Learning Resource

Problem Analysis: Defining Decision Making

Defining Decision Making

Decision making is the mental process of selecting a course of action from a set of alternatives.

LEARNING OBJECTIVE

  • Identify the steps and analyze alternatives in a decision-making process

Key Points

  • Decision making is a process of choosing between alternatives.
  • Problem solving and decision making are distinct but related activities.
  • Time pressure and personal emotions can affect the quality of decision-making outcomes.

Key Terms

  • Problem: A difficulty that has to be resolved or dealt with.

Decision making is the mental process of choosing from a set of alternatives. Every decision-making process produces an outcome that might be an action, a recommendation, or an opinion. Since doing nothing or remaining neutral is usually among the set of options one chooses from, selecting that course is also making a decision.

Difference Between Problem Analysis and Decision Making

While they are related, problem analysis and decision making are distinct activities. Decisions are commonly focused on a problem or challenge. Decision makers must gather and consider data before making a choice. Problem analysis involves framing the issue by defining its boundaries, establishing criteria with which to select from alternatives, and developing conclusions based on available information. Analyzing a problem may not result in a decision, although the results are an important ingredient in all decision making.

Steps in Decision Making

Decision making comprises a series of sequential activities that together structure the process and facilitate its conclusion. These steps are:

  • Establishing objectives
  • Classifying and prioritizing objectives
  • Developing selection criteria
  • Identifying alternatives
  • Evaluating alternatives against the selection criteria
  • Choosing the alternative that best satisfies the selection criteria
  • Implementing the decision

Analysis of Alternatives

Pet food in aisle of a grocery store.
Many Choices

Too many choices increase the difficulty of making a decision.

A major part of decision making involves the analysis of a defined set of alternatives against selection criteria. These criteria usually include costs and benefits, advantages and disadvantages, and alignment with preferences. For example, when choosing a place to establish a new business, the criteria might include rental costs, availability of skilled labor, access to transportation and means of distribution, and proximity to customers. Based on the relative importance of these factors, a business owner makes a decision that best meets the criteria.
The decision maker may face a problem when trying to evaluate alternatives in terms of their strengths and weaknesses. This can be especially challenging when there are many factors to consider. Time limits and personal emotions also play a role in the process of choosing between alternatives. Greater deliberation and information gathering often takes additional time, and decision makers often must choose before they feel fully prepared. In addition, the more that is at stake the more emotions are likely to come into play, and this can distort one's judgment.

Licenses and Attributions

Decision Making in Management from Boundless Management by Lumen Learning, originally published by Boundless.com, is available under a Creative Commons Attribution-ShareAlike 4.0 International license. UMGC has modified this work and it is available under the original license.