How To Make Good Decisions Business

Making decisions in business is an exercise that entrepreneurs and managers must undergo. However, making good decisions may seem to be a real challenge, if not difficult. These decisions are crucial to the survival of the enterprise itself and have some influence either small or large on the performance of the enterprise.Therefore; entrepreneurs being the sole owner of the business as well as managers must develop decision making skills. Results of a recent study conducted to determine what contribute to being an effective European manager, indicated that decision-making ability is the most desirable skill a manager can possess. Managers in business organisatins, governments offices, hospitals, etc must all make decisions; either selecting available alternatives or inventing an alternative different from the existing ones

Two types of managerial decisions are to be distinguished:

• Programmed decisions are decisions made to solve problem that are repetitive, the procedures and rules for solving these problems are known and established. Eg: processing payroll vouchers;
• Nonprogrammed decisions are decisions made to solve complex problem that has not previously occurs.eg: introducing a new product.

Nonprogrammable decision is a huge task in small & medium enterprises.The entrepreneur may not have the managerial and financial resources to deal with difficult situations when they arise. He might base his decision on intuition, creativity, etc, which will have an impact either positive or negative to the on the business. Therefore ,you must develop a decision making process that will enable you to make decision ;decisions are means rather than ends and it is not a fixed procedure but a sequential .So when problems arise how can you as an entrepreneur and manager develop a decision making process that will enable you to make good decisions.
1- Problem identification
The decision making process start with identifying or locate problems. To identifying problems, entrepreneurs rely on some indicators:

• Deviation from past performance: A sudden change in some established pattern indicate that a problem has developed.eg:sales decline; more defective units are produced,etc
• Deviation from the plan: When results do not meet planned objectives, it is an indication that there is a problem.  e.g.: a new product failed to meet its market share objective
• Outside criticism: the actions of outsiders may indicate there are problems. e.g: Customers may be dissatisfied with a new product; employees may present a grievance, etc 

2.- Develop alternatives solutions
Once the problem is defined, potential solutions to the problem should be developed; this will depend on the time and cost constraint of the enterprise.
3 - Evaluating Alternatives
When all alternatives solutions being developed, they must be evaluated and compared; the objective being to select the alternative that produces the most favorable outcomes.e.g: Maximizes share holder wealth; improving customer satisfaction;etc