Describe about the Influencing and Making Decisions for the Field of Management.
Globalization is the term used everywhere in the present business scenario. It has bought the world closer to each other which have lead to emergence of new techniques. This has created multiple problems in the field of management. The problem solving procedure starts with decision making by recognizing the problems, understanding the continuous pressure to act upon it, and finally resolution of problem. This procedure is undertaken by the managers whose key role is to identify the problem and finding a relevant solution. It is managed through good decision making planning to evaluate the result. A good decision is eventually made through logical thinking. They are the assumptions which are formulated after evaluating the problem. It helps in benefitting the organizational strategy through problem solving(Chai, J., Liu, J.N. and Ngai, E.W., 2013). Decision making is a method of making preferences by recognizing a decision by collecting information, and finding a resolution. Gradual decision-making process helps in making more premeditated, considerate decisions by systematize appropriate in sequence and significant substitute. Successful decisions helps in making revenue to the company whereas unsuccessful decisions causes loss. Hence effective corporate decision making is the most important process in an organization (How to Make Decisions, 2016).
In the decision making process the manager chooses one desired action from the given suitable situation which suites the most. The manager executes the decision by using various decision making techniques, tools etc. additional decisions are made keeping in mind the goal of the organization. Decision making is a difficult process which involves dissatisfaction of various parties whose interest is involved with the decision.
The performance of an individual is affected by the various factors which are attached with the problem. There are various factors that affect the overall productivity under given circumstances, Psychological decision making involves individual decision making in the context of his needs, preference and priorities. Cognitive decision making is a result of constant development of respective surrounding and environment. Normative decision making deals with an individual knowledge concerned with logics, choices etc (Bouyssou ET al.2013).
A major part in a decision making process requires analytical evaluation of various terms which describes the finite series. Another task is to systematically ranking of the various tasks attached with the problem. The decision maker has to find the most relevant option to resolve the issue relate to the problem(s) after analyzing each criterion related to the problem. Next task is to locate the best alternative to resolve the current situation. The idea of decision making has attracted many people as it helps in increasing the overall productivity. Multiple-criteria decision analysis gives different result when applied to different data. It leads to formulation of the decision-making paradox. Rational decision-making is a part science-based occupation which requires skilled knowledge to be applied in order to receive the relevant result. For example: In medical decision making specialized knowledge is required to resolve the problem. Whereas naturalistic decision-making process reflects that in circumstances with advanced time pressure, elevated hazards, or bigger uncertainties, specialist may exercise spontaneous decision-making rather than planned approaches. They use those experiences which help in quick decision making by putting the remedy as per prevailing situation.
Social surrounding play a major role in decision making process as it reflects the thought process of decision-maker. Environmental difficulty causes a cognitive action. A complicated environment leads to majority of different situation which affects the number of situations related to a problem. A study shows that more complex environment leads to the cognitive decision. The decisions are majorly affected by the social environment largely. It causes a great fluctuation in the behavior of an individual. Majority of decisions are arrived due to the respective surrounding where a person works with his team.
Decision Making Process
Decision making process is an important decision to be undertaken differ the long term benefit of the organization. There are 8 relevant steps necessary to be followed for achieving success in decision making. Every step has to incorporate different set of techniques and tools to achieve the desired result.
Recognition of the reason of the decision
The first step is related to identification of the problem to be analyzed. A though analysis of situation is required to retrieve the result. It is recommended to ask couple of question while identifying the issue related to the given situation.
- What are the crises?
- Why is recommended to resolve the problem?
- Who all are affected by the current crisis?
Does the situation have a limited time period or not?
There are various stakeholders who’s inters t lies with the interest of the organization. There is numerous numbers of factors which are attached with the current situation. Each factor need to be given equal attention while moving further decision problem of an organization. It is necessary to gather ample of information related to the situation for finding the relevant situation. Check list is an effective tool used to gather information related to compilation of the problem.
