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Business Skills for Effective Decision Making

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  • 0:02 Businesses & Decision Making
  • 0:46 Cognitive Skills
  • 1:41 Non-Cognitive Skills
  • 2:51 Technical Skills
  • 3:30 Lesson Summary
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Lesson Transcript
Instructor: LeRon Haire
In this lesson, we'll introduce and review several key business skills. These skills are necessary in order for individuals and organizations to develop effective decision making techniques.

Businesses & Decision Making

Let's assume that you're the supervisor at a local sports apparel store, and you have been tasked with determining which sports and which teams' apparel you would like to sell in your store. Of course, keep in mind that your ultimate goal is to generate revenue, so it's important that you choose the right sports and the right teams. But how do you go about deciding?

This situation is only a sample of the types of decisions businesses and organizations must make on a daily basis. These decisions are costly because they could ultimately determine the livelihood of the employees. In other words, the wrong decision may cost people their jobs. Back to the original question: How can individuals go about making effective decisions? Let's take a look at three business skills which are vital for effective decision making.

Cognitive Skills

Many of you may have heard the word 'cognitive' thrown around, but perhaps it was used in a context that made it difficult to understand what it meant. Cognitive abilities are skills that entail some form of mental thinking, such as critical thinking or analytical skills. These are typically referred to as brain-related skills because they require using the old noodle. From the smallest organization to large conglomerate corporations, cognitive abilities are needed to make effective business decisions. Every type of business or organization needs these thinkers, no matter how small or inept the organization may seem.

For example, Coca-Cola needs employees with cognitive business skills because there are often multi-million dollar decisions that are on the line. In contrast, a small five-employee business may need cognitive skills because they must be able to determine (for example) the schedule for workers so no one gets over or under 40 work hours (which is often the difference between being in business or out of business).

Non-Cognitive Skills

Just as we've reviewed the importance of cognitive skills, non-cognitive skills are also needed in order for effective decision making to occur in organizations. Non-cognitive skills do not concern themselves with critical-thinking but deal with the behaviors and attitudes that people display. The non-cognitive business skills are often more associated with intangibles, such as pressure, self-control, and motivation. Many everyday decisions in business rely on the decision makers not becoming overwhelmed and making an irrational decision.

Let's say that Sam works for a major company that deals with shareholders, and he is personal friends with several of those shareholders. It is imperative that Sam have non-cognitive skills because he is responsible for making executive decisions that may have a profound impact on several shareholders of a company. Sam's decisions could be the deciding factor on whether or not individuals choose to remain with a company and hold shares.

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