4 Simple steps to make better decisions in the Corporate world

23.04.2017

The need to regularly make decisions cannot be avoided in an official or commercial setting. The common strategy used to achieve goals is by creating teams dedicated to carrying out the activities targeted at specific goals, every team must have a leader and it is the responsibility of the leaders and the team members to take decisions at many points during their strategic execution of the goal-oriented activities. It is, however, common to observe a waste of time and resources as a result of poorly or slowly made decisions. It will be beneficial to the organizations if a better structure is incorporated into the overall decision-making actions of leaders and the team.

Understanding that it is important to create a standard procedure for making the best decisions is a good response from the top tier team in any setting. This standard process will be designed to cater for all the types of decisions that will need to be taken throughout the entire operational processes run by the organization which can be used again when proven to be effective. This has been broken down into the following.

1. Write out the potential decisions that will be made

Knowing the decisions that will be made in the future is the right step in preparing a system to quickly take the right action when the need arises. The scope of future decision-making situations should cover all investment plans, company marketing, and promotional plans, general and exclusive meetings, team focus meetings etc. many of these decisions are made while taking into consideration the unpredictability of the economic scene which is rapidly evolving. Organizations prepare themselves to handle any future problems and the changing demands from the customers. The level of communication between the teams that exists in the organization should also be considered while perfecting decision-making strategies.

A good example of the challenges that can arise from this exercise can be illustrated using a clothing line as a case study.  This exercise actually took longer than the estimated time slated for its execution. Within 12 months, the various teams presented their suggestions. The disputes were mainly about the time allocation for each decision and the challenges that would be faced by the employees while trying their best to meet up with the expectations of the list with respect to their job descriptions. It was all summed up as a discrepancy about the parties that has a right to make decisions within the organization.

The perfect resolution was arrived at when a list was created, this list clearly indicated the important decisions every faction felt was necessary and the incorporation of similar decisions to form a basic one that covered all the aspects of the constituents. For example, instead of making two decisions to cater for similar processes and bridging the proximity between manufacturing operations and the customers, a wider listing was made to create a better customer-focused model.

2. Understand the distinctive features.

After arriving at a specific number of decisions from the previous process, the exercise proceeded by grouping the decisions in line with four characteristics which are magnitude, organizational complexity, analytical complexity and the subject matter challenge. Each decision was scored based on a grading pattern which allotted points to each decision.

The breakdown is as follows- magnitude covers the calculation of the expected capital investments and expenses needed to facilitate operations and the duration it will take to make profits. The higher the magnitude of investment the longer period for the profits to materialize, this will mean a high score. 

Organizational complexity refers to the stakeholders involved and the extent of their influence in creating a progressive cooperation towards achieving goals. The points scored will rise as this is done. 

The analytical complexities consider the value of related information, the level of unpredictability and the alternatives available. The extent to which these values are understood will influence the increasing point scores.

The subject matter challenge measures how well the team is conversant with the content. A high point score will be attained for a low level of understanding of the subject matter.

3. Classification into three groups. 

The accepted decisions can be easily classified into three groups by using the scores attained.

Strategic group

Making long term decisions for the company will be determined by the few decisions that have the highest scores under the organizational and analytical complexity.  In the case of the clothing company, the decisions made include the use of automated machines and locating factories closer to the customers. Making these decisions requires studying the complex challenges of the organization like disputes that arise among the stakeholders who vie for their individual interests, understanding, and cultural values. The analytical complexities will pose challenges like the insufficiency of data which brings about an unpredictable system.

The more experienced teams are mostly engaged in making strategic decisions which are mostly an experienced and standard process of arriving at the right decisions. The progress will lead to a creation of various alternatives which can include combination of multiple decisions to form one, this will increase the extent of information received from the professionals both within and from external sources related to the organization to determine the values and potentials, critical assessments that consider the uncertainties and potential risks, this exercise is rounded off with a proactive decision. 

Significant

The decisions in this category make up a large portion of the investments; they are the decisions with average scores. These include operations like funding the purchase of materials, introducing standard goods and IT explorations that propagate manufacture or purchase decisions. The decisions are arrived at by focusing on the individual significant decisions rather than going through a comprehensive strategic decision-making process.

The best strategy for handling significant decisions that have the features of organizational complexities and analytical complexities is to get the customers involved by introducing attractive packages. In the case of the clothing company, selecting the right way of using ERP is a typical illustration of this decision.

Significant decision mostly has prominent features of analytical complexities and a reduced organizational complexity which needs innovative extraction of data and analysis focused on the appropriate values. The business executives will need to make decisions concerning better control measures for energy usage and provision of water to complement the organization's long-term goals.

Quick

These are the low point score decisions for a combination of organizational and analytical complexities. They are regarded as the processes that determine the method of approach while considering the clearly stated goals, standards, quality control methods etc. the aspect of quality control is considered under this decision to maintain the standard production processes. These are prompt decisions that can be made by employees in lower positions to enable the managers and directors focus on more crucial and strategic decision making responsibilities.

The senior teams basically get involved in all the categories on decisions. These refer to decisions that are not necessarily related to specific areas of the organization rather focused on the right methods of approach.

4. The importance of timing.

A good classification and identification of decisions will enable the clothing company’s top management team to easily know the right time to take the decision. Decision making could be professionally spread out to cover periods in the range of three months to nine months depending on the significance. A good example is the action of the team placing the need for managing the abilities of the facilitators and the changes that need to be implemented in this course over the use of ERP strategies.

It is important that an executive decision making team knows where its focus should be directed at. The lessons learned by the top teams at the clothing company are the need to develop and monitor an effective decision-making process that is fast and efficient.