Page 71 - DMGT402_MANAGEMENT_PRACTICES_AND_ORGANIZATIONAL_BEHAVIOUR

Management Practices and Organisational Behaviour

Notes 3.7 Decision-making Process

Managers have to make decisions, whether they are simple or extremely complex. Making a
good decision is a difficult exercise. It is the product of deliberation, evaluation and thought. To
make good decisions, managers should invariably follow a sequential set of steps. Decision-
making is a process involving a series of steps as shown in the Figure 3.2.
First Step: The first step is recognition of the problem. The manager must become aware that a
problem exists and that it is important enough for managerial action. Identification of the real
problem is important; otherwise, the manager may be reacting to symptoms and fire fighting
rather than dealing with the root cause of the problem. In order to monitor the problem situation
(decision-making environment), managers may have to look into management reports, check
progress against budgets, compare the results against industry competitors, and assess factors
contributing to employee efficiency or inefficiency, etc. They have to use judgement and experience
in order to identify the exact nature of the problem. In other words, the manager must determine
what is to be accomplished by the decision.

Figure 3.2: Decision-making Process

Recognize the problem and the need for a decision

Identify the objective of the decision

Gather and evaluate data and diagnose the situation

List and evaluate alternatives

Select the best course of action

Implement the decision

Gather feedback

Follow-up

Source: Debra L Nelson, James C Quick "Organisational Behavior – Foundations, Realities, and Challenges"
(Second Edition), West Publishing Company Minneapolis, Page 283.
Second Step: The second step in the decision-making process is gathering information relevant
to the problem. A successful manager must have the ability to weed out the wheat from the chaff
before deciding on a specific course of action. Once aware of a problem, he must state the real
problem. He must try to solve the problem, not the symptoms. The manager must pull together
sufficient information about why the problem occurred. This involves conducting a thorough
diagnosis of the situation and going on a fact-finding mission.
Third Step: The third step is listing and evaluating alternative courses of action. Developing
alternative solutions (to the problem) guarantees adequate focus and attention on the problem.
It helps managers to fully test the soundness of every proposal before it is finally translated into

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