Chapter 14, Problem 1RQ

To determine

List the seven steps in the process of decision making.

Explanation of Solution

Decision making process: Decision making process requires an understanding of a grasp of illegal issues, quantitative and qualitative information, and an ability to discern fact from opinion and sensitivity to ethical concerns.

Seven steps in the process of decision making are as follows:

Step 1:

Clarify the decision problem: The decision made must be clear. Significant managerial skill is needed to define a decision problem in terms that can be addressed effectively.

Step 2:

Specify the criterion: If a decision problem is clarified, the manager must specify the criterion upon which the decision is made.

Step 3:

Identify the alternatives: Decision making includes selecting between two or more alternatives.

Step 4:

Develop a decision model: A decision model is a simplified representation of the choice problem.

Step 5:

Collect the data: Manager is responsible for collecting data and it is the most significant role in the organization.

Step 6:

Select an alternative: If the decision model is framed and the relevant data are collected, the suitable manager takes a decision.

Step 7:

Evaluate decisions effectiveness: Once the decision is implemented, the results of the decision are evaluated with the aim of enhancing future decisions.