The business decision making process typically contains several steps. While every decision may not require each step, some of the steps will no doubt apply. The first stage is to identify objectives, collect information, and analyze the 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 individuals who take the business decision making steps.
Identifying objectives comes when a company needs to alter operations. A decision may be necessary to improve a product, enter a new market, or hire new employees. Whatever the case, decisions makers need to identify the desired outcome. Increased profit, better product quality, or better market position may be objectives for business decision making.
Decision makers need to gather information relevant to the decision. Specific objectives lend individuals to certain information-gathering processes. Timely, relevant, and valid information is necessary to make a decision. Reviewing information at different stages can help individuals determine when they have adequate data for business decision making.
Analyzing gathered information is the final step before making a decision. Decision makers look at the different outcomes and determine which is best for the company. Further information gathering may be necessary to answer questions about possible decisions. Ideas are also necessary to determine the best course for implementing a new decision.
Choosing a course of action is the first step of the second business decision making stage. Decision makers select the best option for the identified objectives and planned outcome. While one individual may have the final say, a business committee can also have a part in the decision process.
Owners and managers communicate and implement the decision to all necessary parties. Once communicated, plans for implementation go into place. Business decision making goes from the decision makers to the staff required to carry out the tasks. Decisions makers often oversee the process to ensure all necessary steps are taken to achieve the maximum results from the decision.
An evaluation process is the final stage of the business decision making process. Decision makers use this step to review a fully implemented decision to determine how well the company benefited. Evaluation is also necessary to make minor adjustments to the decision process. In some cases, a company may need to halt the processes resulting from the decision because outcomes are not as desired or expected.