Business decision making is essentially a process of selecting the best
out of alternative opportunities open to the firm. The steps below put managers
analytical ability to test and determine the appropriateness and validity of
decisions in the modern business world.
Following are the various steps in
decision making process:
1.
Establish objectives
2.
Specify the decision problem
3.
Identify the alternatives
4.
Evaluate alternatives
5.
Select the best alternatives
6.
Implement the decision
7.
Monitor the performance
Modern business conditions are changing so fast and becoming so
competitive and complex that personal business sense, intuition and experience
alone are not sufficient to make appropriate business decisions. It is in this
area of decision making that economic theories and tools of economic analysis
contribute a great deal.
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