Decision Making Process in Management:
Every manager makes dozens of decisions every day, from small scheduling choices to major strategic bets. This article breaks down the decision making process in management into six clear steps, using a relatable business example so you can apply the framework confidently in exams and case studies.
Understanding this process also helps in real life — whether you’re choosing a career path or leading a group project at UCP.
What Is the Decision Making Process?
The decision making process is a structured approach managers use to identify problems, evaluate options, and choose the best course of action. It reduces guesswork and helps ensure decisions are based on evidence rather than gut feeling alone.
This topic is part of the FOM curriculum at UCP, often linked closely with problem-solving and strategic planning topics.
Step 1: Identify the Problem
Before any decision can be made, the actual problem must be clearly defined.
Example: A retail store notices declining weekend sales and needs to identify why.
Step 2: Gather Relevant Information
Managers collect data to understand the root cause of the problem.
Example: The store reviews sales records, customer feedback, and competitor pricing to understand the drop.
Step 3: Identify Alternative Solutions
Multiple possible solutions are brainstormed rather than jumping to the first idea.
Example: Options might include running a weekend discount, extending store hours, or launching a loyalty program.
Step 4: Evaluate the Alternatives
Each option is assessed based on cost, feasibility, and expected impact.
Example: The discount option is cheap and fast but reduces profit margins; the loyalty program takes longer to set up but builds long-term customer retention.
Step 5: Choose and Implement the Best Option
The manager selects the alternative that best balances risk, cost, and expected results, then puts it into action.
Example: The store decides to launch a short-term discount while building a loyalty program in parallel for the long term.
Step 6: Review the Decision
After implementation, results are monitored to see whether the decision achieved its goal, connecting back to the controlling function of management.
Example: After one month, the store reviews whether weekend sales improved and adjusts the strategy if needed.
A Visual Summary of the Process
- Identify the problem
- Gather information
- Identify alternatives
- Evaluate alternatives
- Choose and implement
- Review the outcome
Types of Decisions Managers Make
- Programmed decisions — routine, repetitive choices with established procedures (e.g., approving standard expense reports).
- Non-programmed decisions — unique, complex choices without a clear precedent (e.g., deciding whether to enter a new market).
Why This Topic Matters for Exams
Case-study questions frequently present a business problem and ask students to walk through the decision making process step by step. Practicing with a structured example, like the retail scenario above, makes it much easier to organize your answer clearly under exam pressure.
Related reading: Management Case Study Examples for Students, SWOT Analysis Example for Students, Four Functions of Management Explained
Frequently Asked Questions
What is the decision making process in management?
It’s a six-step framework — identifying the problem, gathering information, generating alternatives, evaluating them, implementing a choice, and reviewing the outcome — that managers use to make sound decisions.
What is the difference between programmed and non-programmed decisions?
Programmed decisions are routine and follow set procedures, while non-programmed decisions are unique, complex, and require careful analysis.
Why is gathering information an important step?
Without accurate information, managers risk solving the wrong problem or choosing an ineffective solution.
Can the decision making process be used outside of business?
Yes, this same structured approach applies to personal decisions, group projects, and everyday problem-solving.
What happens if a decision doesn’t work as expected?
The review step allows managers to catch poor outcomes early and adjust course, often looping back to earlier steps in the process.
Keep Learning
Working through a decision-making case study? Upload your FOM assignment notes to help other students, or explore more FOM articles on brainydock.site.