An essential deciding factor for any leaders and management is the way they make their decisions, and the people who lack this singular skill are simply not suitable for the leadership roles in this cut-throat competition of today’s world.
Wrong decisions can bring in consequences, which forces us to live with them for a long time, while better decision-makers can change the consequences for the greater good. The entire decision-making process is dependent on the right information available to the right person at the right time.
The core of modern management training is to develop this decision-making skill, as it determines both the organisational and managerial activities. One decides to solve problems, so both decision-making and problem-solving are intertwined processes of evaluating situations, considering alternatives, making choices and following them up with required actions.
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 organisation involving planning, organizing and controlling results from all kinds of decisions taken by the management.
The word ‘decision’ has its root in its Latin origin – de ciso that means ‘a cutting away to conclude’. The relative factor that helps people to conclude is to understand the goal which one wants to achieve.
Decision-making Process – Factors and Steps
Factors that determine any decision-making processes are – Information, the time factor, and personality of the decision-maker, participation, acceptance and implementation, experience and the power to decide.
The decision-making process also involves certain steps like – defining the problem, identifying limiting factors, developing potential alternatives, choosing the best alternative after analysing other options, implementing the decision and lastly to establish control and evaluate the situation. 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, so they need to choose to satisfice – the best possible decision with the information, resources and available time.
Brainstorming is said to be the best method to develop alternatives, where a group works together to generate ideas and alternative solutions to a problem.
Difficult decisions, those are 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 levels, mergers, acquisitions, bankruptcy may have a major impact on their 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 under which any decision is taken also adds to its difficulty. High-quality decisions often become difficult if taken under the pressure of time; that often forces the managers to take the short cuts without evaluating or considering the other alternatives; so that complex decision is simplified into absurdity.
Poor Decision-Making Process
Intuition as the 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 and establishing a weak link between decision and implementation, etc.
Development of Decision-Making Skills through the Beyond Education Program of Globsyn Business School
Globsyn Business School nurtures these decision-making skills into its budding managers right from their initiation days. 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 allows them to admit the truth of reality way before the would-be managers hit the competition ground. With the emphasis on intellectual discovery and critical thinking, GBS provides students an environment for both intellectual discourse and experiencing corporate life which further encourages them in making 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; it is part of a continuous journey of learning and improvement.