusEmailLinkedInShare
 69

In general, the decision making process helps managers and other

business professionals solve problems by examining alternative choices
and deciding on the best route to take. Using a step-by-step approach is an
efficient way to make thoughtful, informed decisions that have a positive
impact on your organization’s short- and long-term goals.
The business decision making process is commonly divided into seven
steps. Managers may utilize many of these steps without realizing it, but
gaining a clearer understanding of best practices can improve the
effectiveness of your decisions.
Steps of the Decision Making Process
The following are the seven key steps of the decision making process.

 Identify the decision. The first step in making the right decision is
recognizing the problem or opportunity and deciding to address it.
Determine why this decision will make a difference to your customers or
fellow employees.
 Gather information. Next, it’s time to gather information so that you
can make a decision based on facts and data. This requires making a value
judgment, determining what information is relevant to the decision at hand,
along with how you can get it. Ask yourself what you need to know in order
to make the right decision, then actively seek out anyone who needs to be
involved.
“Managers seek out a range of information to clarify their options once
they have identified an issue that requires a decision. Managers may seek
to determine potential causes of a problem, the people and processes
involved in the issue and any constraints placed on the decision-making
process,” Chron Small Business says.
 Identify alternatives. Once you have a clear understanding of the
issue, it’s time to identify the various solutions at your disposal. It’s likely
 70

that you have many different options when it comes to making your
decision, so it is important to come up with a range of options. This helps
you determine which course of action is the best way to achieve your
objective.
 Weigh the evidence. In this step, you’ll need to “evaluate for
feasibility, acceptability and desirability” to know which alternative is
best, according to management experts Phil Higson and Anthony Sturgess.
Managers need to be able to weigh pros and cons, then select the option
that has the highest chances of success. It may be helpful to seek out a
trusted second opinion to gain a new perspective on the issue at hand.
 Choose among alternatives. When it’s time to make your decision,
be sure that you understand the risks involved with your chosen route. You
may also choose a combination of alternatives now that you fully grasp all
relevant information and potential risks.
 Take action. Next, you’ll need to create a plan for implementation.
This involves identifying what resources are required and gaining support
from employees and stakeholders. Getting others onboard with your
decision is a key component of executing your plan effectively, so be
prepared to address any questions or concerns that may arise.
 Review your decision. An often-overlooked but important step in the
decision making process is evaluating your decision for effectiveness. Ask
yourself what you did well and what can be improved next time.
“Even the most experienced business owners can learn from their mistakes
… be ready to adapt your plan as necessary, or to switch to another
potential solution,” Chron Small Business explains. If you find your decision
 71

didn’t work out the way you planned, you may want to revisit some of the
previous steps to identify a better choice.
Common Challenges of Decision Making

Although following the steps outlined above will help you make more
effective decisions, there are some pitfalls to look out for. Here are common
challenges you may face, along with best practices to help you avoid them.
 Having too much or not enough information. Gathering relevant
information is key when approaching the decision making process, but it’s
important to identify how much background information is truly required.
“An overload of information can leave you confused and misguided,
and prevents you from following your intuition,” according to Corporate
Wellness Magazine.
In addition, relying on one single source of information can lead to bias and
misinformation, which can have disastrous effects down the line.

 Misidentifying the problem. In many cases, the issues surrounding

your decision will be obvious. However, there will be times when the
decision is complex and you aren’t sure where the main issue lies. Conduct
thorough research and speak with internal experts who experience the
problem firsthand in order to mitigate this. It will save you time and
resources in the long run, Corporate Wellness Magazine says.
 Overconfidence in the outcome. Even if you follow the steps of the
decision making process, there is still a chance that the outcome won’t be
exactly what you had in mind. That’s why it’s so important to identify a valid
option that is plausible and achievable. Being overconfident in an unlikely
outcome can lead to adverse results.
 72

Decision making is a vital skill in the business workplace, particularly for

managers and those in leadership positions. Following a logical procedure
like the one outlined here, along with being aware of common challenges,
can help ensure both thoughtful decision making and positive results.

