BINUS Business School

Tips for Wise Decision Making in Organizations

Running an organization means you need to make decisions occasionally, and this is not something to be taken lightly. This is because every decision has a significant impact on the performance, morale, and future of the organization. So, what does good and wise decision-making look like? Here are seven ideal steps that can help you in those crucial moments when you need to make a decision.


  1. Analyze the Problem First

The first step you must take to make a decision is to analyze the problem in depth. This involves a comprehensive understanding of the situation at hand, identification of the cause of the problem, and an understanding of its impact. This analysis should be done objectively so that the organization can avoid personal biases and assumptions. You also need to differentiate between primary and secondary problems, so that focus can be given to the most critical aspects.


  1. Collect Relevant Data

After understanding the problem, the second step is to collect relevant data. This process includes collecting quantitative data (such as statistics and figures) as well as qualitative data (such as opinions and feedback from employees or stakeholders). This data collection must be done in a systematic and organized way, so that the hope is that all the information obtained is very accurate and current. Complete and accurate data will be the basis for making the right decisions.


  1. Find as Many Alternative Solutions as Possible

The third step of wise decision-making is to identify alternative solutions. In this phase, creativity and open-mindedness are needed. It’s best not to limit yourself to just one solution but to also consider new and innovative ideas. Collecting various options gives you more opportunities to compare and evaluate each option. For this reason, try to involve various departments or teams because often different perspectives can provide wise solutions for the betterment of the organization.


  1. Consider the Pros and Cons of Each Option

Every alternative that comes up when looking for a solution should be evaluated based on its advantages and disadvantages. Consider aspects such as cost, time, resources required, and potential expected results. This evaluation of advantages and disadvantages also includes an analysis of the long-term risks and impacts. It is important, then, to consider how each option will affect various aspects of the organization, including the employees, customers, and reputation in the eyes of society.


  1. Choose the Best Alternative

After weighing all the options, choose the most effective and efficient alternative. This decision should be based on data and an analysis, not just a gut instinct or personal preference. The decision should support the organization’s long-term goals and strategies. In choosing a solution, also consider how this decision will be received by the team and other stakeholders, including the ease of implementation.


  1. Communicate Options to Relevant Parties

Communication is key in implementing the decisions taken. You will definitely need to communicate the final decision to all parties involved or affected. This communication process must be clear and thorough, so as to explain the reasons why the decision is the one that is implemented.

If the decision is not in line with one department’s proposal, the news to that division should be better communicated. Communication should increase everyone’s understanding and support for the decision and minimize resistance (confusion) and even conflict.


  1. Monitor the Results of the Decision Made

The final step is to monitor and evaluate the results of the decisions that have been made. This involves observing the implementation and the resulting impact, both short and long term. This monitoring is important to ensure that the decisions taken produce the desired effects. On the other hand, it enables you to identify whether any adjustments need to be made. This process also provides valuable lessons for future decision-making.

Decision-making is a complex and important process in every organization. By implementing the seven steps above, organizations can improve the quality of their decisions. That’s why the process should be structured and data-driven, so that you can build a strong foundation for future decision-making.