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What is organisational decision making and 5 more tips on how to do it in practice

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decision making in organizations

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One of the most important roles of a team leader is to make decisions.

And with this task comes great responsibility.

It stands to reason, the consequences of ineffective decision making can be fatal for an organization.

Paralyzed projects, wasted resources, reworking, teams without direction… The list goes on.

However, when decisions are taken thoughtfully and backed by solid planning, they can lead a company to achieve ever greater results.

But what is decision making in organizations? What is required to decide intelligently the many issues within a company?

All this you can find out now!

Also read: 3 tools for root cause analysis as a guide to decision making

What is decision making in organisations?

Decision-making can be defined as the process of defining what is important, among a group of people or in an organisation.

It involves the selection of a course of action between two or more possible alternatives in order to reach a solution to a given problem.

The decision-making process in organisations is carried out by a team of professionals whose purpose is the improving of the company’s proceedures. Therefore, it is a continuous and dynamic activity that permeates all other activities relating to the organization.

Since it is a continuous activity, the decision-making process plays a vital role in the operation of a business. After all, it represents the combination of scientific knowledge, technical skills and the professional experience of the whole team.

In a managerial environment, decisions cannot be taken haphazardly. So, there are some steps that require the following:

Define the problem;

Collect data and information;

Analyze the alternatives;

Choose the best option;

Plan and execute;

Monitor the results.

Decisions are made to best sustain business activities. And therefore, guarantee smooth organizational operations at all levels of management, in order to achieve pre-established goals and objectives.

5 tips on how to make effective decisions

1 – Establish long-term goals and use them to measure your decisions

Too often, organizations find themselves running endlessly in pursuit of short-term goals.

For example, money that has been allocated to a year-long project is often redirected to meet short-term objectives. Thereby creating a lot of confusion and resulting in an overall lack of progress.

To avoid this problem, figure out your priority and long-term goals from the start. Then, as your team makes decisions, ask yourself if what you are doing is aligned with those goals. This should be a constant process, returning repeatedly to check your organizational activities against your set goals.

By successfully applying this method, you will be more engaged and confident in short-term projects that support your long-term goals. Over time, this will advance your organization.

2 – Align your goals with your core values

The previous item raises a new question: how do you decide your long-term goals?

Ideally, they should flow from your organization’s mission and core values. Your company’s goals may evolve over time, but your core values should be less flexible.

Your organizational values give a coherent sense of identity and provide the continuity of your company.

They should be clearly understood and agreed upon by your decision-makers. When assessing your aims and objectives, check that they are aligned with your core values.

Read more: Learn how to define company values and employ them appropriately

3 – Evaluate and reassess your spending

One way to evaluate your priorities and how they are currently being accomplished is by taking a look at your spending.

Often, you may believe you are prioritizing a specific goal or objective. However, your budget may tell a different story.

Make sure your organizational expenditure reflects your chosen priorities. If not, you may need to take a second look.

And, as with any check-up, it is essential to make this a regular assessment to continually check you are on the right track.

Want tips on how to make a cost reduction plan in your company? Then check out this video from our YouTube channel:

4 – Understand the impacts of your decisions

Some decisions can be discrete and routine, with set boundaries, only occasionally impacting on a specific issue with any significance.

However more often, decision-making in organizations can have wide-ranging consequences, especially if it addresses internal policies or processes.

You need to consider multiple possibilities and make sure to check second-and third-order effects. These consequences can provide a crucial context for the proposed decision to be made.

5 – Remember your team

Organizations rely on the quality of their staff to succeed.

If your decisions hinder the productivity of your team at work, it will jeopardize your long-term success – even if your decisions seem to promote your short-term goal.

Evaluate the effect your decisions will have on your team member’s ability to perform their tasks and factor that component into your decisions.

See our blog: Personnel department indicators: check out 7 examples and keep your talent motivated

Conclusion: decision making in organizations outlines today what the future will be like

The most effective decisions should generate better work that leads towards your long-term goals. And these should be guided by the core values of the business.

You must constantly re-evaluate your spending and assess the likely consequences of your actions.

If you follow these tips on decision-making in organizations, you will be able to decide more intelligently and efficiently on a range of issues.

Making decisions is important, but if your ideas don’t turn into concrete actions, they come to nothing. Therefore, it is very important to engage your team so that they perform their tasks in an optimum way.

Have you ever thought of having the following facilities in your business:

Create and monitor KPIs for processes, projects and people;

Share information with agility and transparency;

Use meritocracy and focused management to motivate and manage teams;

Employ the main strategic planning methodologies such as BSC, OKR and SWOT;

Integrate people, operations and strategy;

Facilitate the exchange of information and communication between departments.

STRATWs One is the perfect software for this, adopted by over a thousand companies around the world!

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