Seven Steps in the Decision Making

Seven Steps in the Decision Making

Following Seven Steps in the Decision Making must be used.

1. Define the situation:

The whole circumstances are in front of you and what you need is to revive it and go through the requirements of the scene. Understand what is the need of situation. A parameter of completeness and awareness should be there.

2. Describe and collect information:

Whatever data is required you have to compile that at one place. Information via research is collected and makes possibility for making a decision.

3. Develop alternatives:

You must have all possible references and the structure in your mind and accordingly develop alternatives. What are the outcomes and what are the possible methods to resolve it. What you can do along with your sub-ordinates.

4. Define an agreement among people who are involved:

You can’t have the decision at higher level verbally. Requirements are to properly write them along with the opinions of other people which are related. In black and white, agreement mentioning all terms and conditions should be written.

5. Deciding best alternative:

After having all possibilities now you have to decide for which alternative you should go. Taking all others with you as well. Comparing all merits and demerits of a decision.

6. Do what is indicated:

After selecting seek for a good output, go for a decision which is best and radical in your point of view. You don’t need to get panic. Focus on alternative by staying calm.

7. Determine whether you decision is right or not:

After you have made a decision, now nothing can be altered. You just have to keep pace and according to your thoughts just have to conclude results.

Sometimes decisions have to be made on the spot, with little information and managers with good skills take effective decisions.


The process used to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources.


A management function that includes anticipating trends and determining the best strategies and tactics to achieve organizational goals and objectives.


A management function that includes designing the structure of the organization and creating conditions and systems in which everyone and everything works together to achieve the organization’s goals and objectives.


Creating a vision for the organization and guiding, training, coaching, and motivating others to work effectively to achieve the organization’s goals and objectives.


Telling employees exactly what to do, once referred to as ‘leading’.


A management function that involves establishing clear standards to determine whether or not an organization is progressing toward its goals and objectives, rewarding people for doing a good job, and taking corrective.


An encompassing explanation of why the organization exists and where it’s trying to head.

Mission Statement:

An outline of the fundamental purposes of an organization. Addresses the organization’s self-concept, philosophy, long-term survival needs, customer needs, social responsibility, and nature of product/service.


The broad, long-term accomplishments an organization wishes to attain.


Specific, short-term statements detailing how to achieve the organization’s goals.

SWOT Analysis:

A planning tool used to analyze an organization’s strengths, weaknesses, opportunities, and threats.

Strategic Planning:

The process of determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals

Tactical planning:

The process of developing detailed, short-term statements about what is to do be done, who is to do it, and how it is to be done.

Operational Planning:

The process of setting work standards and schedules necessary to implement the company’s tactical objectives

Contingency Planning:

The process of preparing alternative courses of action that may be used if the primary plans don’t achieve the organization’s objectives

Decision Making:

Choosing among two or more alternatives (heart of all management functions)

Problem solving:

The process of solving the everyday problems that occur. Less formal than decision making and usually calls for quicker action.


Coming up with as many solutions to a problem as possible in a short period of time with no censoring of ideas.


Listing all the pluses for a solution in one column, all the minuses in another, and the implications in a third.

Organization Chart:

A visual device that shows relationships among people and divides the organization’s work; it shows who reports to whom.

Top Management:

Highest level of management, consisting of the president and other key company executives who develop strategic plans.

Middle Management:

Level of management that includes general, division, branch, and plant managers who are responsible for tactical planning and controlling.

Supervisory Management:

Managers who are directly responsible for supervising workers and evaluating their daily performance.

Technical Skills:

Skills that involve the ability to perform tasks in a specific discipline or department.

Human Relations Skills:

Skills that involve communication and motivation; they enable managers to work through and with people. Skills that involve the ability to picture the organization as a whole and its relationship among its various parts.


A management function that includes hiring, motivating, and retaining the best people available to accomplish the company’s objectives


The presentation of a company’s facts and figures in a way that is clear and apparent to all stakeholders

Autocratic Leadership:

Leadership style that involves making managerial decisions without consulting others.

Participate (democratic) Leadership:

Leadership style that consists of managers and employees working together to make decisions.

Free-rein leadership:

Leadership style that involves managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives.


Giving workers the education and tools they need to make decisions.

Knowledge Management:

Finding the right information, keeping the information in a readily accessible place, and making the information known to everyone in the firm.

Five steps of controlling:

  1. Establish clear standards
  2. Monitor and record performance
  3. Compare results against standards
  4. Communicate results
  5. If needed, take corrective action

External Customers:

Dealers, who buy products to sell to others, and ultimate customers (aka end users), who buy products for their own personal use.

Internal Customers:

Individuals and units within the firm that receive services.