Comparing solution

Most decision-making involves problem-solving, and managers arrive at their answers in a wide variety of ways. For example, there might be a clear and correct answer (based on facts and figures); there might be an insight that feels right (based on experience); there might be a solution that you need to test by carrying it out (or carrying out a simulation of it); there might be a solution that works in the short term but not in the long term (such as throwing money at a scheduling problem); or there might be a fuzzy solution - one that seems to work but does not product and waiting to see if it changes the parameters of the marketplace).

Understanding risks

Most decisions involve an element of risk, though some are less risky than others. Sometimes, even when theoretical options exist, their disadvantages are so great that there is no real alternative. This may arise from a bad original decision. For example, an organization has overstretched itself financially bu deciding to invest in a new factory. It could decide to halt the project, but only at the risk of immediate financial collapse. That may be averted if the new plant eventually meets its targets. Therfore, to retreat is riskier than to proceed. Also remember to watch for side effects. Cutting staff may seem a safe decision, but not if it risks deterioration in customer service.