Traditionally, company managers or corporate leaders made decisions based on their intuitive understanding of the situation. Intuitive decision-making, on the other hand, has some disadvantages. For Example, decision that may lead to cognitive biases.
Cognitive bias is a limitation in objective thinking that is caused by the tendency for the human brain to perceive. The most common cognitive biases are confirmation, anchoring, halo effect, and overconfidence.
We will discuss the systematic decision-making process and the Eight Steps to Decision Making in this blog post.
Systematic approach in decision making helps the organization to make good decisions in solving problems. The divide and conquer strategy is used in the systematic decision-making process, which is the most dependable way to make high-stakes decisions. It divides decision making into major aspects; identifies those that are most relevant to your decision; and applies some hard, systematic thought that leads to a decision.
What Are the Eight Steps to Decision Making?
- Identify and define the problem or situation – here you want to be sure you are framing your problem correctly and not mistaking symptoms for the problem.
- Consider the Nature of the Problem – In what ways is the scenario you’re dealing with problematic? In what ways is it causing you problems? What is the point of seeking a solution? These are the following questions you must answer as you proceed through the eight steps. You are, in essence, identifying your problem criteria.
- Define your objectives – Here, you should be certain of the outcome you want to see as a result of your decision. Clarifying your objectives helps in resolving conflict generated by alternative views.
- Develop Solutions to the Problem- Most problems have more than one solution, usually there are multiple options for dealing with the problem, each with its own set of results and consequences. Make a list of all of these solutions.
- List Pros and Cons – Make a list of the pro’s and cons of each of your potential solutions. Try to do so while considering the long-term implications and remain as objective as possible.
- Select the Best Approach – Examine each of your potential solutions in turn, each with its own set of pro’s and cons, and choose the one that will be the most effective and beneficial
- Execute Your Choice – Now that you’ve identified and chosen your solution from all the possible options, it’s time to put it into action.
- Develop an action plan and communicate – here you come up with steps to implement your decision, it’s important to reflect on it for yourself and to seek the opinion of others.
Decision-making plays a vital role in management. Decision-making is perhaps the most important component of a manager’s activities. It plays the most important role in the planning process.