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Decision Making - Win Big With The Right Course Of Actions

In the business world, opportunities and possibilities proliferate. Decision making allows key people to make the most fitting course an organization should take to capture and utilize these prospects.

Aug 01, 202215 Shares539 ViewsWritten By: Alastair Martin
Jump to
  1. Importance Of Decision Making
  2. Decision-Making Types
  3. Decision Making Process
  4. What Are The 7 Steps Of Decision Making?
  5. People Also Ask
  6. Conclusion

When it comes to good ol’ decision making, executives and professionals typically adhere to time-tested models and strategies.

Once in a while, though, some would devise novel ways of making decisions.

One Indian engineer and researcher recently did that.

In April 2022, Shuby V. Deshpande blogged about “decomposing decision making” to identify the best option or choice.

The inspiration came to Deshpande after attending an event where Evan Charles Moore shared how DoorDash followed a certain decision making framework.

Moore co-founded the San Francisco-based food delivery company and was its former chief operating officer.

In his own version of Moore’s framework (“a twist” of it, he wrote), key decision makerswill enumerate viable options to attain a specific goal.

Deshpande referred to such options as “strategies.”

A set of “criteria” will then be created to assess these strategies, with each criterion receiving an “importance score.”

Finally, Deshpande stated, “Do a weighted average (importance score * criteria score) for each strategy.”

The highest-scoring strategy will be the chosen course of action.

This new concept only confirms how decision making can be such a flexible process.

Decision-Making in Organizations

Importance Of Decision Making

Shuby V. Deshpande’s framework for decision making is discussed in detail (with matching illustrations) in his blog.

It even led to a brief conversation at social news website Hacker News.

While some agreed and others found fault in it, two aspects of it remain inarguably true about making decisions:

  • It’s important.
  • It could get tedious.

From Principles of Management (2019), a peer-reviewed textbook published by OpenStax:

Decision making is the action or process of thinking through possible options and selecting one.

Its definition varies, with some more elaborate or more technical, but this one from OpenStax will be sufficient to give an idea about it.

First and foremost, the importance of decision making is that it shall lead an organization to a favorable result.

It could be finding a solution to a problem (or preventing one), resolving internal conflicts, mitigating the negative impacts of a local or global crisis, etc.

Decisions are made for the present and for the future.

Every day multiple decisions are made to ensure a smooth and productive day-to-day operations and workflow. Therefore, making decisions means working on the present and future stability of the organization.

Moreover, a decision has a short and long-term effect.

As mentioned in Principles of Management (2019):

Decision making has an impact – sometimes quite significant – on the effectiveness of the organization and its stakeholders.

Making decision is crucial as it affects:

  • the life of the organization/company/businessand its survival
  • profitability
  • expenditures
  • employee morale (which then affects individual and collective work performances and productivity)

So, a decision can either spell success (e.g., higher revenue) or doom (e.g., bankruptcy).

What Is Good Decision-Making?

When making decisions, there are guidelines to determine if one is doing it right.

Well, there should be.

Decision making is a make-or-break process.

Satyendra Kumar Sarna, an Indian professional who has had work experience in an executive capacity for over 40 years, recommends ways to arrive at “quality decisions.”

From his website IspatGuru.com, below are Sarna’s pieces of advice to serve as a guide to good decision making:

1. Use “meaningful and reliable information.”

2. Stick to “logically correct reasoning.”

3. Make a “commitment to follow-through.”

4. Think of “creative, achievable alternatives.”

A member of a four-man founding team of a startup explaining his decision making model
A member of a four-man founding team of a startup explaining his decision making model

Decision-Making Types

There are different types (or styles) of decision making.

Typically, they are categorized as directive, analytical, conceptual, and behavioral.

In his article for The Enterprisers Project, Sanjay Malhotra, the chief technology officerof the award-winning Canadian app Clearbridge Mobile, offered his views on them.

Malhotra explained them in the following ways:

Directive Decision Making

This style is suitable when the cause-and-effect of any issue/problem at hand is clear and an appropriate solution/action is agreeable for almost everybody.

Decisions are “quick.”

Malhotra describes those making this as “very rational” and with “low tolerance for ambiguity.”

They tend to weigh things around (the pros and cons) based from their own knowledge and experience.

Analytic Decision Making

Perfect for situations where a string of options is available, and it could be a bit tough to pick one.

Use when there’s “more than one right answer.”

Though this style takes a more balanced approach when seeking for solutions, it’s “time-consuming.”

Conceptual Decision Making

This style is fitting when there are “many competing ideas” because “no immediate solution” can be identified for the problem at hand.

Opens opportunities for “creative thinking and collaboration.”

This one is also recommended when making long-term plans.

Behavioral Decision Making

This style is “group-oriented” as more people participate and work together to come up with a solution.

Entertains “different outlooks and opinions.”

