Business decision making involves identifying goals, gathering information, analyzing options, choosing a course of action, communicating and implementing the decision, and evaluating the results. Owners and managers typically make the decisions, and the process includes assessing the outcome and making changes if necessary.
Business decision making typically contains several steps. While every decision may not require every step, some of the steps will undoubtedly apply. The first stage is to identify goals, gather information, and analyze options for decision outcomes. The second stage involves choosing a course of action, communicating and implementing the decision, and evaluating the results. Owners and managers are typically the people who make business decisions.
Identifying goals comes when a business needs to change operations. A decision may be needed to improve a product, enter a new market, or hire new employees. In each case, decision makers must identify the desired outcome. Increased profit, better product quality or better market position can be goals for business decision making.
Decision makers need to gather information relevant to the decision. Specific goals lend people to certain information-gathering processes. Timely, relevant and valid information is needed to make a decision. Reviewing information at different stages can help people determine when they have adequate data for business decision making.
Analyzing the information collected is the final step before making a decision. Decision makers look at the different outcomes and determine which one is best for the company. Additional information may be needed to answer questions about possible decisions. Ideas are also needed to determine the best course to implement a new decision.
Choosing a course of action is the first step of the second stage of business decision making. Decision makers choose the best option for the identified objectives and the planned outcome. While an individual may have the final say, a works council may also take part in the decision-making process.
Owners and managers communicate and implement the decision to all necessary parties. Once communicated, plans for implementation go into effect. Business decision making ranges from the decision makers to the personnel required to perform the tasks. Decision makers often oversee the process to ensure that all necessary steps are taken to get the maximum results from the decision.
An evaluation process is the final stage in the business decision-making process. Decision makers use this step to review a fully implemented decision to determine the company’s benefit. An assessment is also needed to make slight changes in the decision-making process. In some cases, a company may need to interrupt the processes resulting from the decision because the results are not what they wanted or expected.
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