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AVIA1401-Decision-Making Using An Aviation Example

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Question:

Discuss two theories of expertise, in terms of decision-making, using an aviation example to illustrate your point/s.
 
 

Answer:

The decision-making processes are often considered to be one of the most important parts in the smooth operations of the business organization. The key function of the management generally refers to the selection and the implementation of the proper decision that needs to be maintained within the concerned business organization (Beach and Lipshitz 2017). These decisions are known to be responsible for the proper implementation of the activities that need to be implemented by the both the organization as well as the managerial bodies of the organization in discussion. There are two different theories that pertain to the decision-making practices that are undertaken by the multitude of the organizations operating in the global scenario. The two different types of theories that are related to the decision-making within the organization are the normative or the rational theory of decision making and the behavioral theory of decision-making (Kochenderfer 2015). The following essay deals with the theories that pertain to the decision making within the multitude of organizations that have been operating in the global market. The following essay tends to discuss the theories of decision-making activities that have been undertaken by the several companies that have been operating within the Australian airline industry.

Qantas Airways is one of the most famous airline organizations that have been operative within the Australian market. The concern is known to be the flag carrier of the country of Australia. The airline company is known to be the largest in the Australian territories on the basis of the size of the fleet of the airlines, the number of the international flights that the airlines has been undertaking and the number of the various international destinations that the airlines has been visiting. The airlines have been known to be the third in the world on the basis of the time span of the activity within the global airline market. The company was founded in the month of November in the year 1920 (Qantas.com 2018). The company had been conducting international flights since the year 1935. The company is known to have been based in the suburb of Mascot in Sydney and has been operating out of the main hub located in the Sydney Airport. The company is also known for the extending their services to almost 14.9% of the total number of people who have been taking inbound as well as outbound flights in Australia (Qantas.com 2018). The company is known to have been owning a huge fleet of 127 airplanes that serve at 85 different locations all over the world (Qantas.com 2018). The concerned company is known to have earned a revenue of 16.1 billion Australian dollars in the year 2017 (Qantas.com 2018). The total number of the workforce members of the airlines is 26150 members as in the year 2017 (Qantas.com 2018).

The decision making in the organizational context requires the proper implementation of the various information regarding the matters that are to be undertaken by the organization in discussion. The decision-making capabilities within the organization lie with the members of the managerial body within the organization (Renfree et al. 2014). The concerned management of the organization needs to have a proper knowledge in the matters that pertain to the information over the overall performance of the company as well as the issues that might be faced by the company with respect to the operational market as well as the employees within the organization. These decisions are known to be responsible for the proper implementation of the activities that need to be implemented by the both the organization as well as the managerial bodies of the organization in discussion. There are two different theories that pertain to the decision-making practices that are undertaken by the multitude of the organizations operating in the global scenario. The theories of the decision-making are generally divided into two different theories. These are the normative theory of decision making and the behavioral theory of decision-making.

Normative theory

The normative theory of the decision making refers to the theory that was formulated by Ansoff and Peter Drucker. This theory is linked with the various disciplines of economics, management and the researches in the operations. This theory is concerned with the matters that pertain to the decision-making style of the managers that need to be implemented in order to deal with the improvement in the overall performance of the organization (Davis?Sramek, Thomas and Fugate 2018). The normative theory of making decisions within an organization tends to discuss the ways in which the effectiveness and the efficiency of the organization might be improved and enhanced.

The normative theory tends to assume the presence of information that is perfectly clarified. The information that is made available is considered to have a proper certainty within the organization. The decision maker is known to be attempting a maximization of the proper behavior among the various members of the organization (Montano and Kasprzyk 2015). However, this theory of the decision making has some drawbacks as well. The major drawback of this theory might lie in the application of the theory in the real-life applications within an organization. This is due to the subjectivity of the concept of value within an organization. The other drawback lies in the fact that the decision-maker might not be aware of the various processes such as the sampling processes, the probability techniques, the linear probability techniques and other such techniques (Thompson 2017).

An example of the normative leadership might be found in the case wherein the concerned management of Qantas Airways had taken the decision of relenting on the flights to Taiwan despite the warnings from the head of the foreign affairs (Abc.net.au 2018). In this case, the chief executive of the company, Alan Joyce argues that the maintenance of the business relationship with the concerned country follows the code that is set by the Australian Government (Qantas.com.au 2018). 