If you are interested in business management topics like these, consider

Concordia University, St. Paul’s online MBA program. You can
also download our free guide, “Climbing the Corporate Ladder: Your
Guide to the MBA and Beyond,” for an in-depth look at the value of the
MBA.

The Decision‐Making Process

Quite literally, organizations operate by people making decisions. A manager
plans, organizes, staffs, leads, and controls her team by executing decisions. The
effectiveness and quality of those decisions determine how successful a manager
will be.

Managers are constantly called upon to make decisions in

order to solve problems. Decision making and problem
solving are ongoing processes of evaluating situations or
problems, considering alternatives, making choices, and
following them up with the necessary actions. Sometimes
the decision‐making process is extremely short, and mental
reflection is essentially instantaneous. In other situations,
the process can drag on for weeks or even months. The
entire decision‐making process is dependent upon the right
information being available to the right people at the right
times.

The decision‐making process involves the following steps:

 73

1.Define the problem.

2.Identify limiting factors.

3.Develop potential alternatives.

4.Analyze the alternatives.

5.Select the best alternative.

6.Implement the decision.

7.Establish a control and evaluation system.

Define the problem

The decision‐making process begins when a manager

identifies the real problem. The accurate definition of the
problem affects all the steps that follow; if the problem is
inaccurately defined, every step in the decision‐making
process will be based on an incorrect starting point. One
way that a manager can help determine the true problem in
a situation is by identifying the problem separately from its
symptoms.

The most obviously troubling situations found in an

organization can usually be identified as symptoms of
underlying problems. (See Table for some examples of
symptoms.) These symptoms all indicate that something is
wrong with an organization, but they don't identify root
causes. A successful manager doesn't just attack
 74

symptoms; he works to uncover the factors that cause these

symptoms.

All managers want to make the best decisions. To do so,

managers need to have the ideal resources — information,
time, personnel, equipment, and supplies — and identify any
limiting factors. Realistically, managers operate in an
environment that normally doesn't provide ideal resources.
For example, they may lack the proper budget or may not
have the most accurate information or any extra time. So,
they must choose to satisfice — to make the best decision
possible with the information, resources, and time available.

Time pressures frequently cause a manager to move forward

after considering only the first or most obvious answers.
However, successful problem solving requires thorough
 75

examination of the challenge, and a quick answer may not

result in a permanent solution. Thus, a manager should think
through and investigate several alternative solutions to a
single problem before making a quick decision.

One of the best known methods for developing alternatives

is through brainstorming, where a group works together to
generate ideas and alternative solutions. The assumption
behind brainstorming is that the group dynamic stimulates
thinking — one person's ideas, no matter how outrageous,
can generate ideas from the others in the group. Ideally, this
spawning of ideas is contagious, and before long, lots of
suggestions and ideas flow. Brainstorming usually requires
30 minutes to an hour. The following specific rules should be
followed during brainstorming sessions:

Concentrate on the problem at hand. This rule keeps the

discussion very specific and avoids the group's tendency to
address the events leading up to the current problem.

Entertain all ideas. In fact, the more ideas that come up, the
better. In other words, there are no bad ideas.
Encouragement of the group to freely offer all thoughts on
the subject is important. Participants should be encouraged
to present ideas no matter how ridiculous they seem,
because such ideas may spark a creative thought on the
part of someone else.

Refrain from allowing members to evaluate others' ideas on

the spot.All judgments should be deferred until all thoughts
are presented, and the group concurs on the best ideas.
 76

Although brainstorming is the most common technique to

develop alternative solutions, managers can use several
other ways to help develop solutions. Here are some
examples:

Nominal group technique. This method involves the use of a

highly structured meeting, complete with an agenda, and
restricts discussion or interpersonal communication during
the decision‐making process. This technique is useful
because it ensures that every group member has equal input
in the decision‐making process. It also avoids some of the
pitfalls, such as pressure to conform, group dominance,
hostility, and conflict, that can plague a more interactive,
spontaneous, unstructured forum such as brainstorming.

Delphi technique. With this technique, participants never

meet, but a group leader uses written questionnaires to
conduct the decision making.

No matter what technique is used, group decision making

has clear advantages and disadvantages when compared
with individual decision making. The following are among
the advantages:

Groups provide a broader perspective.

