1. Understand the principles of effective decision making
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Unit 337 (M&L15): Principles of leadership and management
Understand the principles of effective decision making

2. Understand the principles of effective decision making
Decision making is a vital element of leadership and management
Leaders and managers are expected to make decisions ranging from day to day functionality issues to decisions that effect all organisational stakeholders.
It is vital therefore to understand the process and the principles that underpin decision making.
The first stage in any decision-making process is to set a clear and precise definition of your objective or goal when making a decision. Most decisions involve solving a problem so you need to know your success criteria or, in other words, how you will know or measure if the problem is solved.

3. Understand the principles of effective decision making
Define the objectives
The first step in the decision making process is the define the objective. What are you trying to achieve?
This activity is important as it provides:
focus for the decision making process
foundation for rational decision making
basis for identifying the success criteria
reference point for final decisions.

4. Understand the principles of effective decision making
Define the scope
Who is responsible for the decision, what level decision is being made?
This activity is important as it ensures:
decisions are taken by the right people
appropriate objectives and success criteria are identified.

5. Understand the principles of effective decision making
Define the success criteria
How will you know if the decision is correct?
This activity is important, as it ensures:
decisions are linked to objectives
decisions meet the identified objectives.

6. Understand the principles of effective decision making
Analyse the potential impact of the decision
What will potentially happen if you decide on one course of action over another?
This is important as it:
identifies the best possible option to meet objectives
helps to identify and mitigate potential risks of decisions.
All decisions you make will have an impact. The decision could affect you and others and involve changes that may not be liked. The decision could have time and cost implications
Analysis can include: cost/benefit, cost effectiveness, efficiency, risk probability and consequences.

7. Understand the principles of effective decision making
Obtaining sufficient information
Decisions involve understanding the context of the decision, for example the possible causes of a problem, and identifying two or more optional courses of action. If there was only one option no decision would be necessary.
If sufficient, valid information is not obtained, a correct, accurate decision cannot be made.

8. Understand the principles of effective decision making
Aligning decisions with organisational objectives, values and policies Any decisions made in a business context will need to be aligned with the requirements of the business This may mean that some options, although valid, would not be acceptable. For example:
A decision is made to increase expenditure
This years objective is to reduce overall budget
Decision is not in line with objectives

9. Understand the principles of effective decision making
Aligning decisions with organisational objectives, values and policies
This is important because:
decisions flow into overall strategy
organisational success depends on meeting objectives
values and policies are upheld and followed
stakeholders will have a clear view of links to overall business plans.

10. Understand the principles of effective decision making
Validating Information
To ensure valid information is used to make a decision, information should be:
accurate
free from bias
comprehensive
analysed.
See Handout 1 for more information on this including analysis methods.

11. Understand the principles of effective decision making
Decision making process To address issues, a formal decision making process should be followed. See Handout 1 which outlines several models that can be used to complete this process. You should now complete Activity 1.

12. Any questions?