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Free Case Study on Decision Making

Case Study on Decision Making

HOW TO MAKE A DECISION
Management is decision-making. It’s been estimated that about 75 percent of the average manager’s time is spent on the decision-making process: preparing to make a decision, reaching that decision or putting it into effect. But this is not to say that a manager should insist on making every decision required within the department. In fact extreme concentration of decision making authority is frequently a sign of ineffective management.

Another important factor is proper preparation for decisions. One of the most dangerous mistakes a manager can make is reaching a decision before completely sure of all the facts. A wrong decision hastily reached can nullify months of hard work. So postpone your decisions until you’ve been able to collect and evaluate all pertinent information. Be careful not to let caution lapse into procrastination. Once you have all the facts that you need, make your decision as speedily as possible. But don’t sacrifice wisdom for speed. If time is short you may have to make and act on a decision before you completely sure of it. Try to decide which phases of the problem are the most crucial; then solve these first and return to the less crucial items later.

The following four points form a systematic approach to sound decision-making. Using this approach will help you reduce to a minimum the risks involved in decision-making, while you improve your decision-making performance at the same time.

STEP I – IDENTIFY THE REAL PROBLEM

One of the main reasons for poor decision-making is that few individuals get off on the right foot when they try to solve a problem. All too frequently, they start to look for a solution as soon as the problem is raised – often before they are really sure what the problem is. This procedure will lead them to an answer to the wrong question. Thus you can see that the most important factor in decision-making is defining the problem and pinpointing its critical factors.

A Checklist to Help You Discover the Real Problem
____ List the facts you need to know
____ Consult with other department heads
____ Check the accuracy of your facts
____ Check the facts with department workers
____ Examine the facts in terms of your past experience
____ Review all company and departmental policy which might apply
____ Study the written record
____ Identify the main obstacles

STEP II – CONSIDER THE ALTERNATIVES
After you have completed your preliminary checking and evaluation, you will probably set two or more possible solutions. You should exercise extreme caution at this point, since the solution that seems the best at first glance is quite often the wrong one. This is because you’re apt to have preconceived notions – totally unrelated to the facts – about what the solution should be. Again, a checklist can help you decide which alternative is the best.

____ What will this alternative’s effect be on the purchasing function?
____ Will precedents be set?
____ How does this alternative affect other departments?
____ Will it meet top management objectives?
____ Will it eliminate the possibility of similar obstacles cropping up in the future?
____ Is the solution legal and ethical?

STEP III – MAKING THE DECISION
Once you have accumulated and evaluated all the facts, you should be prepared to make your decision. Try to compare the problem to existing policies and procedures, or to precedents which have been established in previous situations. At all times bear in mind the objectives of both your company and your department. Then, if you’re sure of yourself, make your judgment.

If, however, you’re still not absolutely clear in your mind which solution is best for your company, take the problem to your superior and ask for advise. Don’t ask that the decision be made for you; this is your job. But no superior will resent your asking for help in arriving at a final decision, so long as you have done all that can be expected of you.

STEP IV – WHAT TO DO ONCE THE DECISION HAS BEEN MADE

What should you do once you reach your decision? The answer is obvious: Take Action. Not taking action is no better than not making a decision. But proper timing is important. When you have arrived at your decision, you must be sure to do all the following things – and you must do them in this order or one similar to it:

1. Let all concerned know exactly what your decision is as soon as possible.
2. Be sure that they understand it completely. If all points are unclear, explain them.
3. See that the decision is put into effect immediately.
4. Supervise very carefully the way the decision is carried out, constantly evaluating its results and effects.
5. Always be prepared to listen attentively to any suggestions, or complaints, pertaining to your decision.
6. If at any time you should decide that your decision was wrong, withdraw it at once, letting all concerned know that you are doing so. Go through the process of making your decision again, in the light of whatever new facts you have, and then put your new decision into effect.
7. Carefully document everything connected with your decision. This is especially important in the case of your more critical decisions.
8. Be ready to admit your mistakes and assume full responsibility for them. By not owning up to them you’ll cause a tremendous amount of headaches for not only you but for your department and for the company. Always be honest!
9. Finally, if you are sure that your decision is the right one, stick by it.

When you have made your decision and taken action, don’t let it die on the vine. Nobody can find the perfect solution to every problem every time. Every solution has some bugs in it at first. Be ready for them. In most cases, the basic elements of your decision are going to be the right ones; all that you will really need to do is make some minor changes to make sure that the solution will continue to work.

ANECDOTE
There is a anecdote told about the way Napoleon decided when a decision was required of him. According to the story, he never opened his mail until at least two weeks after he received it. By that time all the petty problems had been solved without his help, and he was able to devote his time to solving the truly serious problems which still remained.

Napoleon’s procedure would of course, be totally impractical for our operations, but the story does illustrate one very important point; Before you as a manager, devote your time and effort to finding the solution to a problem, make sure that it isn’t a problem that a subordinate could – and properly – handle.

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