Level 3 Diploma in Business Administration Power Point

Level 3 Diploma in Business Administration Power. Point presentation Unit 337 (M&L 15): Principles of leadership and management Understand the principles of effective decision making © 2016 City and Guilds of London Institute. All rights reserved. 1 of 12

Level 3 Diploma in Business Administration 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. © 2016 City and Guilds of London Institute. All rights reserved. 2 of 12

Level 3 Diploma in Business Administration 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. © 2016 City and Guilds of London Institute. All rights reserved. 3 of 12

Level 3 Diploma in Business Administration 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. © 2016 City and Guilds of London Institute. All rights reserved. 4 of 12

Level 3 Diploma in Business Administration 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. © 2016 City and Guilds of London Institute. All rights reserved. 5 of 12

Level 3 Diploma in Business Administration 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. © 2016 City and Guilds of London Institute. All rights reserved. 6 of 12

Level 3 Diploma in Business Administration 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. © 2016 City and Guilds of London Institute. All rights reserved. 7 of 12

Level 3 Diploma in Business Administration 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 © 2016 City and Guilds of London Institute. All rights reserved. Decision is not in line with objectives 8 of 12

Level 3 Diploma in Business Administration 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. © 2016 City and Guilds of London Institute. All rights reserved. 9 of 12

Level 3 Diploma in Business Administration 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. © 2016 City and Guilds of London Institute. All rights reserved. 10 of 12

Level 3 Diploma in Business Administration 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. © 2016 City and Guilds of London Institute. All rights reserved. 11 of 12