Employees are more likely to be satisfied and to support the

final decision.

Opportunities for discussion help to answer questions and

reduce uncertainties for the decision makers.

These points are among the disadvantages:

 77

This method can be more time‐consuming than one

individual making the decision on his own.

The decision reached could be a compromise rather than the

optimal solution.

Individuals become guilty of groupthink — the tendency of

members of a group to conform to the prevailing opinions of
the group.

Groups may have difficulty performing tasks because the

group, rather than a single individual, makes the decision,
resulting in confusion when it comes time to implement and
evaluate the decision.

The results of dozens of individual‐versus‐group

performance studies indicate that groups not only tend to
make better decisions than a person acting alone, but also
that groups tend to inspire star performers to even higher
levels of productivity.

So, are two (or more) heads better than one? The answer
depends on several factors, such as the nature of the task,
the abilities of the group members, and the form of
interaction. Because a manager often has a choice between
making a decision independently or including others in the
decision making, she needs to understand the advantages
and disadvantages of group decision making.

The purpose of this step is to decide the relative merits of

each idea. Managers must identify the advantages and
disadvantages of each alternative solution before making a
final decision.

Evaluating the alternatives can be done in numerous ways.

Here are a few possibilities:
 78

Determine the pros and cons of each alternative.

Perform a cost‐benefit analysis for each alternative.

Weight each factor important in the decision, ranking each

alternative relative to its ability to meet each factor, and
then multiply by a probability factor to provide a final value
for each alternative.

Regardless of the method used, a manager needs to evaluate

each alternative in terms of its

Feasibility — Can it be done?

Effectiveness — How well does it resolve the problem

situation?

Consequences — What will be its costs (financial and

nonfinancial) to the organization?

After a manager has analyzed all the alternatives, she must

decide on the best one. The best alternative is the one that
produces the most advantages and the fewest serious
disadvantages. Sometimes, the selection process can be
fairly straightforward, such as the alternative with the most
pros and fewest cons. Other times, the optimal solution is a
combination of several alternatives.

Sometimes, though, the best alternative may not be obvious.

That's when a manager must decide which alternative is the
most feasible and effective, coupled with which carries the
lowest costs to the organization. (See the preceding
section.) Probability estimates, where analysis of each
alternative's chances of success takes place, often come
into play at this point in the decision‐making process. In
 79

those cases, a manager simply selects the alternative with

the highest probability of success.

Managers are paid to make decisions, but they are also paid
to get results from these decisions. Positive results must
follow decisions. Everyone involved with the decision must
know his or her role in ensuring a successful outcome. To
make certain that employees understand their roles,
managers must thoughtfully devise programs, procedures,
rules, or policies to help aid them in the problem‐solving
process.

Ongoing actions need to be monitored. An evaluation system

should provide feedback on how well the decision is being
implemented, what the results are, and what adjustments
are necessary to get the results that were intended when
the solution was chosen.

In order for a manager to evaluate his decision, he needs to

gather information to determine its effectiveness. Was the
original problem resolved? If not, is he closer to the desired
situation than he was at the beginning of the decision‐
making process?

If a manager's plan hasn't resolved the problem, he needs to

figure out what went wrong. A manager may accomplish this
by asking the following questions:

Was the wrong alternative selected? If so, one of the other

alternatives generated in the decision‐making process may
be a wiser choice.

Was the correct alternative selected, but implemented

improperly? If so, a manager should focus attention solely
on the implementation step to ensure that the chosen
alternative is implemented successfully.
 80

Was the original problem identified incorrectly? If so, the

decision‐making process needs to begin again, starting with
a revised identification step.

Has the implemented alternative been given enough time to

be successful? If not, a manager should give the process
more time and re‐evaluate at a later date.

7 Steps for an Effective Decision-Making Process

Having a plan is the first step, but then there are seven after that,
so consider this the set up. Without a plan or a process in place,
you’ll never be able to develop a method of decision-making that
holds true. You plan your projects, so why shouldn’t you plan your
decision-making process?

