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Decision making is the process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.
Also is a choice made from two or more alternatives, Decision making is a manager’s job.
There are factors affecting decision making like perception of individual or personal experience that must not exceed 30% and related evidences 70% , that help us in decision making .
Here is the steps of decision making process that help in take a good decision and reduce the problems of decision making;
1- Identify the problem: the most important step as all coming steps follow it so we must clarify and determine the problem exactly.
2-Establish Decision criteria: define all needed related to decision it self.
3-Weight criteria: in this process we will weight the criteria according to the most needed items or decision.
4-Generate alternative: according to the need we will prepare some alternative to choose the most suitable one.
5-Evaluate the alternative: in this case we will evaluate the alternative according to the weight of needed criteria.
6- Choose the best alternative: regarding to criteria and its weight we will choose the most suitable choice.
7-Implement the decision: stage of making and implement the decision.
8-Evalute the decision: one of the most important stage as we must be sure that we cover all needed criteria and achieve the needed objective.
The bias factors of decision:
1-Availability:
o On this case we only depend on the knowledge that is readily available rather than examine other alternatives or procedures.
o The most recent and memorable information is given preference.
2-Overconfiendence:
o While I see no problem as I am the decision maker
o When we are given factual questions and asked to judge the probability that our answers are correct, we tend to be far too optimistic.
3-Anchoring Effect:
o Taking decision depending on incomplete information.
o This also happens when we are blinded by first impressions or influenced by first impressions, ideas, prices, or estimates relative to info received later.
4-Selective perception:
o See things from our own personal perspective.
o Organize and interpret events/information based on this perception.
o Influences what we pay attention to and the problems we identify, and the alternatives we develop or consider.
5-Framing:
o Tendency to be influenced by the way a problem is formulated even though it should not affect the solution.
6-Sunk Costs:
o By the end we sure that it is not a right decision but we still try to prove it is right.
o Tendency to “honor” already spent resources that are not affected by present or future decisions.
o Economists would label this behavior "irrational”
– it is inefficient because it misallocates resources by depending on information that is irrelevant to the decision being made.
o Throwing good money after bad.
7-Self Serving:
o Take personal credit for success while blaming outside sources for our failures.
o Selecting information or making decisions that further our own self-interests instead of the organization or team.
8- Representation:
9-Hind Sight:
o Mainly prove that he is not responsible for that result.
10-Immediate Gratification:
o Mainly serve his own interest not the company goal.
how we can reduce biases?
Reducing Biases
Use a PROCESS
Start with a clean slate
Challenge the status quo
Seek multiple perspectives
Search for more information & data
Play Devil’s Advocate
Reflect on your own views & values
Develop systemic review processes that leave you a committed “out” possibility when trying to “cut the losses”
Avoid the potential for escalation or further emotional investment in faulty decisions engendered by premature “public” commitment.
Search relentlessly for potentially relevant or new disconfirming evidence.
Accept the “Chief Contrarian” as part of the team.
Seek diverse outside opinion to counter our overconfidence.
Reward the process and refrain from penalizing errors when the intentions and efforts are sound.
Keep in mind that you can’t escape these biases but if you are aware of them and challenge them, you will be become a stronger critical thinker and better decision maker overall.
o by USC Marshall (school of business) they provide USC-CT model in thinking and problem solving and decision making process to help in taking a good decision and that also will help in reducing biases impact ;
U
Uncover the various potential problems, challenges & opportunities vis-à-vis organizational goals.
S
Select the most critical problem(s), challenge(s) and/or opportunity(ies). Prioritize.
C
Create a multitude of potential solutions.
C
Choose the solution(s) that has the potential to be the most effective.
T
Translate your solution(s) into an effective implementation plan.
With each step, check and challenge your thinking. What biases might be getting in the way? Am I limiting the possibilities?
#Diary of shab2bes# AhmedAboelftooh#
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