Business Decision Making Process
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Decision making is vital to any kind of business. However, the process is complicated and involves several factors. An extremely important part of making a good decision is to receive, evaluate and process information. The ability to distinguish between right and wrong and accepting the responsibility of the consequences of a wrong decision is also important in expanding business. There exist different types of business decisions and various techniques that aid in the process of making them. |
The techniques help in reducing the subjectivity of the matter thereby enhancing the accuracy of a sound decision. The effectiveness of a business increases by promoting cooperation. Creativity and risk taking ability are important factors influencing the selection of the right course of action. If team members and managers always play it safe, then the prospective of the business gets hampered. Decision making is an integral part of running a company, where each and every department must contribute in its own way. The different types of business decisions include strategic, programmed, non-programmed, tactical, and operational decisions. The process of decision making involves steps such as identification of the objectives, collection of information and ideas, analysis of the information, making the right choice pertaining to the course of action, announcement of the course, commencement of the action and finally evaluation of the result. The company may also apply the 80/20 principle in the process. This principle elaborates on using the time and information efficiently to derive positive outcome. It emphasizes that the company should choose the option which will produce 80% of output from only 20% input. It also stresses that within the first 20% of available time period, 80% of the information must be collected and assessed. Another method that can be applied to the process is known as Six Thinking Hats. This is an analysis tool formulated by Edward de Bono which aids in assessing particularly innovative ideas. This promotes parallel thinking in participants and eliminates adversarial proposals. Each participant is required to wear white, yellow, red, black, blue and green hats at the same time and think in a particular manner. It encourages full spectrum thinking and abolishes ego problems. Hence, many industrial tycoons employ this tool in the business decision making process.
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