Scribd
Upload
52 views20 pages

Decision Making Process

The document outlines a structured decision-making process consisting of six steps: identifying the decision's purpose, gathering information, judging alternatives, brainstorming solutions, evaluating alternatives, and selecting the best option. It also introduces various decision-making tools such as SWOT analysis, Fishbone diagrams, Pareto analysis, risk analysis, and benefit-cost analysis to aid in the decision-making process. These tools help organizations analyze problems, assess risks, and evaluate the potential benefits and costs of decisions.

Uploaded by

Taki Md Tajoar Genius
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
52 views20 pages

Decision Making Process

The document outlines a structured decision-making process consisting of six steps: identifying the decision's purpose, gathering information, judging alternatives, brainstorming solutions, evaluating alternatives, and selecting the best option. It also introduces various decision-making tools such as SWOT analysis, Fishbone diagrams, Pareto analysis, risk analysis, and benefit-cost analysis to aid in the decision-making process. These tools help organizations analyze problems, assess risks, and evaluate the potential benefits and costs of decisions.

Uploaded by

Taki Md Tajoar Genius
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 20

Decision Making Process and

Tools
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
Decision Making Process
Step 1: Identification of the purpose of the decision
In this step, the problem is thoroughly analysed. There
are a couple of questions one should ask when it comes
to identifying the purpose of the decision.
•What exactly is the problem?
•Why the problem should be solved?
•Who are the affected parties of the problem?
•Does the problem have a deadline or a specific
time-line?
Decision Making Process
Step 2: Information gathering
A problem of an organization will have many
stakeholders. In addition, there can be dozens of factors
involved and affected by the problem.
In the process of solving the problem, you will have to
gather as much as information related to the factors and
stakeholders involved in the problem. For the process of
information gathering, tools such as 'Check Sheets' can
be effectively used.
Decision Making Process
Step 3: Principles for judging the alternatives
In this step, the baseline criteria for judging the alternatives
should be set up. When it comes to defining the criteria,
organizational goals as well as the corporate culture should be
taken into consideration.

As an example, profit is one of the main concerns in every


decision making process. Companies usually do not make
decisions that reduce profits, unless it is an exceptional case.
Likewise, baseline principles should be identified related to the
problem in hand
Decision Making Process
Step 4: Brainstorm and analyse the different choices
For this step, brainstorming to list down all the ideas is the best
option. Before the idea generation step, it is vital to understand
the causes of the problem and prioritization of causes.
For this, you can make use of Cause-and-Effect diagrams and
Pareto Chart tool. Cause-and-Effect diagram helps you to
identify all possible causes of the problem and Pareto chart
helps you to prioritize and identify the causes with highest
effect.
Then, you can move on generating all possible solutions
(alternatives) for the problem in hand
Decision Making Process
Step 5: Evaluation of alternatives
Use your judgement principles and decision-making criteria to
evaluate each alternative. In this step, experience and
effectiveness of the judgement principles come into play. You
need to compare each alternative for their positives and
negatives.
Step 6: Select the best alternative
Once you go through from Step 1 to Step 5, this step is easy.
In addition, the selection of the best alternative is an informed
decision since you have already followed a methodology to
derive and select the best alternative
Decision Making Tools
SWOT Analysis:

SWOT (strengths, weaknesses, opportunities, and threats) analysis


is a framework used to evaluate a company's competitive position
and to develop strategic planning.
SWOT analysis assesses internal and external factors, as well as
current and future potential
Decision Making Tools
Fishbone Diagram/ Ishikawa Diagram Analysis:

fishbone diagram is a visualization tool for categorizing the


potential causes of a problem. This tool is used in order to
identify a problem’s root causes. Typically used for root cause
analysis, a fishbone diagram combines the practice
of brainstorming with a type of mind map template. It should
be efficient as a test case technique to determine cause and
effect.
Decision Making Tools
Fishbone Diagram/ Ishikawa Diagram Analysis:
Decision Making Tools
Pareto Analysis:

Pareto Analysis is a simple decision-making


technique for assessing competing problems and
measuring the impact of fixing them. This allows you
to focus on solutions that will provide the most
benefit.
Decision Making Tools
Pareto Analysis Steps
Now, we'll take a look at how to carry out a Pareto
Analysis:
1.Identify and List Problems
2.Identify the Root Cause of Each Problem
3.Score Problems
4.Add up Scores
5.Take Action
Decision Making Tools
Pareto Analysis:
Decision Making Tools
Risk analysis

Risk analysis is the process of identifying and


analyzing potential issues that could negatively
impact key business initiatives or projects. This
process is done in order to help organizations avoid or
mitigate those risks
Decision Making Tools
Risk analysis
Decision Making Tools
Benefit-Cost Analysis

A cost-benefit analysis is a process used to measure


the benefits of a decision or taking action minus the
costs associated with taking that action
Decision Making Tools
Benefit-Cost Analysis

You might also like