This Article will help you to understand and Practice - Decision Making, Decision making
Process, problem solving, Certainty and risk in your decision, satisfactory and perfect
decision Method. Also it will help you to frame your dreams into reality.

One can use following concepts to start his/her own venture and one can relate these concepts
to his/her real life experiences.

Rules for Success:

 If you are competent enough to think and to take risk and can’t gel-well with others,
then it’s better to stick on to your own decisions.
 If you need some feedback or ideas of the people from various backgrounds, never
forget to collaborate with others having expertise in their fields.
 If you need some motivation, must go through links attached.

Introduction:

Decision making can be regarded as the mental processes (cognitive process) resulting in the
selection of a course of action among several alternatives. Every decision making process
produces a final choice. The output can be an action or an opinion of choice.

Human performance in decision-making terms has been the subject of active research from
several perspectives.

 From a psychological perspective, it is necessary to examine individual decisions in

the context of a set of needs, preferences an individual has and values they seek.

 From a cognitive perspective, the decision making process must be regarded as a

continuous process integrated in the interaction with the environment.

 From a normative perspective, the analysis of individual decisions is concerned with

the logic of decision making and rationality and the invariant choice it leads to.

Yet, at another level, it might be regarded as a problem solving activity which is terminated
when a satisfactory solution is found. Therefore, decision making is a reasoning or emotional
process which can be rational or irrational, can be based on explicit assumptions or tacit
assumptions.

Logical decision making is an important part of all science-based professions, where

specialists apply their knowledge in a given area to making informed decisions. For example,
medical decision making often involves making a diagnosis and selecting an appropriate
treatment. Some research using naturalistic methods shows, however, that in situations with
higher time pressure, higher stakes, or increased ambiguities, experts use intuitive decision
making rather than structured approaches, following a recognition primed decision approach
to fit a set of indicators into the expert's experience and immediately arrive at a satisfactory
course of action without weighing alternatives. Recent robust decision efforts have formally
integrated uncertainty into the decision making process. However, Decision Analysis,
recognized and included uncertainties with a structured and rationally justifiable method of
decision making since its conception in 1964.

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 benefit or cost in nature. Then the
problem might be to rank these alternatives in terms of how attractive they are to the decision
maker(s) when all the criteria are considered simultaneously. Another goal might be to just
find the best alternative or to determine the relative total priority of each alternative (for
instance, if alternatives represent 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 it is very old and has attracted the interest of many researchers and
practitioners, 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. This leads to the
formulation of a decision making paradox.

Decision-making is one of the defining characteristics of leadership. It’s core to the job
description. Making decisions is what managers and leaders are paid to do. Yet, there isn’t a
day that goes by that you don’t read something in the news or the business press that makes
you wonder, “What were they thinking?” or “Who actually made that decision?” That’s
probably always been the case, but it seems exponentially more so in the opening decade of
the new millennium where everything seems marked with, “too big, too fast, too much, and
too soon.”

The reality seems to be that most organizations aren’t overrun by good decision makers, yet
alone great ones. When asked, people don’t easily point to what they regard as great
decisions. Stories of bad decisions and bad decision-making come much more readily to
mind.

Some of that is due to our tendency to notice and recall exceptions vs. all the times things go
as planned. For example, you’ve walked along side buildings more times than you could
possibly count. Yet you remember vividly the one time you got nailed by a pigeon overhead.

That’s how we are about bad decisions. We’re also that way because the really bad ones tend
to really hurt.

It’s not that people don’t have the capacity to make high-quality decisions in them. Decision-
making is a distinctly human activity. It’s what that great, big frontal lobe is for. We all make
decisions all the time.

But the fact that we’re hard-wired to make decisions doesn’t by itself make us good decision-
makers. That takes discipline: discipline to do at least four things all the time and well.

1. Realize when and why you need to make a decision.

 2. Declare the decision: decide what the decision is, how you’ll work it, and who should
be involved.
3. Work the decision: generate a complete set of alternatives, gather the information you
need to understand the possibilities and probabilities, and ultimately make a choice
that best fits your values.
4. Commit resources and act.

Decision principles:

1. Decisions come from the stories we tell ourselves and others. Listen to the stories
you tell yourselves. Listen to the stories other people tell themselves. A “justification”
or a “rationalization” is the story we tell ourselves so we can feel good about what we
did. Every decision has a story going in, every decision has a story coming out.
What’s yours?

2. Decisions aren’t found under a rock. Decision-making is what makes us human. It’s
why we have those big frontal lobes. Yes, not making a decision is making a decision.
You can choose to remain on autopilot like dogs and hamsters do, or to pause, pull
over, and actually make a decision.

3. Intentions are not decisions. So much of what we think of as decision-making is

really “intention” making. We really believe we’re going to do this or that. But unless
and until we spend our time or money, we’re just hopin’ and wishin’.