1. Identify the Decision

You can’t make a decision until you decide that there’s a decision
to be made. It sounds obvious, but so often teams will suffer
indecision or, worse, ignorance of what the problem requiring
their decisive attention is. This can cause a problem to fester,
increasing its damage and influence on your organization.
 81

So, once you realize you have to make a decision, then you’re
already at step one. At this point in the decision-making process,
it’s critical to define the issue and the decision that must be
made. Make sure that you’re being as specific as possible,
because if you’re too broad in your definition, then your decision
is going to swing wide and likely miss its mark.

2. Collect Information
Now that you’ve got a decision to make, what’s the relevant data
you need in order to make a well-informed decision? That includes
establishing where to gather the best information. Seek out where
you can get accurate data on the problem and, therefore, set you
on the right course to making the correct decision.

Look at the decision from all angles. That means, both internally
and externally. So, go through a process of self-assessment, and
get input from your team and those who are interfacing with the
issue that requires a decision. Also, seek guidance from outside
sources, whether that be online, in the library or from other
people who have experience and skill solving similar
problems. Reporting tools can also be a huge help during this
step.

3. Develop Options
As you research, you’ll likely have many avenues in which to
address the problem. That’s good. You want to have as many
alternatives as possible. Think of this as a fact-gathering mission.
It’s not part of this step to decide. That will come later in the
decision-making process. For now, list all the decisions that meet
the criteria of the research you’ve done. Feel free to get creative
when listing all of your possible options because you never know
where the best decision will reveal itself. It may even come in the
form of a combination of options.

4. Judge the Evidence

The jury is still out, but the courtroom drama has passed.
Attorneys for all sides have presented their arguments, and now
 82

it’s time for you to weigh the various decisions and run them
against your own metrics to see how they size up as the single,
best decision to make.

This is not solely a cerebral process. In fact, it’s easy to get stuck
in this step for too long if you continue to analyze data and
evaluate options. In order to escape this trap of analysis paralysis,
you must also trust your instincts.

Managers have experience and a history from which to turn to for

guidance. What does your gut say? If there are several options
that are so close that it’s hard to see the difference, think about
what acting on that decision would look like for you, your team,
the project and the organization. Run each alternative through
your head. See how they play out. Then list them in order of
priority to get a sense of which one you favor. The one scenario
that comes the closest to achieving the goal you have is likely
going to show itself, as you carefully work through this process.

5. Make a Choice
Okay, you’ve made it! It’s time for the decision. It’s not yet time
for action though, as in enacting the decision, but before you can
do that you have to make a choice. This is often the most difficult
part. Prior to this you had a process to play with, but there was
nothing at stake—now there is.

You could make this step more of a continuation of the previous

step, if you need more time to process the alternatives to see
which one rises to the top of your list. That’s fine. There’s nothing
wrong with making sure you’ve done the due diligence, as long as
you’re getting closer to making that decision.

6. Time for Action

No more procrastination. You could run through all the
alternatives in your head until it’s time for you to retire, and then
spend the rest of your life of leisure contemplating the best
possible route. You could do that, but that’s not what you were
 83

hired to do. As a professional, you must act. Now is that time.

You’ve done the work, and you have the data. The historical
context and the compass of your gut are pointing towards one
decision. Implement it.

Whatever you do, don’t implement your decision blindly. Watch

what happens at the onset carefully, as you’ll want to collect data
and results to review later.

7. Review
All decisions are teaching moments, if you take the time to see
how the decision worked out (or not) and chart the consequences
of your action. Look at the results of your decision. Did the
decision go as you proposed it would? Evaluate whether or not
you made the right choices throughout the previous decision-
making steps. If your decision proved ineffectual, then maybe you
didn’t clearly define the problem in step one.

Don’t worry. It’s not the end of the world. This, too, is a process.
Use what you’ve learned from this decision-making process and, if
the decision wasn’t the right one, explore why it didn’t serve the
goal you had set for it and how you could approach the process
differently. The process isn’t perfect—remember, it’s only as good
as what you put into it.

7 Steps in Decision Making

147

These 7 steps in decision making will give you the essential

elements of a structured process model.

From issue identification to action, evaluation and learning.

Improve your decision making … in just a minute!

