by C.V.Rajan

Created on: January 09, 2009   Last Updated: October 15, 2010

If there is one quality that distinguishes a good manager from a poor one, it is decisiveness. A person in managerial position who is poor in decision making is fit to be called only an administrator and not a manager. For a professional manager, the decision making process normally involves the following stages:

1) Defining the problem /issues / situations / challenges which calls for a decision making

2) Collecting relevant facts, figures and statistics to facilitate and support the decision making process

3) Identifying the various alternatives of choice

4) seeking opinions and alternative viewpoints from "people who know" and "people who matter".

5) Pondering over the issues peacefully (where time permits) and

6) Deciding on the best choice or a couple of best courses of action.

Some times, decision making may just involve taking "yes" or "no" decision in which case, if the problem or issue is simple, there may not really be a need for any elaborate data collection or need for wider consultations.

However, at times where the issue is of serious nature, even making yes or no decision may involve all the elaborate stages listed above. Example: A company well established in the manufacture of automobile accessories discusses a proposal to diversify in to manufacture of computer hardware accessories. Opinion in the top management is divided - some want to stick only to the proven core business line and some are very enthusiastic to diversify. The Chief executive has to decide yes or no for diversification.

Where the decision making involves multiple choices, it may get more complicated. Let us take the same example and assume that the chief executive decides in favor of diversifying into manufacture of computer accessories. Now, he would be confronted with decision making on several issues. He has to start off with defining the problems.

(1)  Defining Problems / Issues

For example,

* whether to float a separate company for the purpose in a new name, at a new infrastructure or produce the new products in the existing set up

* whether to use the same company name / brand name  (and to utilize the familiarity and reputation)

* whether to go for indigenous or imported technology

* whether to hire totally new managerial team or utilize some of the existing talent pool in the company for key administrative positions

* whether to locate the factory adjacent to the existing factory or find a totally new location, etc.

(2) Collecting Information

In our specific

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