Decisions made in any organizations determine the effectiveness and the productivity of that organization. Organization’s strategies are made through decision making process. This paper is aimed at reviewing the steps that a leader should follow in making effective decision making. Additionally, it gives the benefits of effective decision making. Every organization has to have a process of decision making for it to be successful.
Decision making can be categorized into three different levels, the first level involves the decisions made by individuals on their lives. At this level, people look for solutions concerning the issues affecting their own lives, and not the lives of a group of people. Therefore, those decisions need not to be very rational. The second level is where a person makes decisions on behalf of a small group of people. According to Ernst (43), the group can choose a person who will be representing them in meetings and this leader is always responsible in making the decisions according to the agreement they have with their group. The group must have strategies that are followed by their leaders in making decisions which are supposed to promote the performance of the group.
Nezer and McNamara (10) assert that the decisions made at this level are more rational than those made in level one. The third and the last level of decision making comprises the decision made by the managers on behalf of the organization. These decisions are more rational and structured since they affect the productivity of the employees and the performance of the whole firm in the market. This study will focus on the effective decision making in general.
Nezer and McNamara (12) point out that decision making is one of the works that any individual leading a group of people does in their day to day life. Some of these decisions use less effort and others requires serious considerations for them to be made. The decisions made by the leader are effective if they help the group or the organization being lead to achieve its goals and objectives. Some leaders are able to make complex decisions easily and other must first look for guidance in every decision they make. Seeking guidance is also recommended but it consumes a lot of time and resources and is not efficient when the leader needs to make quick decisions. A leader must be decision maker regardless of the type of group s/he is leading. Self confidence can be improved if a person has the ability to make effective decisions (Ernst 45).
An effective decision making enables a leader to be good time manager. Leading a group comes with many challenges and a leader needs effective decision making skills to manage the stress and overcome the challenges. A leader must be able to manage his team well for it to meet the goals and objectives. Decision making skills can be improved to give better results. Leaders regardless of whether they are managers in big organizations or small group, leaders needs to involve their subordinates or the group members in the process of decision making. They should embrace the fact that people they are leading have skills and knowledge in different fields and professions and their contributions and views can improve the performance of the organization or the group (Ernst 48).
According to studies, communication is an organization is a factor that promotes the understanding among the employees or the group members. Leaders must be in a position to determine the steps in which they are supposed to involve the members in making the decisions and when they should just make the decisions on their own (Lai and Waiman 138).
Steps to Effective Decision Making
The inborn personality of a person can determine how effective the decisions s/he makes will be. A tolerant and a risk taker person is believed to make effective decisions for a group. Therefore, this is one of the reasons why leaders should be risk takers, tolerant and time managers. Procrastination character has an advantage and a disadvantage in the decision making. The advantage is evidenced in the case that the decisions which need to be made requires more time but the character can cause the failure of the whole group if quick decisions are needed. The leader may fail in decision making if s/he decides to carry out an activity without thinking about the consequences. Leaders should trust themselves while making critical decisions which affects the group or an organization they are leading. They should make careful considerations to determine when the decisions should be made (Nezer and McNamara 13).
Identifying the Right Issue
A leader should take time to focus on the issues which needs special attentions before they make their final decision. They should focus on their values, the values of an organization and the values and characters of the people they are representing to help them make the right decisions which will favor every person in the organization.
Identifying Organization Goals
Goals and objectives determine the direction in which the organization should move to meet them. Lai and Waiman (135) argue that without them, an organization will not have the agenda and will not succeed in the market. They enable leaders to make effective decisions which help the employees to strive in completion of their tasks to meet them. The ability of the leaders to identify the priorities is what makes them think through the options they have in order to achieve better outcomes which favors the organization.
Gather the Facts
Facts from reliable sources should be gathered to support the decisions that any leader is about to make. When a leader uses figure and facts before making any decision, it will help them base their arguments on a strong foundation and probably they will make effective decisions.
Consider a Wide Range of Options
The decision maker should be able to evaluate the consequences before selecting one of the many options they have. They can consult from reliable sources for motivation and assurance before making any decision. They should put in mind that they are the main determiners of the success or failure of the group or the organization.