This is one of our Manage in a Minute pages. These contain

practical tips on essential management topics.
 84

No fuss or side-tracks, they get straight to the point.

And don’t miss out on our great half price e-guide offer. You
can get our complete decision making bundle for 50% off
normal retail price.

Find out more about this great offer here, OR download them
straight away by clicking on the image below:

7 Steps in Decision Making: from Identification to

Implementation
1 Identify a problem or opportunity
 The first step is to recognise a problem or to see
opportunities that may be worthwhile.
 Will it really make a difference to our customers?
 How worthwhile will it be to solve this problem or
realise this opportunity?
2 Gather information
 What is relevant and what is not relevant to the
decision?
 What do you need to know before you can make a
decision, or that will help you make the right one?
 Who knows, who can help, who has the power and
influence to make this happen (or to stop it)?
3 Analyze the situation
 What alternative courses of action may be available to
you?
 What different interpretations of the data may be
possible?
 85

Free infographic:
Click on the image to download our free infographic of the rational
decision making process

4 Develop options
 Generate several possible options.
 Be creative and positive.
 Ask “what if” questions.
 How would you like your situation to be?
5 Evaluate alternatives
 What criteria should you use to evaluate?
 Evaluate for feasibility, acceptability and desirability.
 Which alternative will best achieve your objectives?
6 Select a preferred alternative
 Explore the provisional preferred alternative for future
possible adverse consequences.
 What problems might it create?
 What are the risks of making this decision?
7 Act on the decision
 Put a plan in place to implement the decision.
 Have you allocated resources to implement?
 Is the decision accepted and supported by colleagues?
 Are they committed to making the decision work?
 86

Essential Steps in Decision Making: Evaluate and Learn

It’s useful to review how successful the decision has been,
and the effectiveness of the decision making process.
Monitor these by asking:
 How will you evaluate the success of the decision?
 How can you improve on the decision making process?
 What did you do well?
 What can be improved?
 What are you now able to do that you couldn’t, before
implementing the decision?
More on the 7 steps in decision making

You’ll find more on these and other practical techniques in

our e-guide: Making Better Decisions.
It’s packed with practical tools, clear processes, great tools,
useful tips, thoughtful insights, and emerging ideas on
“nudging” decisions.
Use the tools in this guide to help your decision making:
 Tool 1: Do you need to make a decision?
 87

 Tool 2: The POCA decision making model

 Tool 3: Decision levels
 Tool 4: 7 step decision making process
 Tool 5: Team decision making
 Tool 6: Evaluating alternatives
See for yourself how to use the 7 steps in decision making,
to help you be a better manager.

7 Steps in Decision Making

147

These 7 steps in decision making will give you the essential

elements of a structured process model.

From issue identification to action, evaluation and learning.

Improve your decision making … in just a minute!

This is one of our Manage in a Minute pages. These contain

practical tips on essential management topics.

No fuss or side-tracks, they get straight to the point.

And don’t miss out on our great half price e-guide offer. You
can get our complete decision making bundle for 50% off
normal retail price.

Find out more about this great offer here, OR download them
straight away by clicking on the image below:

7 Steps in Decision Making: from Identification to

Implementation
1 Identify a problem or opportunity
 88

 The first step is to recognise a problem or to see

opportunities that may be worthwhile.
 Will it really make a difference to our customers?
 How worthwhile will it be to solve this problem or
realise this opportunity?
2 Gather information
 What is relevant and what is not relevant to the
decision?
 What do you need to know before you can make a
decision, or that will help you make the right one?
 Who knows, who can help, who has the power and
influence to make this happen (or to stop it)?
3 Analyze the situation
 What alternative courses of action may be available to
you?
 What different interpretations of the data may be
possible?

Free infographic:
Click on the image to download our free infographic of the rational
decision making process

4 Develop options
 Generate several possible options.
 89

 Be creative and positive.

 Ask “what if” questions.
 How would you like your situation to be?
5 Evaluate alternatives
 What criteria should you use to evaluate?
 Evaluate for feasibility, acceptability and desirability.
 Which alternative will best achieve your objectives?
6 Select a preferred alternative
 Explore the provisional preferred alternative for future
possible adverse consequences.
 What problems might it create?
 What are the risks of making this decision?
7 Act on the decision
 Put a plan in place to implement the decision.
 Have you allocated resources to implement?
 Is the decision accepted and supported by colleagues?
 Are they committed to making the decision work?