4. Divide and conquer. You can’t figure out the real problem, identify creative
alternatives, make trade-offs, do research, and grapple with all the stuff you don’t
know all at the same time. Those are separate thought processes. Respect that. Do
each one separately and then bring them together at the end.

5. Process matters. The most interesting decisions are the ones for which the results
don’t show up until much later. So the only way you can be at all sure that you’ve
“made a good decision” is to use a process. You don’t want to miss anything obvious.
You don’t want to do anything dumb. You don’t want to do more than you need to.
That’s why you need a process.

6. Make your process transparent. If the decision involves only you, do what you
want. But if you want others to come along for the ride, you need to show them not
just what you decided, but how it was decided.

7. No fictitious involvement. This is the opposite of the previous point. Don’t just
involve people to involve them. Find people who can help you, hurt you, and add
value to what you’re doing. Give them votes, voice, or visibility. Figuring out who
gets what role is where the action is.

8. Build commitment step by step. Avoid rework through regular check-ins with the
people who matter and particularly with the people how have the power to veto your
decision.

9. The first problem is seldom the real problem. Words matter. Pretend you’re
hearing and seeing this for the first time. There are at least ten other ways to describe
 whatever problem you’re working on. A “holiday,” “vacation,” and “time off” aren’t
the same things.

10. Beware of solutions masquerading as problems. When the problem and the
solution are the same, you don’t have a real decision. There’s a difference between
“Should we go to Spain this year?” and “Where should we go on vacation?”

11. Be hard on the problem, not the people. Consider this a plea for logic. Get cranky
some other time. When it comes to the physics of making a decision—figuring out the
real problem, sorting out choices, figuring out what’s important, and grappling with
uncertainty—personal pique and poor social graces have no place.

12. Talk to somebody new. Find someone you don’t agree with and ask them what he or
she would do. Get out of your circle. Unplug from your Faves. Get off Facebook.
Actually talk to someone new.

13. Raise conflict early. If you and I have different points of view on the problem we’re
trying to solve, now would be a good time to hash that out. Same with what we think
is important (what we call values). It doesn’t get easier later. It gets harder.

14. Focus your attention on what matters most. It’s easy to get stuck, lost, and waylaid
by what’s in front of us. But that piece of data or stone in our shoe may not be the
most important part about the decision. Use your energy for the important parts and
stop obsessing and arguing about what doesn’t really matter.

15. You need at least three alternatives to make a decision. Actually you need only
two. And they can’t be, “should I do this thing that seems really attractive, or what
I’m doing now which I hate.” Those really aren’t alternatives. Give yourself at least a
conservative, and aggressive, and a “hedged” choice.

16. Hit the guardrails. Not a good idea whilst driving, but a great thought while
exploring alternatives. Stop landing on what’s initially comfortable and go find the
edges. Find an alternative that sounds completely nuts. And then find something in
that idea that you can use, do, or try.

17. It’s not what you know. It’s what you don’t know you don’t know. Uncertainty is
what makes difficult decisions difficult. That’s why they’re called decisions instead of
foresight. The issue isn’t what you think you know. It’s not even what you know you
don’t know. It’s what you don’t know you don’t know that can hurt you.

18. There are no clairvoyants, but you can still ask. This is related to the “things you
don’t know” idea. Ask yourself, what is the one piece of information you would want
from a soothsayer if one popped up right now? What do you really, really wish you
knew? Figuring out that question is often the key to figuring out what you’re really
trying to decide.

19. It’s easier to be critical than creative. It’s also easier to be critical than “correct.”
Put away the red pencil. Most people give themselves too few alternatives because
they’re too busy finding what’s wrong with them, rather than how they might be right.
 20. Sometimes numbers can be used to tell a story. In business we’re particularly fond
of numbers. Of data. Of business cases. Of analysis. But what I see in a set of
numbers and what you see are likely to be completely different. That’s where the
story comes in. What do the numbers say? Why do they say it?

21. Take personal responsibility. Once you’ve made a decision, own your process and
own your results. If it doesn’t come out the way you hoped, learn from it and live with
it. Ducking responsibility does nobody any good, least of all you.

22. Experiments are failures we learn from. Fear of making a mistake is the death to
creative problem solving and fearless decision-making. That’s why movie studios
make sequels and why we keep doing different versions of the same thing. It’s not the
“mistake” that’s the problem. It’s learning nothing from it. Then it’s called an
experiment.

