• What is the process of decision making? Also give example of it.
  • A choice among two or more alternatives is called decision.

The business decision-making process is a step-by-step process allowing professionals to solve problems by weighing evidence, examining alternatives, and choosing a path from there. This defined process also provides an opportunity, at the end, to review whether the decision was the right one.


  1. Identify a Problem:          

                                                               You must first decide what issue needs to be resolved or what question needs to be addressed before you can make a decision. Clearly state your choice.

Every decision starts with a problem.If you need to achieve a specific goal from your decision, make it measurable and timely. For example, Romina is a businesswoman, who needs a good and fast speed car for her daily use.

  • Identifying Decision Criteria:  

                                                                     Once you have identified your decision, it’s time to gather the information relevant to that choice. The decision criteria are important and relevant to the resolving problem. Every decision-maker has criteria guiding his or her decisions even if they are not explicitly stated. In our example, Romina decides after careful consideration that fuel capacity, power, and speed, warranty, of the car are the relevant criteria in her decision. Now, we have the following criteria:

•             Fuel capacity

•          Power of car

•          Speed of car

  •     Warranty of car
  • Allocating Weights to the Criteria:

                                 If the relevant criteria aren’t equally important, the decision maker must weigh the items in order to give them the correct priority in the decision. The weighted criteria for our example are:

•          Fuel Capacity…………10

•          Speed of car…………9

•          Power of car…………8

•          Warranty of car……9

  • Developing Alternatives: 

                            The fourth step in the decision-making process requires the decision maker to list viable alternatives that could resolve the problem. In this step, Romina needs to be more creative. Romina identifies four best cars as possible choices. They are:

  • Suzuki
  • Toyota
  • Civic
  • BMW
  • Analyzing Alternatives:     

                                             Once alternatives have been identified, a decision maker must evaluate each one. Using the criteria established in step 2. After doing some research Romina gave each alternative a value. Keep in mind that these data represent an assessment of the four alternatives using the decision criteria.

                                                 Suzuki     Toyota     civic      BMW
Fuel capacity     10            8              9            10
Speed                    8             9            10             9
Power                  9            10            8              8
warranty                        8              7            8              9

Now when she multiplies each alternative by the assigned weight, you get the weighted alternatives. The total score for each alternative, then, is the sum of its weighted criteria. For example,

                                              Suzuki         Toyota           civic           bmw
  Fuel capacity         100                   80                      90                 100

Speed                        80                   90                    100                  90

Power                       86                  100                     75                  80

Warranty                 80                    70                     70                  90  

Total                   346             340               335             350   
  • Selecting an Alternative:          

                                                 This step in decision making process is basically choosing the best alternative or the one that generated the highest total in ‘step 5’. Romina would choose the bmw because it scored higher than all the alternatives.

  • Implementing the Alternative:

                                    In this step of decision-making process, you put the decision into action by conveying it to those affected and getting their commitment to it. After selecting the alternative, Romina put the decision into action. She bought bmw and first tests it. She was fully satisfied with the performance of the car. She became confident to take it to use on daily basis.

  • Evaluating Decision Effectiveness:

                                         The last step in the decision-making process involves evaluating the outcome or result of the decision to see whether the problem was resolved. If the evaluation shows that the problem still exists, then the manager needs to assess what went wrong. Was the problem incorrectly defined? Were errors made when evaluating alternatives? Was the right alternative selected but poorly implemented? If the problem is not resolved, then you have to do the process again. But in our example, Romina was satisfied with her car.  That means, her decision was very good to buy a BMW that’s why she used it for daily purposes.

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