In the previous article we looked at types of decisions those that are generic in nature and decisions that are unique to the business context. This article will now explore the steps involved in making a decision and constraints that impact the ability to make decisions.

Steps Involved in Making a Decision

Research has identified that there are a number of common steps involved with making decisions.

1. Define the problem/issue requiring a decision

It is really difficult to make a decision if there is ambiguity surrounding the problem/issue to be resolved. However there is more too it. In order to make a viable decision regarding a particular problem/issue it is important to understand the objective to be achieved when making this decision. This will influence the decision reached eg: it can be whether the problem/issue is to be ‘removed' or ‘minimised'. Different decisions are required depending on the desired outcome.

2. Developing Alternatives

It is unlikely that there is only one answer/solution to the problem/issue to be addressed. Defining alternatives helps to facilitate the decision making process. This can also help the decision maker to consider and reach a more innovative solution to the identified problem/issue. To do this effectively appropriate research is recommended in order to compile relevant facts to help with making an informed decision.

3. Evaluate the Alternatives

Determining the most realistic alternative(s) is one of the most crucial steps in the decision making process. This involves considering the advantages and disadvantages of each alternative. This helps to identify and eliminate any unviable alternatives so focus can be placed on those that help to achieve the defined objective.

4. Make the Decision

This is where the decision is actually made based on the activities of the previous three steps. This is where the ‘best' option is determined having taken all relevant factors into account. It could be that aspects of more than one alternative provide the ‘best' solution. Each circumstance is quite different and so it is not possible to predict a particular outcome or predetermine the decision that is going to be made.

5. Implement the Decision (Solution)

This is where you develop your plan of action. Just making a decision is not enough, something actually needs to happen. Explaining to those involved in implementing the solution about the implications of the decision will help with achieving a successful implementation.

6. Monitor your Solution

You could think it all ends with implementation however that is not the case. The impact and outcome of the decision needs to be regularly monitored. It is at this point where you assess if your decision is achieving its intended outcomes. It may be that a new decision needs to be made based on your findings.

Constraints on Decision Making

It is helpful to understand the types of decisions and the steps involved in making decisions however that is not all there is to it in order to be able to make effective and prudent decisions. There are a number of constraints that can impact the ability to make informed and timely decisions. These can be broken down into two categories internal and external.

i. Internal Constraints - these are factors that exist within the business that can make it harder to be able to make decisions which includes such things as available funding in order to undertake particular activities, business policy which may preclude certain actions from being taken, sufficient resources to undertake particular activities either mechanical, technical etc. and the skills, abilities, expertise and knowledge that exists within the organisation. The most critical is being able to garner the right support within the organisation to enable the delivery of the proposed solution.

ii. External Constraints - these are factors that influence the actions a business can take which exist outside the business such as regulation, the behaviour of competitors, insufficient technology capability (it just doesn't exist yet), and has been seen in very recent times the economic climate. Decisions businesses are able to make have changed dramatically since the Global Financial Crisis.

Whilst decision making is vitally important it is not easy. In the final article in this series we will explore how a business can enhance the quality of its decision making and also types of decision making styles.

Carol McGowan is a Business and Life Coach, Counsellor and Educator. Her passion is helping individuals and businesses to make successful transitions. Carol has over 35 years experience in business and has just released a book called Aspiring to Good Business. She may be contacted at This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Information about Carol can be found at www.besa.com.au