Question:
Can the knowledge about risk perceptions and attitudes of key decision making subordinates, enable a senior manager in a business organization to better manage decision making in his organization?
Answer:
As stated by Baucells and Rata (2006), an individual’s perception towards risk depends on the assessment of probability and the consequence of the events. Workplace risk assessment depends on how well the risk is assessed and exposed rather than the probability and the consequences. There are numbers of factors that directly contribute towards the decision making ability of a subordinate. The internal factors include memory, experience and ability to fight against stress; while the external factors are work environment and sensory information to influence one’s perception and decision making ability. Therefore, there is no doubt that individual having knowledge on risk perception and attitudes will be able to make better managing decision. Apart from these, factors like emotions, moods, reasoning also hold equivalent importance when it comes to decision making. However, people who remain more social gather better knowledge and more experience that directly help them to make better decisions in their life.
In the view point of Morse (2006), people making wise decisions depend on the experience one had in their life. This automatically involves various contributing factors as well that actually differentiate a person from other. However, Bleda and Shackley (2008) argued that in spite of having these contributing factors, it happens at times that a person fails to show the actual leadership or managerial skills that help to manage decision. The professional decision making choices are mostly risky choices where the subjects are seemed to be more cautious in their private domain. In such cases, the risk management involves various other factors like monetary decision and corporate tolerance rather than depending on an individual. Moreover, the consequences can be many as well. This is the reason that experience and the ability to handle risks make it possible for a person to undertake risky operations and make better decision.
References:
Baucells, M. and Rata, C., 2006. A survey study of factors influencing risk-taking behavior in real-world decisions under uncertainty. Decision Analysis, 3(3), pp.163-176.
Bleda, M. and Shackley, S., 2008. The dynamics of belief in climate change and its risks in business organisations. Ecological Economics, 66(2), pp.517-532.
Morse, G., 2006. Decisions and desire. Harvard Business Review, 84(1), p.42.