Not everyone does those four things consistently or consistently well. We’ve worked with a
lot of leaders and managers in some of the most widely regarded companies in the world and
our observation is that most people don’t. In fact, the distribution generally looks something
like this:

 There are some really wretched decision makers. For them, a good outcome is usually
a matter of luck.
 There are a lot of people who are reasonably competent decision makers. Their
decision processes aren’t great, but they’re not bad, and the outcomes they experience
track accordingly.
 There is a small group of people who could be described as “good decision makers”
These people are proactive and decision oriented. They’re able to focus attention on
what’s important and critical. They know how to break a decision down into logical
parts. They know how to work each of those parts in a high quality way. They know
how to deal with possibilities and probabilities. They’re able to see opportunities
where others see problems. They’re able to make quality choices in the face of
uncertainty. They’re able to turn thought into action.
 There is a sprinkling of people we’d describe as great decision makers. Like other
good decision makers, these people consistently make high quality decisions. Their
“greatness”, a word that is probably way overused, comes from their ability to create
the dynamics needed to ensure that the people in their organizations can do the same.

Good and great decision makers expect high quality outcomes and they’re generally not
disappointed. When they are, it’s usually because of some random thunderbolt or some
unforeseen dynamic, not because they didn’t do a good job of working the problem. There
are exceptions to this syllogism. But over the long-term, we think the good decision/good
outcome connection holds up, and the outliers have either not been in the job long enough for
their bad decisions to catch up, or have been extraordinarily lucky.

What is a Decision?
A decision is a choice between two or more alternatives. If you only have one alternative, you
do not have a decision.

Webster’s 9th Dictionary adds some richness to the idea of choice by introducing the idea of
uncertainty. It has this to say about the word “decide”, the root of “decision”

Decide: to arrive at a solution that ends uncertainty or dispute. From Latin decidere which
means to cut off.

A typical thesaurus might use words like accommodation, agreement, arrangement, choice,
compromise, declaration, determination, outcome, preference, resolution, result, and verdict
to try and give the concept of “decision” some dimension.

In our minds Webster’s definition and these potentially illuminating synonyms seem to miss
the driving idea behind a decision. A decision as an irrevocable allocation of resource.

This is where the concept of attention comes in. Attention implies the use of resource. It
means you actually allocate some time, money, effort—something—to turning your
intentions into action.

The concept of irrevocability means commitment: putting time, money, and/or resource on
the line to put your decision into action. Having decided, you’re not going to re-litigate your
decision every time someone has a new thought. Getting to that point with confidence is what
separates low quality decisions from high quality decisions, and mediocre decision makers
from good and great ones.

Making High Quality Decisions

A high quality decision comes with a warrant: a guarantee. Not a guarantee of a certain
outcome—remember this is the real world we’re talking about, and there are certain things
that just aren’t knowable until after they happen—but a warranty that the process you used to
arrive at a choice was a good one.

This level of confidence implies a process: a set of steps and rules that provide an assurance
of thoroughness and rigor. This means breaking decisions down into component parts and
doing one thing at a time.

Unless you’re unlike most people, it is your nature to do what you know how to do and to
avoid what you don’t. That’s why you want a rational decision process: To defeat the natural
behaviors and tendencies that can lead to low quality decisions.

Without a process, you are likely to drag decisions into your comfort zone, handling “this
one” in exactly the same way you handled “that one,” even though this one and that one may
have little in common. Without an organizational decision process, that same
“stimulus/response, stay in your comfort zone” dynamic can easily become the predominate
driver of your organization’s culture and effectiveness. As a leader, you’re either doomed to
inspecting every decision, or to hoping that people don’t decide to do something stupid while
you’re not watching.
With a process or framework, you have the mechanism you need to warrant the quality of
your own decisions. Perhaps more importantly, you also have a common language and set of
mental models that makes conversations about decisions more efficient and effective. This
common understanding of decision processes, criteria, and roles avoids many of the common
organizational decision traps, allowing people in your organizations to spend their
conversational energies on creating better alternatives and validating assumptions and
ultimately warranting their own decisions.

The framework we use for breaking down and working decisions of virtually any size and
complexity begins with two large ideas: declaring a decision and working a decision. Each of
those larger elements is then broken down into three sub components, or what we call
Decision Points, which are illustrated in the following diagram.

Declare
Decision Point 1: Frame the problem. What are you deciding and why? What shouldn’t you
be deciding and why? What’s not in the box is as important as what is. Without a good
definition of the problem or opportunity to be worked, there is no possibility that you'll
reliably reach a high quality decision.

Frames are mental structures we create to simplify and organize our lives. They help us
reduce complexity. That’s the good news and the root of another set of problems. Says J.
Edward Russo in his book, Winning Decisions, “Frames have enormous power. The way
people frame a problem greatly influences the solution they will ultimately choose. And the
frames that people or organizations routinely use for their problems control how they will
react to almost everything they encounter.”

