Business and Marketing / Management Essay

Steps of the decision-making process in an organization?

A managerial decision is made between several possible options after weighing each of these options and having analyzed the consequences within the framework of the initial objective set.

Decision-making can take on different aspects, depending on the context, the situation, the issues, and the personality/competence of the one who decides:

- decide on your own after careful consideration with yourself,

- reflect and decide as a group,

- rely on the sound advice of third-party experts,

- decide not to decide,

- ostrich and leave it to chance,

- follow your intuition sometimes against all the odds,

- watch how others act in such a situation and do like them.

Decision-making framework

There are generally two axes for decision-making: solo or in a group. Each of these options has its strengths and limitations.

Decide alone

If deciding alone is still sometimes for specific, as a way to assert a certain power, it seems simple at first sight and has certain advantages:

- Speed: personal choice after analyzing the various possible options without having to question others beyond measure.

- Easy to set up: no meeting to organize or think tank to form.

- Withdrawal from various influences and manipulations: a personal choice made in his soul and conscience, without being subjected to any hierarchical, affective, financial, political influences, etc.

The fact remains that this has some drawbacks:

- Subjectivity: a decision taken according to the decision maker's personality, experience, knowledge, hierarchical position, etc.

- Lack of perspective: emotions can distort the decision, especially in a crisis situation where the choice is often made in an emergency.

- Damaging decision: due to a lack of competence and/or appropriate knowledge regarding certain specific points.

- Weight of negative consequences: in case of the wrong choice, the various repercussions can be heavy to bear.

Decide as a group

The second decision-making option is the more or less limited use of the group. Thus, the decision will be made:

- By consensus: each participant in the decision meeting expresses his opinion. It is not a question of finding an option that meets everyone's expectations, but a win-win agreement where everyone will find their account and defend at the end of the meeting.

- By majority: individual vote after reflection and collective analysis. The group refers to the option chosen by the majority of participants.

- By delegation: designation of various representatives of various sub-groups or experts who are responsible for making their voices heard and who represent them during decision-making sessions (e.g., staff representatives, union representatives, technical specialists, etc.

Like the decision taken solo, deciding in a group offers various advantages, among which:

- Involvement of the whole team in the decision-making process: each member of the team takes part in the reflection by bringing their point of view and their solutions. Everyone listens to others and becomes aware of new elements. The group uses its collective intelligence to serve the resolution of the problem posed with the common objective of the adequate final decision possible.

- Empowerment of team members: everyone takes cognizance of the issues and acts accordingly.

- Strengthening group cohesion: collective reflection strengthens the links between employees of the same team and has some limitations :

- The longer and more difficult process to implement the organization of meetings, collective brainstorming sessions, drafting of reports, etc.

- Conflicts in the event of major disagreements and the impossibility of consensus: an individual who has not voted for the choice of the majority can slow down the implementation of the solution chosen or even sometimes sabotage it.

- Disempowerment of an employee, when represented: hidden behind their representative, some individuals can completely detach themselves from any responsibility for the decisions taken, which ultimately harms the entire team.

The eight steps in the business decision-making process

To make an informed decision, it is necessary to have all the information concerning each of the alternatives and know the consequences of each of them in relation to the defined objectives. By using the data collected as raw material, the correct processing of information makes it possible to distinguish better the action that should be applied.

The process of choosing between the different possibilities in order to carry out actions concerning any administrative function can be segmented into eight stages:

1. Identifying a problem: the first step before making a decision is to detect the existence of a difference between the actual state of the situation and the desired state. This discrepancy or problem puts pressure on the administrator, forcing him to act, for example, due to organizational policies, deadlines, financial crises, future employee reviews, etc. In order for the situation to be considered problematic, the administrator must have the authority, the money, the informationand all the resources necessary to act. Otherwise, expectations are unrealistic.

2. Identifying criteria for decision-making: point out the rules or methods that will be important in solving the problem. Each individual responsible for making decisions has a range of criteria that guide him in doing so. It is important to know the criteria that will be taken into account and those that will be omitted since these will be unimportant for the person responsible for making the decision.

3. Assigning a weighting to the criteria: this involves giving the right priorities to the criteria selected during the previous step since they will not all have the same importance when making a decision in the final business. There is usually a preferential criterion, the others being sometimes weighted by comparison between them and by evaluation against the preferential criterion.

4. The development of alternatives: This consists of being able to obtain and present all the possible alternatives to solve the problem correctly.

5. Risk analysis and alternative strategies: The decision-maker must carefully study the alternatives that have been proposed. The strengths and weaknesses of each of them must be clearly highlighted after comparing the criteria chosen and classified during the second and third stages. While some evaluations are quite objective, most of them are subjective due to value judgments.

6. The choice of an alternative: when all the possibilities have been defined and presented, then evaluated by the decision-maker by the defined and hierarchical criteria, it is necessary to choose a single alternative: the best among those which have been presented following the established procedure.

7. The implementation of the alternative: once the choice has been made, the chosen decision's application is of vital importance. Applying this decision is necessary to communicate it to the persons concerned and obtain their commitment to it. It is easier if those responsible for carrying out the decision are involved in the process. These decisions are implemented through effective planning, organization, and leadership.

8. Evaluating the effectiveness of the decision: Finally, it is necessary to evaluate the result obtained following the decision taken and the solution adopted and to check whether the problem has been corrected. If this persists, it will be necessary to analyze the previous phases to find the wrong decision and make a new decision relating to the initial decision: either abandon it completely or modify it from one of the previous steps. 

Decision making: simplifying a complex reality

Depending on the decision and its type, models exist to simplify an overly complex reality. The aim is to highlight the aspects of reality that are most important for the analysis, and due to the model, to obtain a better understanding and a good description of the reality they represent.

The models can be classified as follows:

- Objective and subjective: when events cannot be described objectively, and there is no official model for their study, the models should be unofficial; they are then based on subjectivity and intuition.

- Analytical and simulation: analytical models are used to obtain solutions and must be solved. Those of simulation are simplified representations of reality, which make it possible to study the effects of the different alternatives.

- Static and dynamic: Static models do not use the time variable, whereas, in dynamic models, time is a fundamental parameter.

- Deterministic and probabilistic: in deterministic models, all the data are known with certainty. Otherwise, it is a probabilistic, random, or stochastic model.

Pitfalls and Decision Making

Decision making is subject to pitfalls: traps of which the decision-maker is not always aware due to his status in the company and the links he has forged with his employees.

So, you have to know that the decision-maker is far from always being who you think. In the same way, as those close to the decision-maker, the other actors of society intervene, in the majority of cases, directly or indirectly.

As noted above, decision making is followed by its implementation. At this stage, different stakeholders are invited to act. In turn, the latter influence the decision itself. Indeed, they have different means to modify, to a greater or lesser extent, the decision as such.

The decision is again modified at the end of the execution phase. Yes, the last performers personalize it, review it, and adapt it to the means at their disposal. They can improve it, or conversely, be harmful to it.

So how do you get around the decision-making pitfalls? First of all, you must be aware that the decision is not frozen and that it will not cease to be modified during the execution phase. To keep it as intact as possibleSteps of the decision-making process in an organization?, it is essential to take these different stakeholders into account. Work must be optimized. The time allocated to each task must take the unexpected into account. The decision and its implementation must be facilitated as much as possible. 

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