Effective Decision Making Model
The model and the steps of effective decision making are interconnected and they all lead to the production of the decisions made. The following figure presents the model which shows that for a decision to be effective, it should pass a short process below.
The Challenges in Making Effective Decisions
Perception is the way a person gets and interprets information. This can affect a person’s ability to make the right individual or group decisions. A leader can make a decision on behalf of the firm according to his/her own believe or feeling about the issue but this can either affect the organization of the group positively or negatively. The subordinates may feel that the decisions that their leader have taken will not benefit the whole organization. To avoid these feelings a leader should have time to listen to the opinions of their subordinates so as to determine what works best for them. Leaders should also make decisions based on the goals and the objectives of the firm to avoid biases among the employees as pointed out by Nezer and McNamara (6).
Ernst (46) postulates that confidence and trust are among the characters that a person or a leader should have to help them make effective decision. However, if they are misused, they can lead to failure in the process of decision making. Overconfidence in a leader can make them think that their decisions are always the best which is not always the case. Consultation should not be seen as a way of undermining the leaders’ ability but it should be viewed as a method of strengthening the working relationship in the organization. Therefore, leaders should be in a position to consult from their partners and also the subordinate for better performance the firm.
Diversity of a Group
People from different regions behaves differently. Making decisions that will be supported by the whole group is always a challenge to the person making decisions. Decision making can cause conflicts in the workplace or among the group since some people will think that the decisions are not favoring them. The leaders should be able to understand the behaviors of the subordinates and they should always be ready to explain to the understanding of the subordinates about the decisions they have made and the benefits they have on the organization (Ernst 60).
According to Lai and Waiman (140), the strengths and weaknesses of a group or the personnel can affect the effectiveness of the decisions made. This is a challenge to the decision maker especially when there is no enough time for the leader to consult the group members or the subordinates. It also wastes time when every decision made requires explanation. For decisions to be effective, the leaders should not always involve the members. This is because some of the members have always supported the decisions which will benefit them without considering the welfare of the others. This calls for the leader to use force in his style of leadership to ensure that the members respects their decisions which they make without consulting them.
Group Decision Making
Lai and Waiman (40) argue that when decision making involves more than two people, it becomes difficult to make effective and quick decisions since the opinion of every person must be put into consideration. In some organizations, there must be a group of decision makers that must be involved to make serious strategic decisions and therefore this problem is hard to solve. For such a case, the decision making group should involve people from different professions and have different skills to enable them share ideas. This will lead to effective making of decisions.
Benefits of Effective Decision Making
Decision making always helps a group or an organization achieve objectives and the goals which in return leds to the improvement of the performance of the organization. Therefore, when the CEO and the other managers in the organizations follows the steps of effective decision making, they assist in raising the position of the firm in the market. This makes the company win customers’ royalty and remains competitive in the market.
According to Lai and Waiman (139), effective decision making helps an organization to take the advantage of the markets and utilize the best practices which helps them to become the market leaders. It also enables them to effectively plan for the resources available to avoid borrowing from other organizations. This helps them to avoid the risks that are associated with borrowing. Some leaders delegate the role of decision making to other people who might be having different skills and knowledge. This enables them to make more reliable decisions which enable an organization to deal with any problem that may arise at any time.
Organizations or groups need leaders who have decision making skills to help them achieve their goals. Operations in organizations need good leaders and decisions to keep them running effectively. Leaders should be able to apply the effective decision making model to help an organization improve on the performance. Self and organization evaluation enables the leaders to improve on his decision making skills. The involvement of members in the decision making and acknowledging their opinion motivates them and this method helps them to embrace the types of the decisions made concerning them or the organization. Evaluation of consequences promotes the ability of any person to make decisions effectively. This is because any person will be able to choose from a variety of options which is for the support of corporate strategy.
Ernst, Frankel. Quality decision management, the heart of effective futures-oriented management: A primer for effective decision-based management. New York: Springer, 2008. Print.
Lai, Bo and Cheung Waiman. “Group decision making in a multiple criteria environment: A case using the AHP in software selection”. European Journal of Operational Research 1 (2002): 134-144.
Nezer, Harriet and Maureen McNamara. 7-steps for making more effective decisions, the linkage leader. Burlington: Linkage, 2008. Print.