Decision-Making in Management

It is valuable to note the various decision-making styles briefly described: psychological, cognitive, and normative. Understanding which of these your management uses will go a long way to helping you most effectively negotiate requirements, project scope, and communicate your analytical findings. Another useful takeaway from the article is the description of the three main approaches to decision-making: avoiding, problem-solving, and problem-seeking. Sometimes the right decision is no decision, so avoiding it is not necessarily bad. However, if your manager consistently avoids decisions claiming there is not enough information despite your best efforts to provide it, you may need to find new ways to communicate your findings to allow the manager to have more confidence in making decisions.

The challenge of problem-seeking when it sends the team back to the proverbial drawing board can be overcome with a robust TOR development process and a fully informed and formal scope negotiation process, both of which will help alleviate concerns that the project is not progressing as needed. It will be quite valuable for you to know the individual approach your manager or management team is likely to use and that of the overall organizational culture.

Defining Decision Making

Decision making is the mental process of selecting a course of action from a set of alternatives.


LEARNING OBJECTIVES

Identify the steps and analyze alternatives in a decision-making process


KEY TAKEAWAYS

Key Points
  • Decision making is a process of choosing between alternatives.
  • Problem solving and decision making are distinct but related activities.
  • Time pressure and personal emotions can affect the quality of decision-making outcomes.
Key Terms
  • Problem: A difficulty that has to be resolved or dealt with.

Decision making is the mental process of choosing from a set of alternatives. Every decision-making process produces an outcome that might be an action, a recommendation, or an opinion. Since doing nothing or remaining neutral is usually among the set of options one chooses from, selecting that course is also making a decision.


Difference Between Problem Analysis and Decision Making

While they are related, problem analysis and decision making are distinct activities. Decisions are commonly focused on a problem or challenge. Decision makers must gather and consider data before making a choice. Problem analysis involves framing the issue by defining its boundaries, establishing criteria with which to select from alternatives, and developing conclusions based on available information. Analyzing a problem may not result in a decision, although the results are an important ingredient in all decision making.


Steps in Decision Making

Decision making comprises a series of sequential activities that together structure the process and facilitate its conclusion. These steps are:

  • Establishing objectives
  • Classifying and prioritizing objectives
  • Developing selection criteria
  • Identifying alternatives
  • Evaluating alternatives against the selection criteria
  • Choosing the alternative that best satisfies the selection criteria
  • Implementing the decision


Analysis of Alternatives

A major part of decision making involves the analysis of a defined set of alternatives against selection criteria. These criteria usually include costs and benefits, advantages and disadvantages, and alignment with preferences. For example, when choosing a place to establish a new business, the criteria might include rental costs, availability of skilled labor, access to transportation and means of distribution, and proximity to customers. Based on the relative importance of these factors, a business owner makes a decision that best meets the criteria.

The decision maker may face a problem when trying to evaluate alternatives in terms of their strengths and weaknesses. This can be especially challenging when there are many factors to consider. Time limits and personal emotions also play a role in the process of choosing between alternatives. Greater deliberation and information gathering often takes additional time, and decision makers often must choose before they feel fully prepared. In addition, the more that is at stake the more emotions are likely to come into play, and this can distort one's judgment.

Many choices: Too many choices increase the difficulty of making a decision.

Source: Boundless.com, https://courses.lumenlearning.com/boundless-management/chapter/decision-making-in-management/
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