How an Effective Decision Making Process Could Have an Impact on an Organization’s Success

Topics: Decision making, Decision theory, Decision making software Pages: 5 (1580 words) Published: February 24, 2009
While Managers do not control many factors affecting the success of their decisions, they do have substantial control over the process they use to make decisions. Discuss how an effective decision making process could have an impact on an organization’s success. You need to evaluate the process and show how it relates to the success of an organization.

Everyone goes through similar decision-making processes umpteen times every day, regardless of their position in the organization. From the ground up - the security guard who needs to decide whether a person is authorized to enter the premise, to the top management, who at times must decide whether it is the time for the company to expand its market.

A good decision can reap in handsome profit for the company while a poor decision can do the exact opposite - throw the company into the reds. Decisions can make or break an organization, especially so, when the survival of an organization is solely based upon steering clear of the red zone.

As the old saying goes, prevention is better than cure. The importance of a good decision is obvious here thus it is important to have an effective decision-making process so as to prevent poor decisions from being made.

There are five steps to an effective decision-making process. The first step is to identify the problem, the recognition that one even exists. Once the problem had been identified, alternative solutions are to be generated, usually through a technique known as brainstorming. Brainstorming encourages group members to generate as many ideas as possible, without prior evaluation, this means that even far-fetched ideas are accepted so as to generate a high volume of ideas. Once there is a ready pool of alternative solutions, the evaluation and selection of alternatives can then proceed. The advantages and disadvantages of each alternative should be carefully considered before one is chosen. Every alternative should be evaluated according to six criteria, namely feasibility, quality, acceptability, costs, reversibility and ethics. The final step of an effective decision-making process is the implementation and monitoring of the chosen solution.

In an organization, decisions are made not only vertically down but also up and across the horizontal channel. It doesn't matter from which level is the decision made and for whom the decision is for. Decisions are bound to affect other departments/levels.

For example, an organization is experiencing problem with its sales department, the sales figures are just not moving! The management level needs to make a decision to rectify the problem. 'What causes our sales to slow down?' the management might ask. Is it the product itself? How the market perceived the product? Or is it due to inadequate advertising by the marketing department? Or the problem actually lies with the salesman themselves?

The management level needs to evaluate all the possibilities and then choose the correct solution to the problem. Any solution of theirs' will definitely affect more than one department.

If the problem lies with the salesperson, most likely the management will either dismiss them and hire more competent candidates or send them for relevant trainings and upgrading. The dismissal and hiring of new salespersons will mean work for the human resource and finance department. One is in charge of hiring them while the other is in charge of their payroll. Thus in this way, they become affected as well.

Since we are at the topic of dismissing/hiring new employees, is this decision a right or wrong one?

To rectify a sales problem, dismissing employees might be the easy way out, but is it really as simple as it seems?

The dismissal of the employees will bring to the organization more cons than pros. Through words of mouth, the public will perceived that the company retrenched its employees whenever it...
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