After identifying the decision objectives

Once the problem has been defined and the cause(s) diagnosed the next step is to decide what would constitute an effective solution. Most problems consist of several elements, and a manager is unlikely to find one solutions that will work for all of them.

If a solution enables managers to achieve organizational objectives, it is a successful one. However, more ambitious objectives may be appropriate. The immediate problem may be an indicator of future difficulties a manager can prevent by taking early action. Or the problem may offer the opportunity to improve, rather than merely restore, organizational performance.

What should be noted about all three aspects of problem investigation is the importance of a manager’s education about the world and his or her imagination!

Stage 2: Develop Alternatives:

This stage may be reasonably simple for most programmed decisions but not so simple for complex non-programmed decisions, especially if there are too many constraints. Too often the temptation to accept the first feasible alternative prevents managers from finding the best solutions for their problems. To prevent this, no major decision should be made until several alternatives have been developed. To increase their creativity at this task some managers turn to individual or group brainstorming, in which participants spontaneously propose alternatives even if they seem unrealistic or fantastic.

Stage 3: Evaluate alternatives and select the best one available:

Once managers have developed a set of alternatives, they must evaluate each one on the basis of three key questions.

Is this Alternative feasible? Does the organization have the money and other resources needed to carry out this alternative? Replacing all obsolete equipment might be an ideal solution, but it is not feasible if the company is already near bankruptcy. Does the alternative meet all the organization’s legal and ethical obligations? Closing a plant to save costs, for example involves a complicated web of legal and ethical obligations to displaced workers. Is the alternative a reasonable one given the organization’s strategy and internal politics? Any solution is only as effective as the support it wins within the organization. Therefore in evaluating an alternative manager must try to anticipate what would happen if employees fail to support and implement it wholeheartedly.

Is the alternative a satisfactory solution? To answer managers need to consider two additional questions. First does the alternative meet the decision objectives? Second, does the alternative have an acceptable chance of succeeding? This assumes that the chances must be calculated in conditions of uncertainty of course, this may be extremely difficult or impossible. Managers should realize too, that the definition of ‘acceptable’ may differ from organization to organization and from person to person depending on the organization’s culture and the risk tolerance of those involved in the decision.

What are the possible consequences for the rest of the organization? Because an organization is a system of interrelated parts and exists among other systems, managers must try to anticipate how a change in one area will affect other areas both now and in the future. Cutting back research and development, for example, might save money in the short term but could cripple the organization in the long run. If the decision might affect people in other departments, they too should be consulted Competitors may also be affected by the decision; their reaction will have to be taken into account. Can competitors respond to a new marketing strategy or a new product? Alternatives with negative consequences should be eliminated, of course and alternatives with positive consequences will usually be favored over those with merely neutral consequences.