The decision making

The decision making is the process through which it is identifies a decision necessity, settle down alternatives, are analyzed and one of them is chosen, the chosen one is implemented, and the results are evaluated.

As far as which to businesses one talks about, the decision making is a tool that allows to make the best decisions to the benefit of the company.

Generally, it is used to make strategic decisions, important decisions, or decisions that are little frequent (nonroutine); nevertheless, we can use the decision making to make any decision in the company.

We see next the steps or the stages that conform the process of the decision making:

1. Identification of the necessity to make a decision

The first passage in the decision making consists of identifying the necessity to make a decision, that is to say, consists of recognizing that it is necessary to make a decision.

Generally, the necessity to make a decision arises as a result of a problem or opportunity that appears.

In this stage we must define the problem or opportunity clearly, or whatever the necessity to make the decision.

Also, we must make sure that really it is necessary to make a decision, and of which we are to whom are incumbent on to us to take it, or if the possibility exists of being able to delegate it.

Example: we have identified the problem of which the supplier that we had is handicapped the quality of its products and, therefore, one becomes necessary to look for a new supplier, and to make the decision from what supplier to choose between all the possible alternatives.

2. Identification of decision criteria

Once we have identified the necessity to make a decision, we happened to identify the criteria that we are going to take into account at the time of evaluating the different propose alternatives of decision.

Example: once we have determined the necessity to count on a new supplier, we determined that the criteria that we are going to use to be able to choose to the new supplier will be the price, the quality of the product, the payment facilities, and the downtimes.

3. Allocation of weight to the criteria

Once we have identified the decision criteria that we are going to take into account to evaluate the decision alternatives, we happened to value or to weigh these criteria according to the importance that we are going to give to him at the time of making the decision.

Example: once we have determined the criteria that we are going to use to choose to the new supplier, we happened to weigh them, giving to the most important criterion the value of 10, for example, to the criterion price we give 7 him, to the one of quality 10, to the one of payment facilities 6, and to the one of downtimes 8.

4. Development of alternatives

In this stage we make a list with the different alternatives from decision that we have proposed.

In order to find decision alternatives we can propose them we ourself on the basis of our knowledge or experience, go to diverse sources of intelligence such as Internet, consult with the workers of the company, make a rain of ideas, etc.

While more important it is the decision to take, major time we must be taken to develop the alternatives, alternative majors we will look for, and major information we will successfully obtain of these.

Example: in order to determine to the suppliers that we are going to consider like alternatives, we looked for in the yellow pages, we looked for in Internet, we consulted with the workers of the company, etc. and then, once done one pre selection where we discard to which they do not fulfill the main requirements, we made a list with the alternatives that we have had left.

5. Analysis of alternatives

Once we counted on a list of decision alternatives, we happened to evaluate each of them, assigning qualifications to him with respect to each certain criterion.

Example: for the supplier To, in the price criterion we give a qualification him of 10 (because it has very good prices), in quality we give 5 him (then their products are not of very good quality, but they are not either of bad quality), in payment facilities we give 8 him (because they give good commercial credits us), and in downtimes 2 (because they delay much in giving the orders). The same with the other suppliers:

	price	quality	payment	it gives	TOTAL
Supplier A	10	5	8	2
Supplier B	7	7	5	6
Supplier C	8	5	5	5

Once we have assigned qualifications to each alternative with respect to each criterion, to find the total qualification of each alternative, we multiplied the qualification of each criterion by the weight of this one, and soon we added the results of each alternative.

For example, the total qualification of the supplier To serious: (10 xs 7) + (5 xs 10) + (8 xs 6) + (2 xs 8) = 184. The same with the other suppliers:

	price	quality	payment	it gives	TOTAL
Supplier A	10	5	8	2	184
Supplier B	7	7	5	6	197
Supplier C	8	5	5	5	176

6. Selection of alternatives

Once we have assigned the qualifications to each alternative with respect to each criterion, and found the total qualification of each, we happened to select that one that has the greater total qualification.

Example: once evaluated to the proposed suppliers, we happened to select supplier B since he is the one that obtained the greater qualification.

7. Implementation of the alternative

Once selected to an alternative, that is to say, seizure a decision, we happened to implement it, that is to say, to put it in practice, which includes to communicate it to all the affected people, and to look for the commitment of these to apply it.

Example: once chosen to the new supplier, we happened to communicate the decision to all the affected personnel, and soon we happened to make contact with enemy with the supplier and to sign the corresponding contract.

8. Evaluation of the effectiveness of the decision

And, finally, once put in practice the decision, we evaluated the results.

If the results are not the hoped ones, we can choose to take a little us more from time, or accept that definitively the taken decision was not the right one, and to again initiate the process of the decision making.

Example: once we are already working with the new supplier, we evaluated its performance constantly, for example, we made sure that it maintains the quality of his products, that in time give the orders, that fulfill the agreed to conditions, etc.

Like final note, we must indicate that the process of the taking decisions described previously is only one of different the methods that exist. We can take it like reference, or modify it according to the type of decision, or to the complexity or importance this one.

Always knowing in clearly that while more formal we are with the development of the process of the decision making, majors possibilities we will have to make the correct decision.