4 Factors of Decision Making

May 25, 2021by Faber Infinite

Decision-making is an important process for every organization. Decisions have a business cost associated with them. If the decisions are more efficient and effective, it will save a lot of money for the organization, improve morale, and thus lead to better business outcomes. This Transformation Tuesday, let us look at different categories of decision making:

High Risk and Rare –

These are the high-risk and rare decisions that are made at the leadership level. Such type of decisions can be made more effective and productive by means that encourage constructive and truthful debate.

High Risk and Collective –

These are frequent, high risk, and joint or collective decisions made at the business unit and senior managerial level. To make such decisions effective organizations should work on building robust processes with well-defined objectives, targets, and metrics.

Low Risk and Frequent –

These are low-risk and frequent decisions that are made at the individual or team level. These can be improved by continual dedication by teams and individuals.

Random –

These are frequent and low-risk decisions taken in the organization. Such decisions lead to frustration and waste of time in meetings. However, the efficiency and quality of such random decisions made at the individual or team level can be improved.

Let us look at the 4 factors to be taken into consideration during the decision-making process:
Call All –

The appointed decision-maker calls all related stakeholders for discussion, deliberation, plan, and suggestions. All the assumptions should be cleared.

Make the Decision –

When all the factors have been evaluated, multiple viewpoints have been investigated, trade-offs have been cleared, then the decision-makers should think and make the decision.

Commit –

Once the decision is made, all the stakeholders (who agree as well as disagree), should commit to the decision and its implementation. Both those who agree and disagree should commit.

Share the decision –

Once the decision is made, it is the responsibility of the leadership team to share the decision and its interpretation across the teams. The leadership should also ensure that the message is clear and reaches the appropriate levels in the organization.

As J R Rim quotes – “It is not about making the right choice. It is about making a choice and making it right.”

Written & Compiled by Faber Mayuri

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by Faber Infinite

Faber Infinite is an International Business Management Consulting Organization offering consulting solutions and services for Increase Profitability in Business.

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