Decision Making and Risk-Taking

Decision Making and Risk-TakingSteps in decision makingThe decision making processPlanning for decision makingIntroduction to planningImportant elements of planningSteps in Decision MakingStep 1: Define the Problem

1.1 Size up the situation.

1.2 Set goals and priorities ( Ask yourself )

Step 2: Reevaluate the situation

2.1 Consider your options. The moment the problem has been identified, ask yourself

2.2 Dont make unnecessary decisions. Be aware that the best decision may be to do nothing at the moment. But dont delay just to avoid making a tough or pleasant decision.

Step 3: Gathering Information. In order to solve a problem, you should make yourself an expert on the subject.

3.1 Use your time wisely. If a decision is not immediately necessary, use your time to gather necessary data.

3.2 Seek advice. Secure help from other people whom you think can help you. Dont be shy to admit that you dont know the problem.

3.3 Use all resources. Use the library, 201 files of employees, or any source of facts on the problem.

Step 4: Think of Alternatives. At this stage of the decision making process, any idea is a good idea.

4.1 Be Open. Do not limit yourself to ideas that sound reasonable. Try brainstorming and list everything that comes into your mind.

4.2 Dont judge. Avoid jumping to conclusions. Gather all ideas before considering your alternatives.Step 5: Choose an alternative. Test each alternative carefully, to see how it measures up against others.

5.1 Think Ahead. Try to imagine the consequences of each alternative. Ask yourself, What will happen if? Be thorough, and give each plan a chance.

5.2 Be Practical. Be sure your plan can be carried out.

5.3 Be creative. If necessary, you can combine the best features of several ideas.

Step 6: Put your Decision to Work

6.1 Take action. A good decision is nothing until it is put into effect.

6.2 Inform others. Be sure that all personnel who will be affected by the decision are well informed.

6.3 Follow up your plan. Be sure to check from time to time to see that any changes you made are still in effect or to see if adjustments are needed.THE DECISION MAKING PROCESSAccording to Katey Walker, Nayda I. Torres and Josephine Turner:Recognize the problem.

The decision-making process starts by recognizing that a problem exists; something has to be changed in the situation and there are possibilities for improvement. Big problems musts often be broken down into smaller, easier to deal with, components.

2. Analyze the problem.Once the problem is identified, study it carefully to find exactly what is causing it. Again, be as specific as possible.3. Consider your goals.Consider the goal you want to attain. The goals you select are influenced by the values you have what is important to you. Becoming more aware of your values and the priorities you place on them will help you see more clearly what is desired.THE DECISION MAKING PROCESSAccording to Katey Walker, Nayda I. Torres and Josephine Turner:4.Look for alternatives.

Consider as many alternatives as possible. Try to look for more possibilities than the obvious or habitual ones. If the decision is very important whether human or financial matters it will be better to spend more time and effort in looking for a solution or making a good choice.5.Select the best alternative.After carefully analyzing and evaluating every alternative, select the best one, having in mind the values that are important to you, the goals you are working toward, and the resources you have to work with.6.Put your decision into action.Making a decision doesnt usually end with selecting the best alternative. You must put your decisions into action. Normally, people carry out their own decisions. Sometimes, however, group action by members of the firm, or other groups, must be generated.THE DECISION MAKING PROCESSAccording to Katey Walker, Nayda I. Torres and Josephine Turner:7.Accept the responsibility.

You need to accept the responsibility and face whatever consequences for making the decision. Dont be afraid to make a decision just because you have to revise it again. It is normal to change or adjust your decision because of the fast changing needs of the times.8.Evaluate your results.The outcome or result of your decision must be evaluated to determine its relevance and effectiveness.Check if the information is RELEVANT and UP-TO-DATEIdentify ObjectivesCollect information and ideasAnalyze Information & IdeasChoose Action / Make DecisionCommunicate & Carry out DecisionOutcome & ResultCommunication is essential. Everyone needs to know what is going on and be clear about their own part. They need to feel involved and motivated.Evaluate & ReportThis stage is essential; it must be clear the decision has been effective.Several possible courses each needs to be evaluated to find the best option.Planning for Decision-MakingFour (4) Major Benefits of Planning:

Planning allows the establishment of independent goals.

Planning provides a standard of measurement.

Planning converts values to action.

Planning allows limited resources to be committed in an orderly way.PlanningSteps in decision makingThe importance of planningIntroduction to PlanningPlanning is the most basic of the management functions. This involves the selection from among the alternatives of future courses of action for the business firm as a whole and each department / division / unit within it. The plan can be simple or complex, long-term, middle-term, and short-terms. Normally, the lower management group prepares short-term plan, the middle-management group prepares middle-term plans and the top management group prepares long-term plans.Planning is deciding in advance what is to be done, when, where, how and by whom it is to be done.Important elements of planningAccording to M.U. Qureshi:The essence of planning is looking ahead. It is always concerned with future.

It involves a pre-determined course of action.

This action course is determined after a careful study of alternative courses.

It is a continuous and integrated process.

It always has a dimension of time.

Its main objective is to achieve better results.