Decision Point 2: The Right People. If you're a single actor, or hold all the prerogatives of a
dictator, this one is easy. It's just you. In other cases, you'll want to put some thought into
declaring who needs to be involved in what steps of this decision. Too few, or miss some, and
you risk the problems of rework, low adoption rate and poor buy in. Too many—too much
inclusion—and you invite the possibility of an unnecessarily painful or drawn out decision
process.
Decision Point 3: The Right Process. Will you flip a coin? Throw darts? Check with your
boss? Make decision tables? Use a decision tree or a bubble chart? Build a business case? It
would depend on the decision situation. Making a high quality decision doesn’t have to be
time consuming. In some cases, the best process might just be a coin toss or relying on some
rules of thumb. In other cases, the only way to work a decision is to really work it, and that
will take time.

The only rule is that the mechanics of how you’ll work the decision to conclusion need to be
appropriate to the size, significance, and complexity of the decision. How long is too long?
When the cost of working the decision any further outweighs the benefits of making a choice.

This element of declaration pulls the frame and people together into a coherent whole that
will govern how you will reason this decision through.

Work
Decision Point 4: A complete set of alternatives. “The more options you generate, the greater
your chance of finding an excellent one . . . You should only stop generating more options
when the cost and delay of further search are likely to exceed the benefit.” (Russo)

What is the right number of alternatives? That depends on how you’ve framed the question.
Two terms are helpful in this regard. “Collectively exhaustive” means that the alternatives
you’re considering fill the frame: a rational observer would conclude that you’ve thought of
everything that matters. “Mutually exclusive” means that the alternatives are unique and
different from each other: they’re not just restatements of the same choice.

Decision Point 5: Values against which to make tradeoffs. Values define your preferences
among alternatives. They are your criteria. Values can be expressed by “attributes.”Attributes
are characteristics of the outcomes that we find desirable or undesirable. They typically occur
over time and may have some degree of uncertainty associated with them.

For each decision, particularly those involving others, you need to make your definition of
value visible, clear, and distinct. In commerce, the acid test of a value is often that you can
measure it.

Decision Point 6: Information that describes the value of each alternative. Good decision-
making requires not only knowing the facts, but understanding the limits of your knowledge.
The most valuable insights are often found in exploring uncertainties and “disconfirming”
information. “The effective decision does not, as so many texts on decision-making proclaim,
flow from a consensus on the facts. The understanding that underlies the right decisions
grows out of the clash and conflict of divergent opinions and out of the serious consideration
of competing alternatives.” (Peter Drucker, The Effective Executive)

You can wear yourself out gathering and analyzing information. What you want is insight
that will help you judge the relative and comparative value of the alternatives you’re
considering.

Leaders should focus on creating the dynamics that support organizational decision quality—
on putting in place a decision framework and process that supports organizational decision
quality—rather than raking through the detailed minutia of specific decisions. A high quality
decision process highlights the frame, potential alternatives, and key assumptions the drive
value. This allows leaders to spend their time declaring the right decisions, providing a set of
common criteria, and testing the key assumptions of each decision.

Decsion Making Styles: There are many different ways for a manager to approach
making a decision. All are equally valid; some may work better in different environments
than others and some may only work for specific managers. In order to be an excellent
manager, you have to be aware of the different styles of decision making and be willing to
adapt your personal approach to suit the current situation. Two Yale professors, Victor
Vroom and Phillip Yetton, classified three distinct styles of decision making.

1. Directive or Autocratic: The directive or autocratic approach to making

decisions involves the manager reviewing all the facts alone. He will asses the best
method to approach a problem based upon his own thoughts and abilities. He will
then consider how each employee will help to deal with the problem and then draw up
a course of action. This is then implemented without any feedback from, or
consultation with, other employees. In this respect, it is very autocratic. This approach
has the benefit of speed, as there is no discussion involved and decisions can be made
quickly. The downside to this, however, is that if the manager does not think of
something or gets it wrong, there is nobody there to point out the mistake.
2. Informing and Involving: Based upon cooperation and consulting, the
informing or involving management style is the opposite of the directive approach.
With this approach, the manager chooses to involve other members of staff in
discussion. He will listen to their thoughts, feelings and ideas on a matter before
making a decision. Ultimately, the decision is still up to the manager; however, he has
the benefit of seeing the problem from several different angles. Having feedback from
other staff members also allows the manager to predict how other staff may react to a
proposed change or course of action before implementing it. The disadvantage of this
style of decision making is that it takes time and it prevents decisions from being
made quickly.
3. Participation and Engagement: This style is completely different from
the other two management styles. The participation and engagement style removes the
debate and theory from decision making, and puts the manager on the ground. The
principle behind this is as follows: by actually being involved in the problem or aspect
of work that needs to be changed, the manager is better able to know which course of
action to take to resolve it. The disadvantage of this style of management is that it is
easy for a manager to become too involved when working with the problem directly
and he may not see this as objectively as he should.

Read more: Management Decision Making Styles | eHow.com

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Decision Making Process:

STEP 2
Determine the requirements that the solution to the problem must meet