Essential Steps in Decision Making: Evaluate and Learn

It’s useful to review how successful the decision has been,
and the effectiveness of the decision making process.
Monitor these by asking:
 How will you evaluate the success of the decision?
 How can you improve on the decision making process?
 What did you do well?
 What can be improved?
 What are you now able to do that you couldn’t, before
implementing the decision?
More on the 7 steps in decision making
 90

You’ll find more on these and other practical techniques in

our e-guide: Making Better Decisions.
It’s packed with practical tools, clear processes, great tools,
useful tips, thoughtful insights, and emerging ideas on
“nudging” decisions.
Use the tools in this guide to help your decision making:
 Tool 1: Do you need to make a decision?
 Tool 2: The POCA decision making model
 Tool 3: Decision levels
 Tool 4: 7 step decision making process
 Tool 5: Team decision making
 Tool 6: Evaluating alternatives
See for yourself how to use the 7 steps in decision making,
to help you be a better manager.
1. Small Business»
2. Business Planning & Strategy»
3. Making Business Decisions»
What Are the Steps in the Decision-Making Process of a Manager?
by David Ingram; Reviewed by Michelle Seidel, B.Sc., LL.B., MBA;
Updated February 05, 2019
 91

Related Articles
 1Build Flexibility With Decision Making
 2The Disadvantages of Mixing Decision Models
 3The Decision-Making Process in an Organization
 4How Do I Improve Business Decision Making?
Small business owners and managers make decisions on a daily
basis, addressing everything from day-to-day operational issues
to long-range strategic planning. The decision-making process of
a manager can be broken down into seven steps. Although each
step can be examined at length, managers often run through all
of the steps quickly when making decisions. Understanding the
process of managerial decision-making can improve your
decision-making effectiveness.
Identify Problems Requiring Decisions

The first step in the process is to recognize that there is a decision

to be made. Decisions are not made arbitrarily; they result from
an attempt to address a specific problem, need or opportunity.
A supervisor in a retail shop may realize that he has too many
employees on the floor compared with the day's current sales
volume, for example, requiring him to make a decision to keep
costs under control.
 92

Seek Information to Clarify Options

Managers seek out a range of information to clarify their options

once they have identified an issue that requires a decision.
Managers may seek to determine potential causes of a problem,
the people and processes involved in the issue and any
constraints placed on the decision-making process.
Brainstorm Potential Solutions

Having a more complete understanding of the issue at hand,

managers move on to make a list of potential solutions. This step
can involve anything from a few seconds of though to a few
months or more of formal collaborative planning, depending on
the nature of the decision.
Weigh the Alternatives

There is always more than one option available for moving

forward on a given issue or a new project (including, of course,
the option of doing nothing). Compile a list of the pros and cons of
each alternative, with a particular emphasis on the ease, speed
and amount of resources needed for implementation. It pays to
have the best information available before moving ahead to the
decision-making phase.
Choose an Alternative

After your group weighs the pros and cons of each potential
solution, seek additional information if needed and select the
option they feel has the best chance of success at the least cost.
Consider seeking outside advice if you have gone through all the
previous steps on your own; asking for a second opinion can
provide a new perspective on the problem and your potential
solutions.
 93

Implement the Plan

There is no time to second guess yourself when you put your

decision into action. Once you have committed to putting a
specific solution in place, get all of your employees on board and
put the decision into action with conviction. That is not to say that
a managerial decision cannot change after it has been enacted;
savvy managers put monitoring systems in place to evaluate the
outcomes of their decisions.
Evaluate the Outcomes

Even the most experienced business owners can learn from their
mistakes. Always monitor the results of strategic decisions you
make as a small business owner; be ready to adapt your plan as
necessary, or to switch to another potential solution if your
chosen solution does not work out the way you expected.

