by anon1984

Created on: April 15, 2008   Last Updated: June 09, 2010

Decision is a core transaction of organization. Consequently, one of characteristic in organization is taking decision, and of course, it is one of manager's activities. To be able to compete with their competitors, a profit organization should consider to make a quick right decision. Although it is hard but possible to achieve as long as the managers able to avoid some blunders that may lead a decision to err. For that reason, there is a need to understand the processes of how a decision being produced.

Theoretically, there are four basic stages of decision making processes: having problems, setting goals/objectives, defining alternatives, and choosing of actions (decision). Let discuss them one by one:

(1) Having problems. Decision making processes will be conducted if at least there is a problem. So, the first stage is defining a problem or problems that will be solved.

(2) Setting goals/objectives. Once a problem has been known, then the next stage is setting goals or objectives. This should be defined clearly. It is possibly to elaborate the main objectives into several sub-sub objectives. More spesific of the objectives will develop better framework to achieve it. Framework also helps to give limitation, such as measurability and timeline.

(3) Defining alternatives. To develop several alternatives, the managers should gather and collect relevant and valuable information. They can collect information as much as possible or only collect important and useful information. Both have pros and cons. More information consumes more time and resources while less information may limit the alternatives. Those information will be analysed to define the alternatives. The alternatives are listed together with all advantages and disadvantages of each of them. Therefore, the managers able to evaluate them by comparing the advantages and disadvantages, certainty - uncertainty of cause and effect relationship, and finally the preferences of the manager for probabilistic outcomes.

(4) Choosing of action or namely as decision. Roughly, a decision is a moment in the ongoing process of decision making when a decision maker has decided which alternative that he wants to apply to acheive the objectives. So, after analysing all alternatives, a manager will come with a choice to be implemented called as a decision.

Some theories add additional stage in decision making processes after having a decision. It is called 'implementation and feedback stage'. In fact, this is done after a decision has been produced. In this stage a decision will be implemented into action so outcomes can be measured, either it successes or fails.

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