The document outlines the 7 steps in decision making: 1. Identify the problem by defining it clearly. 2. Gather relevant information by collecting and classifying facts. 3. Identify alternative courses of action by considering all options. 4. Weigh the alternatives by evaluating quantitative and qualitative factors. 5. Choose the best alternative based on factors like resources and risk. 6. Implement the decision by communicating it, assigning responsibility, and developing procedures. 7. Review the decision by comparing results to objectives and identifying any deviations.

1. STEPS IN DECISION
MAKING
Barath Kumar Babu

2. Decision making
 Decision making is the process of making choices by identifying a
decision, gathering information, and assessing alternative
resolutions
 “Decision making is the selection of a course of action among
alternatives” – Harold Koontz

3. Steps in decision making
PROBLEM

4. 1. Identify the problem
 A problem is defined as the discrepancy
between an existing and a desired state of
affairs
 In order to take a decision first we must
identify the problem.
 It involves defining and formulating the
problem clearly and completely.

5. 2. Gather information
 After the problem is defined, the next step in the process of decision-making is,
analyzing the problem.
 It involves the collection and classification of as many facts as possible.
 Collection of relevant and accurate data is essential because the quality of decision
will depend upon the quality of data used.
 Some of the factors which are relevant in decision making are:
1. Return on Investment
2. Effect on Resources
3. Opportunity Cost

6. 3. Identify alternatives
 Majority course of action will have alternatives.
 A course of action does not become the best merely because it has been in use for
a long time.
 Hence, the sound decision necessitates the consideration of all alternatives
Example: Make or buy
Make
Buy

7. 4. Weigh the difference
 The next step is evaluating them so as to choose the best one.
 While comparing the alternatives, various factors that are given here
under are to be considered.
 Quantitative Factors – factors which can be measured e.g., fixed and
operation costs.
 Qualitative Factors or intangible Factors — factors which cannot be
measured i.e., unmeasurable factors, e.g., labor relations, change in
technology.
 While evaluating the qualitative factors, the planner should see whether
these factors can be quantitatively measured. If they are found not to be
quantitatively measurable, then he should assess the importance and
then come to a conclusion.

8. Example
0
1
2
3
4
5
Swift Micra Brio Baleno
Efficiency Power Budget Safety

9. 5. Choosing among alternatives
 After the evaluation of various alternatives, the next step is
deciding the best alternative.
 We must take into account the economy, risk factors, the limitation
of resources, feasibility of its implementations, etc., at the time of
deciding the best course of action.
 Once the alternative is chosen, step 6, implementation can be
done

10. 6. Implementation
 Communicating the decision to all the employees concerned.
 Assigning the responsibility of carrying out the decision to certain
employees.
 Developing the procedure for the purpose of executing the
decision.
 Developing feed back mechanisms to check on the progress of the
implementation

11. 7. Review of decision
 This is the final step in decision making.
 After the implementation is done, the chosen alternative is
reviewed if they’ve met the desired objectives by comparing the
results with desired objectives.
 Then the last step is to find out the deviations.

12. THANK YOU