The Basics of the Decision-Making Process

The decision-making process is choosing among two or more

courses of action for a given situation. Making decisions is a part
of everyday life. Some consider it an art, others a proficiency.
Decisions may be personal or professional, but, in each case, the
choices will often have lasting consequences. In other words, the
decisions we make have the potential to affect ourselves and
others in the short and long term. Therefore, it is valuable to
possess a skill set that will allow you to reflect and weigh
alternatives -- finally electing the option that is the most
appropriate for each situation.
 94

Experts and laymen, alike, have offered a wealth of suggestions

about how to become an accomplished decision maker. Some
advocate an elementary approach, such as creating a mental
checklist that is habitually referred to when the individual is faced
with choices. Others prefer to implement a much more highly
complex set of procedures that should end in optimal results. In
this article both concepts will be incorporated. In this case, the
decision-making process will be separated into four steps, with
explanations of how they can be applied in formal and informal
situations. This will allow the reader to internalize the process of
decision making, while developing an understanding of its
application in diverse settings.

Step 1 – Identify the Goal or Problem that Requires a

Decision

The first step in the decision-making process is to identify the

decision that an individual is facing. The problem may be simple
enough to explain with basic language, and that will not
ultimately require hours of reflection, such as, "The babysitter
didn't show up today and I have to go to work, so now what do I
do?" However, this very same challenge might be stated in more
eloquent and exaggerated language, such as, "I am required to
be on the job site today and our in-home child care worker has
failed to appear at our agreed-upon time. It is possible she has
decided not to continue her employment with us, and now I must
decide how to move forward with this conundrum, both
immediately, and long term."
 95

Also, decision making is not always associated with a problem,

but can also take the form of goal-setting. For instance, a person
may be thinking about their future and say to themselves, "Going
to college is probably a good option, if I want to make a lot of
money in the future." The aim is apparent, although perhaps
addressed somewhat artlessly. Another way this same goal can
be clarified might be with more sophisticated verbiage such as, "I
am faced with the decision of attending college and postponing
employment, or finding a job and joining the workforce
immediately. These are choices that require greater
investigation." Ultimately, no matter how the problem or goal is
identified, the most important point is the essence of the first
step in the decision-making process -- to be able to state the
problem in plain and understandable verbiage.

Step 2 – Gather Information and Alternatives Associated

With Choices

Interested in learning more? Why not take an online class in Decision

Making Skills?

With a clear idea in mind of the decision that a person is facing,

the next step is to brainstorm or research all of the possible
options. This, too, depends on the seriousness of the challenge
faced, and how quickly the decision must be made. If we return
to the first example in Step 1, we find a parent who may be
moments away from expecting to leave his or her home and head
to work, safe in the routine of the caregiver's arrival. Instead,
with the chance that the parent is left to fend for themselves at
 96

the last minute, he or she is likely to run through a mental list of

choices to alleviate the immediate problem, and address it long-
term in the following hours or days. Perhaps the parent has
family or neighbors to whom they could turn for last-minute
babysitting. Another option might be to contact their place of
employment and explain the situation, remaining at home and
looking for immediate childcare alternatives. No matter what
choice the parent makes, they are clearly at Step 2 in the
decision-making process -- listing all the possible options and
solutions that are available, no matter how extreme they may
first appear. In the case of the life choice regarding college
attendance, this is a decision that will require greater thought and
research. Relevant information will need to be gathered prior to a
determination. It is important to remember that this step also
includes seeking the advice of experts in the field, and the
opinions of trusted family members or associates. Their expertise
may provide the decision-maker with real-world and relevant
insight that would further advance the process.

Finally, information-gathering will result in the identification of

alternatives for each preference, along with the degree to which
the choice is viable or desirable. It is important to incorporate
these findings into the information-gathering step. By this, what
is meant is that your investigation into choices should include
acknowledgment of consequences that might affect the pursuit of
a particular option, and/or its outcome, or the "good and bad"
outcomes that can result from the pursuit of each option. For
example, when deciding whether or not to attend college, one of
 97

the repercussions of pursuing an advanced education could be

that the individual must live with his or her parents, until the
degree is complete. This might make the choice less palatable,
but should be confirmed as an authentic fallout in Step 2 of the
decision-making process.