Focuses more on tried and tested solutions than exploring new ones.

Decision Making Process

In the corporate world, the name Peter F. Drucker will always be held in utmost esteem as “the founder of modern management.”

In 1967, Drucker (1909-2005), an Austrian-American educator and author (39 books!) wrote an article, “The Effective Decision.”

Republished by Harvard BusinessReview, its contents remain valid – and valuable – up to this day.

Classifying The Problem

If the problem is a “generic” one, use established rules or principles to handle it.

If it’s “exceptional and unique,” confront it as it is, and, whenever necessary, create new rules or adapt something innovative to solve it.

Defining The Problem

When doing this, Drucker warned about the “plausible but incomplete” definition of the problem.

On this part of the decision making process, the decision makershould ask:

Does the definition explain the observed events, and does it explain all of them?

So, when defining the problem, think of anything “atypical” or “unusual” that may occur.

Specifying The Answer To The Problem

When making a decision, clearly identify:

  • what it will accomplish
  • what objectives will it arrive at
  • what “minimum goals” will it achieve
  • what conditions will it satisfy
A decision making group discuss possible alternatives written on sticky notes posted on the wall
A decision making group discuss possible alternatives written on sticky notes posted on the wall

Deciding What Is ‘right,’ Rather Than What Is Acceptable, In Order To Meet The Boundary Conditions

Don’t look for an “acceptable” decision; rather, pursue the one that’s “right.”

Compromise if you must but always proceed with great caution.

Knowing first what is the right thing to do will guide you when making compromises.

Building Into The Decision The Action To Carry It Out

Commit to carry out a decision, and ensure that whoever will carry it out is capable of doing so.

Convert intention into action.

In addition, changing one’s attitude or behavior can lead to effective decisions.

Testing The Validity And Effectiveness Of The Decision Against The Actual Course Of Events

People are not perfect creatures; therefore, constantly test the decisions made and then analyze the results and feedback.

Never disregard feedback.

What Are The 7 Steps Of Decision Making?

For those wishing to know a more “modern” approach, the University of Massachusetts Dartmouth listed its own stages in decision making:

These seven steps by UMass Dartmouth are easy to process:

  • Identify The Decision
  • Gather Information
  • Identify Alternatives
  • Weigh The Evidence (The “evidence” Refers To The Alternatives That Need To Be Tested.)
  • Choose Among Alternatives
  • Take Action
  • Review Your Decision

People Also Ask

What Are The Six D's Of Decision Making?

In her paper published by the National Center for Biotechnology Information, Kristina L. Guo, Ph.D., introduced a decision making model.

Originally designed for healthcare managers, the DECIDE model can be used by other decision makers out there:

1. “D = define the problem”

2. “E = establish the criteria”

3. “C = consider all the alternatives”

4. “I = identify the best alternative”

5. “D = develop and implement a plan of action”

6. “E = evaluate and monitor the solution and feedback when necessary”

What Are The Five 5 Types Of Decision-Makers?

As the answers vary, this article chooses to feature the one based from a survey by American management consulting firm McKinsey:

1. Visionary(encourages people to voice out their opinions, whether positive or not)

2. Guardian(upholds fairness and balance)

3. Motivator(described as “charismatic”)

4. Flexible(known for being “versatile”)

5. Catalyst(a “good” decision maker and implementer)

A male CEO buttoning his navy-blue suit
A male CEO buttoning his navy-blue suit

Who Are Organizational Decision Makers?

In an organization, decision making is usually made by corporate executives.

These executive-level managers, AKA “c-suite” or “c-level” executives, are the:

  • Chief Executive Officer (CEO)
  • Chief Operating Officer (COO)
  • Chief Financial Officer (CFO)
  • Chief Technology Officer (CTO)
  • Chief Marketing Officer (CMO)
  • Chief Human Resources Officer (CHRO)

Vice presidents, regional directors, department heads, and managers also make decisions.

How Do I Improve My Decision Making Skills?

From some of the members of the Forbes Coaches Council:

1. Use your head, heart, and gut feeling.

2. Don’t focus on being perfect; rather, focus on making progress.

3. Analyze the outcome of not making a decision.

4. Think first of the stakeholders (e.g., customers).

5. Constantly check your goals and biases.

Conclusion

At the end of the day, people will still ask, “So, what’s the best decision making style or model to follow?”

The one created by Shuby V. Deshpande could be less effective, as effective, or far more effective than the one conceptualized by Evan Charles Moore.

But that’s not the main issue here.

A 2021 Forbes article mentioned about the findings of some researchers at Meseekna, a New York-based company that provides metacognitive assessments.

According to the article:

The researchers are quick to point out that there is no ‘best’ decision making style, just like there is no ‘best’ personality or cognitive style.

Making a decision is already a good course of action.

Do more and explore further and the power and wonder of decision making will unfold in the process.

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