The word ‘decision’ has its root in its Latin origin – de ciso which means ‘a cutting away to conclude’. The relative factor that helps people to conclude is to understand the goal that one wants to achieve.
Effective decision-making skill is a cornerstone of effective leadership. An essential deciding factor for leaders and managers is their decision-making ability. Leaders must navigate difficult situations, consider numerous options, and make informed choices that are consistent with business goals and values. With that said people who lack this singular skill are simply not suitable for leadership roles in this cut-throat competition of today’s world. Hence, we can say that leadership and decision-making abilities go hand in hand.
Wrong decisions can bring consequences, which force us to live with them for a long time, while better decision-makers can change the consequences for the greater good. The same fact applies to organizations as well. Throughout any business cycle, decisions play a crucial role in higher management levels to attain the ultimate business objective or to set the ball rolling. The overall performance of any organization involving planning, organizing, and controlling results from all kinds of decisions taken by the management. As a consequence, the core of modern management training is to develop this decision-making leadership skill among students.
How to Make Decisions – Factors and Steps
Various factors need to be considered while making decisions. Also, the entire decision-making process is dependent on the right information available to the right person at the right time.
● Define the Problem
Start by identifying the problem that requires a decision.
● Gather Information
Gather as much information as possible about the problem in the hand, which requires decisions. Try to comprehend the situation better by gathering both qualitative and quantitative information.
● Develop Potential Alternatives
Look for all the possible alternatives that can affect the decision-making process and get a solution. Evaluate all available alternatives.
● Choosing the Best Alternative
Assess the pros and cons of each alternative based on factors like feasibility, risks, consequences, and so on, and choose the best alternatives out of the rest.
● Decision Making
Choose the best alternative, trust your judgment, and make the best decision to get the answer to the problem at hand.
● Evaluate and Review
Continuously assess and review the decisions you’ve made. If necessary, you may need to modify your past decisions to make new ones in response to feedback and changing circumstances.
Decision-making cannot always be quantified completely as certain decisions are also based on human or rational intuitions and instincts.
Creating and Choosing Alternatives
The essence of all business decisions is to construct the relevant alternatives based on one’s experience and imagination; sensibly estimating the consequences – with the costs and benefits, the incomes and outgoes for each of the choices, and finally calculating the alternative to have maximum profit.
Managers always like to make the best decisions, though they often operate in an environment that does not provide ideal resources. Hence, they need to choose to make – the best possible decision with the information, resources, and available time. Brainstorming is the best method to develop alternatives, where a group works together to generate ideas and alternative solutions to a problem.
Difficult Decisions
Difficult decisions, those considered to have a major impact, can be grouped into three categories – impact, problem complexity, and context.
High-impact personal decisions are often job-related, whereas, at the corporate level, mergers, acquisitions, and bankruptcy may have a major impact on thousands of workers. The challenge of balancing the multiple, often conflicting objectives leads to the complexity of a problem; as there will be always financial objectives to consider along with performance objectives.
The Context surrounding a decision considerably increases its complexity. Making high-quality judgments can be difficult when time restrictions apply, causing managers to take shortcuts without thoroughly analyzing alternative options. As a result, complex decisions may be reduced to the point of absurdity.
Poor Decision-Making Process
Poor decision-making can be caused by a variety of circumstances, including inadequate information, biased assessment, or hasty review. It frequently leads to inferior results, missed opportunities, and increased dangers. Intuition, another primary decision negotiator, is considered to be a symptom of a poor decision-making process. Others include – a tendency to consider only one alternative, failing to look at the bigger picture, frequently revisiting one’s decision, allowing strong personalities to drive decisions, ignoring uncertainties, overusing inexpert opinion establishing a weak link between decision and implementation, etc. With everything said, to avoid the hazards of poor decision-making, effective decision-making procedures require careful analysis, critical thinking, and a willingness to explore multiple perspectives.
Development of Decision-Making Skills: Beyond Education Program of GBS
Globsyn Business School nurtures decision-making skills in its budding managers right from their initiation days through its Beyond Education Programs. Students develop their decision-making goals through various carefully designed exercises to assess their desires systematically.
The verticals of the Beyond Education Program involve all the management students to wisely choose the right alternatives, and not to make their decisions any hit or miss game due to the lack of enough time. The B-School’s Management Programmes also investigate the individual’s courage to see as they are and allow them to admit the truth of reality way before the would-be managers hit the competition ground. With an emphasis on intellectual discovery and critical thinking, GBS provides students with an environment for both intellectual discourse and experiencing corporate life which further encourages them to make decisions based on integrity and ethics.
‘Observe’, ‘Think’, and ‘Experiment’ are the three critical steps through which the total outcome of managerial decisions can be well optimized. Hence, we can conclude that managerial decision-making is not a one-time event but part of a continuous journey of learning and improvement, which GBS imparts effectively.