Posts Tagged ‘how to make decision’

How to Make a Decision

November 2, 2008

As a manager, we do make decisions everyday. There are many methods or ways how we make a decision. In 1970’s, when I was a young executive in a bank, I was given a training on ‘Systematic Managerial Analysis’. The course’s leader was from Manila, the Philippenes. This is a good and simple concept, and practical. I would like to share with you on how to make a decision based on this concept.

1. Systematic Decision Analysis

A decision is made based on the criteria you set. Under the “systematic managerial analysis”, a decision is made based on the ‘must criteria’ and ‘want criteria’.

2. Set Must Criteria

‘Must criteria’ are criterias that you must fill first and it cannot be compromised. Let say you want to buy a hand phone. You set a budget $500 as a must criteria. It means you will buy a hand phone which the cost is below $500.

3. Want Criteria3

‘Want criteria’ are additional conditions that will help you to make a better choice. Let say you have identify a list of hand phones which its cost are below $500. Say, the hand phones are Nokia, Samsung and Sony. In order to choose one of them, you set these criterias: built in camera, MP3 tools and data storage capacity.

 4. Evaluate the Criteria

You assign points from scale one to ten for each criteria. One is the lowest point (lowest priority) and 10 is the highest point (highest priority). Next, you evaluate and give your points to Nokia, Samsung and Sony. You sum up points by each camera. The camera which has the highest point should be the first choice. Let say Nokia is the highest point and you should buy Nokia brand.

5. Potetial Problem Anaysis

Even though you choose Nokia, you must study the potential problem analysis if you buy Nokia. It is a risk analysis. In other words, what can go wrong if you buy Nokia. Let say, if you find problems when buying Nokia (example: difficult to get back-up service), you may review your decision to buy Nokia. Instead, you buy the hand phone which have the second highest points, say Sony.

From my experience , this is a simple and practical concept on how we make a desion.