Decision making and Uncertainty

As defined by George R. Terry, decision-making is the selection, based on some criteria from two or more possible alternatives[1].

From above definition, three critical requirements of decision-making process can be identified thus:

1. Selection – this implies a conscious effort to take a particular course of action
2. Criteria – set of guidelines or conditions for evaluation purpose
3. Alternatives – options available to achieve the objective of taking the decision

Therefore, it is safe to conclude that any course of action that does not at least contain the above conditions cannot be said to be an effective decision-making process. For instance, where there is only one route to a destination, then there is no need to make decision otherwise you are not getting to the destination.

Decision making process has been refined over the years to yield the best decision out of available options based on adopted criteria via different models like PrOACT with Problem as the problem identified within the context of the case or issue being considered, Objective as the target that the decision to be taken should addressed. Most times, Objective is considered as opposite of the Problem. After stating the Problem to be solved and what solution should be as in Objective, available options – Alternatives – will need to be considered based on established criteria. It is important to note that each Alternative will have its own Consequences that need to be reviewed without any bias so that chosen Alternative will achieve the target Objective thereby solving the Problem as stated. When evaluating the Consequence of each available Alternative, issues of Trade-offs, Uncertainty, Risk Tolerance and Linked Decision are to be noted and taken into consideration before any Alternative is chosen as final Decision for implementation.

As narrated above based on learning from Analysis of Business Problems class of EMBA 28 cohort (Lagos Business School), strict application of stated model and similar models in decision making is expected to produce a decision choosing one Alternative out of many options for implementation and achieving our stated Objective, there is still some element of Uncertainty.

It has been stated that in any decision, “Uncertainty is reduced, but never eliminated”^[2], therefore, it is imperative to ask the question: how can we reduce uncertainty in our decision-making process when evaluating available alternatives?

Gathering as much information as possible on each Alternative is the first step towards reducing uncertainty in decision-making process, evaluation, and re-evaluation of each Alternative with potential consequence and trade-off can also assist to reduce uncertainty in our decisions. Reducing the time horizon for decisions both in taking the decision and implementing it can also reduce the impact of uncertainties on our decision[3].

Clearly Uncertainty reduces the effectiveness of chosen Alternative (Decision) to achieve the Objective put in place to solve identified Problem and it (Uncertainty) needs to be reduced to minimal level since it cannot be eliminated. Reducing the size of decision, gather much information on the alternatives, defer decision until the problem is well understood and objective align to solve the problem, focusing on making one decision at a times with provisions for credible worst-case scenario[4] are some steps can assist to reduce the impact of uncertainties in our decision-making process.

[1] Kullabs

[2] Decision Making in Uncertainty (decision-making-solutions.com)

[3] ibid

[4] www.purcellenterprises.ca