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Tuesday, May 24, 2022

Decision Maker: What is it and why is it important?

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Decision maker in organizations consists of making an important choice to bring more results and improve the company’s performance. These actions can have consequences for the future, both for the business and for employees and customers.

Within companies, decision maker implies great responsibility and is essential for business management. Structured and planned decisions are critical to an organization’s growth and success.

The decision process is continuous and combines knowledge, skills, and experience. It must be worked on constantly and have its risks analyzed so that problems are solved in the best possible way.

On the other hand, if this process fails, it can generate serious consequences and losses.

What is decision maker in organizations?

Decision maker can be defined as the process of deciding on something important, especially in a group of people or in an organization.

It involves selecting a course of action from among two or more possible alternatives in order to arrive at a solution to a given problem.

The decision-making process in organizations is carried out by a group of professionals with the aim of improving the company’s functioning. Thus, it is a continuous and dynamic activity that permeates all other activities belonging to the organization.

Since it is an ongoing activity, the decision-making process plays a vital role in the running of a business. After all, it represents the combination of scientific knowledge, technical skills, and professional experience of all.

In a management environment, the decision cannot be made abruptly. In this sense, there are some steps that must be followed:

  1. Define the problem;
  2. Collect data and information;
  3. Analyze the alternatives;
  4. Choose the best option;
  5. Plan and execute;
  6. Monitor results.

Decisions are made to sustain business activities. And, thus, ensure good organizational functioning at all levels of administration in order to achieve pre-established goals and objectives.

Types of decision making

In the leadership position, decisions cannot arise randomly, as it is from them that the proper functioning of all the company’s processes and operations is guaranteed. But did you know that there are several types of decision making? See below.

Value-based decision

This business decision-making is based on the manager’s personal values, considering his moral guide of right and wrong and the concepts that have been with him for a long time, as well as his influences and references.

It is directly linked to the influences that each person has throughout life, and positive values ​​seek to have a broader view of all situations, while negative values ​​are related to partiality and individuality.

Decision based on conscious and subconscious beliefs

This decision is closely linked to the manager’s experience and can manifest itself with insights generated from past situations. Reflection gives way to analysis, considering how a current choice will manifest itself in the future.

Subconscious beliefs do not allow for a 100% rational decision in a way. The decision based on intuition is a kind of wisdom that cannot be explained scientifically, but that comes from an internal and personal perception.

Data-driven decision

In business routines, a lot is involved in a decision. Therefore, risks must be minimized as much as possible, and relying on data may be the best way to do so.

This type of decision brings more security to the manager based on concrete and reliable data and, in this sense, it is ideal to maintain a routine of organizing and storing documents so that they are available for consultation at any time.

How to improve decision making?

Now that you’ve gotten to know some decision-making types, you might be wondering how to perfect them. Below, we have selected some tips that may help.

Problem identification and choice analysis

In business decision making, the first step is to know the impasse to be resolved and try to see the situation as clearly as possible, considering all points.

Next, make a good analysis of the possible alternatives, separating the positive and negative points of each one of them. It is also valid to project the possible consequences of the selected options. If you prefer, look for an expert on the subject.

Definition of strategic planning

Managerial decision-making requires the manager to think about the company’s objectives and mission, taking into account the products or services it offers, the profile of the customer served, the competition, and the market situation.

It is from this point that a clear and detailed strategic plan can be drawn up. In this way, the chance of the decision to follow the right path is greater, since they are aligned with the business policy.

Knowledge of all areas of the company

Decision making in organizations becomes much more assertive when knowledge of all sectors of the company is obtained. The more information the manager has, the better. Data referring to the financial, human resources, and sales areas, for example, enrich the decision-making process.

In this sense, having a management system that organizes and integrates data is essential to facilitate decisions. ERP can be a powerful ally in storing, processing, accessing, and analyzing relevant information that helps generate business value.

Results assessment

The decisions made and their consequences are a very rich source of experience and learning. Record your past decisions and revisit them at different times when faced with similar situations again.

It is worth remembering that even with complete confidence in your choices, it is important to maintain a plan B. Unforeseen events can happen at any time and depend on numerous factors, so it is recommended to be safe in an emergency.

Make better decisions in your business!

Throughout this content, we explain what decision maker is, the different ways to get there, and we give you valuable tips on how to optimize your choice processes.

Priyanka Sharma
Myself Priyanka, I Love Writing, SEO, and Graphic Design. I'm regularly contributing my knowledge/news on the leading websites.

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