Step 3 – Make Your Decision

Once the alternatives have been explored extensively, and a list

of choices has been generated from which an optimal decision
can be made, the natural next step is to actually elect one of the
options that have been developed. Now, selecting the best
possible solution is also not as easy as it may sound. However, if
you have put in the effort to state the problem clearly and
investigate your options, then the actual process of deciding on
an alternative will be simpler, and you will be able to move
forward with greater confidence. Sometimes, when an individual
reaches this point of the decision-making process, the best choice
from among the opportunities might be evident and stand out
from among the rest. For example, in the case of the mother who
has last-minute babysitting issues, if all of the choices she can
brainstorm include leaving the children with family members,
asking a neighbor to watch them, or staying home herself, the
first two options might seem salient. But if there are no neighbors
or family nearby with whom the person could entrust her children
to, then it is obvious she has no choice, but to stay home with
the children.
 98

However, in the instance where a young person is mulling over

the pros and cons of college attendance, a variety of choices may
arise. Perhaps they could attend college part-time and work part-
time; or maybe the individual could attend a less expensive
university, freeing up some cash for moving out of the home.
Here, there is a broader spectrum of choices, and, therefore, the
implications for decision making are more challenging. Even so,
this is the point where a preference must be indicated. It is also
the time in the decision-making process that can cause the most
stress. It requires personal insight, a level of gut instinct, and a
leap of faith -- all at the same time. If the decision-maker has put
in the adequate amount of effort, then this will allow the
individual to select the appropriate option with greater
confidence.

If possible, it is recommended that even after a decision has been

made, the person faced with the task take some time to reflect
on their choice over the course of several days, asking
themselves such questions as, "How do I feel, now that I have
opted for this direction," or, "What is my comfort level, now that I
have made this choice from the options I listed?" Now, it might
be a good idea to let your subconscious do the thinking for you.
In other words, you have actively implemented the decision-
making process to this point. You have named your problem, you
have considered all of the choices you have available, and you
have made a reasoned decision based on the information you
collected. Now, trust yourself to internalize the decision and listen
to your inner voice -– whether or not it is telling you that the
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choice is the right one for your future, or if there are still some
misgivings about the decision.

Step 4 - Put Your Decision into Action and Evaluate

It is not uncommon for people to put off decision-making because

they are hesitant to make life-defining choices. Yet this is part of
growing up and becoming an adult, and each time a person
implements the decision-making process, he or she becomes
more adept and competent in the skill, and more confident of
their own ability to utilize it for their own benefit. In other words,
taking action is the adult part of the decision-making process and
the end result of all the pre-planning that goes into it. No matter
what decision you are faced with making, you eventually have to
act on it. There is an exhilarating feeling that comes with action,
particularly if it is based on the proper application of the decision-
making process.

If we use the two examples from this section, we find that the
parent has decided to stay home and spend the time finding a
quality daycare replacement. In this case, it is the father, and he
is spending the morning contacting nursery schools in the area
and setting up visitations for the following day. He and his wife
have agreed to take turns staying home with the children over
the next few days until a proper solution can be found. The
individual who is trying to decide whether or not to attend college
has come to the conclusion that he will need an advanced
education if he is going to be able to enter environmental work.
He does have limited funds, however, and does not want to live
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at home. So he has enrolled in a nearby community college,

found gainful full-time employment, and is moving into an
efficiency apartment near the school.

Conclusions and Review

The decision-makers in both instances are satisfied with their

choices, and even more content with their ability to manipulate
the decision-making process to their advantage. Over the next
few weeks and months, they will review the choices they have
made to determine if they were the best options for their
situations, and whether or not the plan needs to be "tweaked" in
some way. Either way, this application of the decision-making
process has advanced their expertise in the four steps that are
required to navigate life's choices.

If you are venturing into this study to become more adept, if not
expert, in decision making, then it is valuable to remember the
four steps of the process. First, state the problem in clear and
plain language. Second, research all of the options that are
available to address the problem. Third, make the choice from the
alternatives considered. Fourth, enact the decision and evaluate
to ensure that it is the correct one to meet its stated purpose.
Remember, practice makes perfect, and this is especially true of
decision-making.