ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

7 Steps To Make An Effective Decision For Business Success

Updated on April 17, 2015

Entrepreneurship Success

A major part of decision making involves the analysis of a finite set of alternatives described in terms of some evaluative criteria. These criteria may be beneficial or costly in nature. The problem that may be involved is to rank the alternative in terms of how attractive they are to the decision maker(s) when all the criteria are carefully looked upon simultaneously.

Another goal may just be to find the best alternative or to determine the relative total priority of each alternative (for instance, if alternatives represents projects competing for funds) when all the criteria are considered simultaneously. Solving such problems is the focus of Multi-Criteria Decision Analysis (MCDA) also known as Multi-Criteria Decision Making (MCDM). This area of decision making although is an old one and has attracted the interest of researchers and practitioners and yet, it is still highly debated as there are many MCDA/MCDM methods which may yield very different results when they are applied on exactly the same data.

Problem Analysis and Decision Making

It is very important to differentiate between problem analysis and decision making. They both have different concepts. The first one to be done should be the problem analysis before decision making.

  • Problem analysis: it is important to analyze performance and know what the results should be. The problems discovered are merely deviations from the standard of performance. The problem has to be identified and described, as they are caused by some change from distinctive features. The cause of the problem is the one that has all the needed facts.
  • Decision making: in this case, your objectives must first be established, classified and placed in order of importance. Alternative actions must be developed and evaluated against all objectives. The alternative that is able to achieve all objective s is the tentative decision, which is evaluated for more possible consequences. Additional actions need to be taken in order to prevent any adverse consequences from becoming problems and starting both systems (problem analysis and decision making) all over again.

The act of making an effective decision involves a process. Most organizations operate by people making decisions. A business manager makes plans, organizes, staffs, leads, and controls her team by executing decisions. The effectiveness and quality of those decisions determines how successful a business manager will be. Managers are always called to make decisions in order to solve problems. Decision making and problem solving are on-going processes of evaluating situations or problems, considering alternatives, making good choices, and following them up with necessary actions.

The entire decision making process is dependent upon the right information being available to the right people at the right times.

The decision making process involves the following steps:

1. Define the problem: an accurate definition of the problem affects all other steps that follow, so you need to be careful in understanding what the problem is.

2. Identify limiting factors: business owners want to make the best decisions. In order to achieve this, the needed resources has to be available; information, time, personnel, equipment, and supplies.

3. Develop potential alternatives: a business manager should think and investigate alternative solutions to a single problem before making a decision. One very important method of developing an alternative is through brainstorming, where a group works together to generate ideas and alternative solutions. The process of brainstorming within a group of business individuals involves concentrating on the problem at hand and entertaining every idea.

4. Analyze the alternatives: the business manager needs to evaluate each alternative in terms of its feasibility, effectiveness and consequences of the decision.

5. Select the best alternative: after analyzing all the alternatives, the business manager must decide on the best one. The best alternative is the one that produces the most advantages and few disadvantages. The selection process may not be straight forward sometimes.

6. Implement the decision: managers are paid to make decisions, but they are also paid to get positive results from the decisions made. Everyone needs to ensure to participate in a role to get a successful outcome. To make certain that the employees understand their role, managers must thoughtfully devise programs, procedures, rules, or policies to help them in the problem-solving process.

7. Establish a control and evaluation system: an evaluation system should provide feedback on how well a decision is being implemented, what the results are and necessary adjustments to be made to get the results that were intended when the solution was chosen. If the manager’s plan hasn’t resolved the problem, he needs to figure out what went wrong.

From a normative perspective, the analysis of individual decision is concerned with the logic of decision making and rationality and the invariant choice it leads to. Therefore, decision making is a reasoning or emotional process which can be rational or irrational and can be based on explicit assumptions or tacit assumptions.

Your Idea Is Important


    0 of 8192 characters used
    Post Comment

    • rapture15 profile imageAUTHOR


      3 years ago from AFRICA

      That is very true aesta1, thanks for commenting dear!

    • aesta1 profile image

      Mary Norton 

      3 years ago from Ontario, Canada

      Identifying limiting factors is so important, a step we often set aside.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)