Business Management – Using a Process to Make Effective Decisions

An important business management skill is the ability to make effective decisions. When it comes down to it, the most highly paid corporate executives and managers are financially rewarded by how effectively they make these decisions. These decisions are based on solving problems as well as expanding and developing the business.

Successful and effective managers use a well thought out process to make their decisions. These decision making processes enable managers to make the best decisions quickly. When it comes to a decision making process it can be broken down into three simple stages. These stages include the following:

• Information
• Analysis
• Taking action

The first part of the decision making process provides the trigger or the reason to take action based on the facts and information that is available at hand. The second stage is to analyse the situation to identify certain causes and then come up with potential solutions to the problem. At this stage it is important that the manager has a thorough understanding of the purpose of the decisions that are to be made. The next stage is the ability to make fast decisions based on the information available.

Making the right decision will be influenced greatly by how well you understand all the issues and factors involved. An effective manager will approach this by making a detailed list of the issues or criteria involved. For example, if you are ordering new machinery and you are deciding between which suppliers to choose then your decision criteria should include the companies reliability, training, installation and customer support.

Obviously an important criteria is cost as you have to keep within the budget. However, a decision should not be made solely on cost as the least expensive may not be best option. When making a decision list your criteria in order of importance. By weighting each criteria it will enable you to narrow down those key criteria that will have the most impact on making the final decision.