 

Behavioral theory

The behavioral theory of decision making was proposed by the eminent theorists Cyert and March. The behavioral theory majorly relates to the matters that pertain to the behavior of the various individuals, employee groups as well as the other people who have been attached to the concerned organization (Breen, van de Werfhorst and Jæger 2014). This is unlike the matters that pertain to the normative theory of decision making. The normative or the rational theory of decision making is generally linked with the various disciplines of economics, management and the researches in the operations within the concerned organization. The concerned theory of decision making considers the matters that pertain to the actual processes and the techniques that are undertaken by the concerned management within the organization. In this case, unlike the rational or the normative theory, the behavioral theory does not concentrate majorly on the discussion of the ways in which the effectiveness and the efficiency of the organization might be improved and enhanced (Pettigrew 2014).

The behavioral theory of decision-making considers the assumptions that are related to the matters that pertain to the coalitions within the organization, the several goals that are set by the concerned management of the organization. The behavioral theory also takes into consideration the matters that pertain to the slack that is observed within the operations within the organization. This is in contrast with the normative theory that tends to assume the presence of clarified information. The normative theory unlike the behavioral theory considers the available information to have a proper certainty within the organization. The decision maker in case of the normative theory is known to be attempting a maximization of the proper behavior among the various members of the organization. The major drawbacks of the organization tend to lie in the viewpoints of the concerned theorists. The behavioral decision makers tend to deem the coalitions to be acts of compromise within the organization. The theory also tends to discuss that the existence of the organizational inefficiency as the waste exists due to the bounded rationality of the managerial body of the organization that might affect the resource misallocation. The behavioral theory also states that the goals that have been set by the concerned organization might experience the action and the counter action among them.

An example of the behavioral theory of decision making might be found in case of Qantas Airways. The annual reports of the organization state that the decision-making practices that are undertaken by the concerned company in discussion, Qantas Airways tend to depict the extensive usage of the behavioral theory of decision-making as discussed by Cyert and March (Investor.qantas.com 2018).

In lieu of the above discussion, it might be stated that the key function of the management generally refers to the selection and the implementation of the proper decision that needs to be maintained within the concerned business organization. The normative theory of making decisions within an organization tends to discuss the ways in which the effectiveness and the efficiency of the organization might be improved and enhanced. The behavioral theory majorly relates to the matters that pertain to the behavior of the various individuals, employee groups as well as the other people who have been attached to the concerned organization. This is unlike the matters that pertain to the normative theory of decision making. Thus, it might be concluded that both the theories of decision-making play a hugely important role in the matters that pertain to the organizational performance thereby affecting the competitive advantage of the company in discussion, Qantas Airways. 

 

References

Abc.net.au 2018. Turnbull defends Qantas decision to refer to Taiwan as Chinese territory. [online] ABC News. Available at: https://www.abc.net.au/news/2018-06-05/turnbull-defends-qantas-bowing-to-beijing-pressure/9836446 [Accessed 28 Aug. 2018].

Beach, L.R. and Lipshitz, R., 2017. Why classical decision theory is an inappropriate standard for evaluating and aiding most human decision making. Decision making in aviation, 85, pp.835-847.

Breen, R., van de Werfhorst, H.G. and Jæger, M.M., 2014. Deciding under doubt: A theory of risk aversion, time discounting preferences, and educational decision-making. European Sociological Review, 30(2), pp.258-270.

Davis?Sramek, B., Thomas, R.W. and Fugate, B.S., 2018. Integrating Behavioral Decision Theory and Sustainable Supply Chain Management: Prioritizing Economic, Environmental, and Social Dimensions in Carrier Selection. Journal of Business Logistics, 39(2), pp.87-100.

Investor.qantas.com 2018. QANTAS Annual Report 2017. [online] Investor.qantas.com. Available at: https://investor.qantas.com/FormBuilder/_Resource/_module/doLLG5ufYkCyEPjF1tpgyw/file/annual-reports/2017AnnualReport.pdf [Accessed 28 Aug. 2018].

Kochenderfer, M.J., 2015. Decision making under uncertainty: theory and application. MIT press.

Montano, D.E. and Kasprzyk, D., 2015. Theory of reasoned action, theory of planned behavior, and the integrated behavioral model. Health behavior: Theory, research and practice, pp.95-124.

Pettigrew, A.M., 2014. The politics of organizational decision-making. Routledge.

Qantas.com 2018. Fly with Australia’s most popular airline | Qantas AU. [online] Qantas.com. Available at: https://www.qantas.com/au/en.html [Accessed 28 Aug. 2018].

Qantas.com.au 2018. [online] Qantas.com.au. Available at: https://www.qantas.com.au/infodetail/about/corporateGovernance/2017CorpGov.pdf [Accessed 28 Aug. 2018].

Renfree, A., Martin, L., Micklewright, D. and Gibson, A.S.C., 2014. Application of decision-making theory to the regulation of muscular work rate during self-paced competitive endurance activity. Sports Medicine, 44(2), pp.147-158.

Thompson, J.D., 2017. Organizations in action: Social science bases of administrative theory. Routledge.

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