Decision making starts at the top management level of the organization after finalizing the business strategies. The Decision making builds the foundation for a proper operations management plan.
The activities for Initial Decision Making/Business strategy includes
- Understanding the overall market, customer, customer requirements and opportunities available.
- Checking the credibility to reach to all the prospective customers using the distribution channel. Company’s credibility is the most deciding factor behind any business decision making
- Developing the business offerings – decide the product to be developed or services to be offered
- Define the business portfolio and business assets
- Preparing for execution – define goals and objectives, prioritize the activities/processes, understand the potential for expansion and growth.
Decision making during regular operations would include:
- Finding/defining a problem in everyday business operations
- Identifying problem as a gap between expected result and achieved result which causes defects
- Define an operational goal like increasing profit margin, Lower cost and waste and higher resource utilization
- Identify all the business constraints like legal requirements, business environment, ethics, resource availability, management preferences
- Determine potential outcome or payoffs – all the available paths/options should be analyzed for the potential cost as well as the probable profit and decision should be made accordingly.
- Apply decision rule – after going through different courses of action and their outcomes, select course of action that meets company’s objectives