DECISION MAKING

By: Mark Joseph G. Villanueva &

Mark Anthony Y. Rosales
Decision Making

 A decision is the conclusion of process by which one chooses

between two or more available courses of action for the
purpose of attaining a goal.

 It is the process of selecting the right and effective course of

action from two or more alternatives for the purpose of
achieving a desired result or outcome.
Factors in Making an Effective Decision

 Perception  Risk
 Goals  Resources
 Priority  Values
 Acceptable
The Six C’s of Decision Making

1. Construct
2. Compile
3. Collect
4. Compare
5. Consider
6. Commit
The Six C’s of Decision Making

 Construct a clear picture of precisely what must be decided.

 Compile a list of requirements that must be met.

 Collect information on alternatives that meet the requirements.

The Six C’s of Decision Making

 Compare alternatives that meet the requirements.

 Consider the “what might go wrong” factor with each

alternative.

 Commit to a decision and follow through with it

Types of Decisions

1. Strategic Decision
• Decisions that has long-term or material impact on a
company.
Ex.
The election of officers and executives,
Annual budgets and audits,
Shareholder distributions
Types of Decisions

2. Tactical Decisions
• Decisions that concern the more detailed implementation of
the directors’ general strategy, usually with a medium-term
impact on a company.
Ex.
Size and structure of a work force,
Sales and marketing strategy
Types of Decisions

3. Operational Decisions
• The day-to-day decisions that only have short-term impact on
a company.
• Operational decisions generally are very specific and have a
high degree of certainty.
Ex.
Scheduling employees, Trainings,
Purchasing office supplies
Two Classifications of Decisions

Programmed Decisions - Decisions that are repeated over time

and for which an existing set of rules can be developed to guide
the process.

Non-programmed Decisions – unstructured decisions that are

generally based on criteria that are not well defined. These are
also referred to as non-routine decisions or as high-involvement
decisions.
Characteristics of a Good Decision

 Positively impact others  Systematic

 Replicable  Accountable
 Foster opportunity  Involve self-awareness
 Executable
Decision Making Techniques and
Tools
• Marginal Analysis

• SWOT Diagram

• Decision Matrix
Marginal Analysis

• Marginal analysis weighs the benefits of an input or activity

against the cost.

• It takes preferences, resources, and informational constraints

into account, so managers can make more optimal decisions
based on this informations
SWOT Analysis

Strengths: What does your company do better than its competitors?

Weaknesses: Where can your company improve?
Opportunities: look at your strengths and think of how you can
leverage them to create new openings for your business and also
consider how eliminating a specific weakness could help you open
new opportunities.
Threats: Determine what challenges stand in the way of achieving
your goals.
SWOT Analysis

• A SWOT analysis can help you identify the forces that

influence a strategy, action or initiative.

• This information can then be used to guide you in the right

direction and support your business decisions.
Decision Matrix

• When dealing with multiple choices and variables, a decision

matrix can bring clarity to the disarray.

• It is similar to a pros/cons list, but it allows you to place a level

of importance on each factor.
Steps in Decision Making

Step 1: Identify your goal

Step 2: Gather Information for weighing your options
Step 3: Consider the consequences
Step 4: Make your Decision
Step 5: Evaluate your Decision
Step 1: Identify Your Goal

One of the most effective decision making strategies is to keep an eye on

your goal. This simply means identifying the purpose of your decision by
asking yourself what exactly is the problem that needs to be solved? And why
does this problem need to be solved?
Figuring out what's most important to you will help you make good
decisions. When you know the reason why you have making a particular
decision; it will better serve you in staying with it, and defending it.
Step 2: Gather Information for Weighing Your
Options
When making good decisions it is best to gather necessary information that is
directly related to the problem. Doing this will help you to better understand
what needs to be done in solving the problem, and will also help to generate
ideas for a possible solution.
When gathering information it is best to make a list of every possible
alternative; even ones that may initially sound silly or seem unrealistic.
Always seek the opinions of people that you trust or speak to experts and
professionals, because it will help you to come up with a variety of solutions
when weighing all your options for a final decision. You will want to gather
as many resources as possible in order to make the best decision.
‍
Step 3: Consider the Consequences

This step can be just as important as step one because it will help you
determine how your final decision will impact yourself, and/or others
involved. In this step, you will be asking yourself what is likely to be the
results of your decision. How will it affect you now? And how will it affect
your future?
This is an essential step because it allows you to review the pros and cons of
the different options that you listed in the previous step. It is also important
because you want to feel comfortable with all your options and the possible
outcome of whichever one you choose.
Step 4: Make Your Decisions

Now that you have identified your goal, gathered all necessary information,
and weighed the consequences, it is time to make a choice and actually
execute your final decision. Understanding that this step can cause some
people a lot of anxiety is important because this is where you have to trust
your instincts.
Although you may still be slightly indecisive about your final decision, you
have to take into account how this makes you feel. Ask yourself, does it feel
right? And does this decision work best for you now, and in the future? When
you answer those questions back, you should feel good about the result.
Step 5: Evaluate Your Decision

Once you have made your final decision and put it into action, it is necessary
to evaluate the decision and the steps you have taken to ensure that it works.
This final step is probably just as important as step one, if not more
important, because it will help you to further develop your decision making
skills for future problems. This step is also fundamental because it may
require you to seek out new information and make some changes along the
way.
Remember, this step requires some patience and it can also encourage
perseverance. Why? Because it may take some time to see the final outcome.
Recognizing that if the first decision is not working, you may have to go back
to step two and choose another option.
Common Mistakes and Drawbacks in Decision Making

 Misidentifying the problem

 Having a single source
 Having to many sources
 Overestimating the outcome &
 Poor timing
Misidentifying the Problem

Many times the problem will be obvious; but there may come a time
when identifying the main problem is not that easy. When this issue
arises, figuring out exactly what it is, and where you need to focus
your efforts will save you a lot of time and energy in the long run.
Having a Single Source

When considering the consequences, you must be open to a broad

choice of alternatives in order to find the best solution. This can
become a problem if you rely solely on a single source of information
because that one source may not b reliable, or may not be completely
inline with the problem; thus altering your chances of making the best
decision.
Having Too Many Sources

Having a variety of sources is usually not a bad thing; but not in every
situation. Collecting as much information as possible can be very
helpful at arriving to a decision, but an overload of information can
leave you confused and misguided, and prevents you from following
your intuition. Remember, trusting your gut instincts is a major key to
making good decisions.
Overestimating the Outcome

When making a decision and putting your plan into action you should
have taken care to weigh all your valid options. Making a decision
based upon an outcome that may not be plausible will not help you
solve the problem.
Poor Timing

Time can be a futile friend. Sometimes it is good, and sometimes it is

not. When making major decisions, it beneficial to take your time in
order to make the best choice from your options. But understanding the
timing process is crucial because sometimes it is best to delay a
decision, and other times delaying a response can cause more
problems. There are also times when making a quick decision is
advantageous because it allows you more time to make necessary
changes should problems arise.
In summary, we all have to make many decisions throughout our
daily lives. Some of these decisions require little effort, while
others require more time and deeper thought before coming to a
final solution. Remember, there are five basic steps to good
decision making. Why is those five the ideal number? Because a
significant part of decision making skills is understanding and
knowing a simple technique; and also regularly practicing that
technique.
THE END
Thank you.