You can make decisions based on intuition or on the basis of facts. When making decisions based on facts, you can use a loose evaluation of their importance to reach a conclusion or you can base your decision on a structure that gives an objective result. In business, making decisions must be supported by evidence that your decision was a reasonable one. Bazerman & Moore have developed a decision-making structure that can be applied to any decision. Using their method in business is especially useful since it applies an accepted methodology to a given problem and gives consistent, documented results.
1. Write down the problem including why it is a problem and why it has to be solved. Include details of why you need a solution now, what will happen if you don't make a decision and what you see as the purpose of the decision. Add notes on how you became aware of the problem and why it is your problem.
2. Write down the goals you are pursuing in trying to solve the problem. Detail all your objectives related to the problem and the criteria you will use for evaluating overall success. Break down the overall success criteria into individual criteria for each goal or objective.
3. Assign a weight to each criterion, based on the importance of the associated goal. Rank the goals in order of importance and then assign the rank number to each criterion associated with a particular goal. If there are six goals, each criterion associated with the most important goal will be assigned a weight of 6 while each criterion linked to the least important goal will receive a weighting of 1.
4. List the alternative courses of action that are available to you to solve the problem. Look at the earlier notes on the history and details of the problem to help identify the alternatives. Make sure you include all possible alternatives, even ones you don't like or don't believe will work, since such influences will show up later in the structured decision making process.
5. Rate each alternative action with regard to each criterion, depending on how well it will fulfill the specified success criterion. If an action is guaranteed to fully achieve the result specified by the criterion, assign the criterion a 10. If the chances of success are only 50 percent, assign a 5.
6. Take the first alternative. For each criterion, multiply the weight assigned to the criterion for the importance of its goal by the rating based on the chance of success of this action. Add the results of all the criteria. Repeat the calculations for each of the alternatives. Choose the alternative scoring with the highest total as the one having the highest chance of success with regard to your most important goals.
- "Judgment In Managerial Decision Making," M.H. Bazerman & D. Moore; 2005
- University of Waterloo; How to Make Decisions: Coherence, Emotion, and Practical Inference; Paul Thagard; 2001
- Harvard Business School; Blind Spots: We're Not as Ethical as We Think; Sean Silverthorne; April 20, 2011
- Harvard University; Barriers to Acting in Time on Energy, and Strategies for Overcoming Them; Max H. Bazerman; September 2008
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