Principles for judging the alternatives
Finding an alternative is an appropriate function while choosing a desired goal. Organizational goal and corporate culture is given priority while considering the relevant option. For example: profit is a major concern in the process of decision making. Baseline principle is important to be identified while choosing a particular alternative.
Devise and analyze the different choices
It is advised to derive multiple solutions before implementing it. Understanding of problem is essential before implementing the desired solution. Managers use Cause-and-Effect diagrams and Pareto Chart tool. Cause-and-Effect relationship diagram helps to identify all probable grounds of the crisis. Pareto chart assists to the manager by setting the relationship in between the cause and effect. Later one can find the probable solution that gives the maximum result within the stipulate time.
Estimation of substitutes
Judgment principles and decision-making criteria are used to assess each alternative. Knowledge and efficiency of the decision philosophy helps in effective implementation of the policies. Each alternative need to be compared for understanding the positives and negatives related to the object.
Choosing the best option
It’s essential to apply the relevant solution as per the given alternative. After effective assessment of individual step it is recommended to implement the most appropriate step to achieve the desired result.
Implementing the choice
Second last step involves converting of the problem into a relevant situation pertaining to the environment. It is necessary to implement the relevant choice as per the desired solution.
Evaluate the results
The final step is related to evaluation of the desired result by implementing the appropriate solution to the problem. It help in future relevancy related to the executing a decision at a future date.
Why Decision-making Matters
Decision-making is an important activity to be undertaken in order to find the truthful fascinating solution to a problem. It is an ability to make effective decisions that are balanced, knowledgeable, and mutual to strongly balance the organizational goals. Effective decision-making is a pivotal role for achieving success. It requires finding the best suitable option out of various available options. The manager weighs various paths to derive an appropriate result.
Decision making style
Factors affecting decision making
There are various factors which affect the decision making in an organization. It involves past experience, various cognitive biases, an escalation of commitment and outcomes, which includes age and socio-economic status. These things affect the decision making procedure. Past decision making affect the future decisions made by an individual. It is believed that if a person achieve a positive result due to some past decision, he is more likely to take similar decision in future. People tend to avoid mistakes in past. It is not necessary that the decision based on past experience is not always good. In case of financial decision making the decision are made only by considering the present situation rather than the past decision(Nutt and Wilson,2010).Cognitive biases influence people by causing them to rely on the past knowledge and experience. The cognitive decision helps in taking more stable decision rather than any other individual approach. People tend to spend more time money and effort to that decision’s which requires high level of efficiency. They take more risky decision if they feel responsible for the sunk cost related to the object.
Some individual differences also affect the decision making. Researcher states that age, socio-economic status affects the decision taking ability of an individual. It is believed that old people are more overconfident regarding the ability to make decisions. It is also stated in the research that older adult s tend to prefer lesser choices as compared to the younger adults (Decision-Making Styles, 2016).
There are numerous perspectives for achieving an effective decision making. There are various key points in decision making theory that are essential for revealing different styles related to decision making. Decision making style is of three types:
A decision is derived from the needs and desires of the individual while making the decision. The decision making depends upon the individual understanding. The individual gives preference to the basic needs adjoined with his behavioral pattern. A person tends to take only those decisions which he thinks are most preferable. Psychological decision making helps in indicating the mental condition of an individual while making significant decisions regarding the particular situation. Psychological needs are the rational needs that induce an individual to attain goals as per his choice. They are different from material needs, which are more relevant related to the materialistic comfort (Decision Making, 2016).
There is a relevant relationship in between the environment and individual. Decisions affect the environment which on other hand affects the long term productivity of an organization. This type of decision making activity affects the environment in an organization. The integrated feedback system helps in managing the future decision in an organization. This type of decision making style affects the regular iterative cycles and regular assessment of the reaction and impact of any decision. In psychology, decision-making is observed as the cognitive process which results in mixture of a principle or a course of action amongst some alternative promises. Decision-making process helps in producing an ultimate choice which may or may not be a quick act (Merigó and Gil-Lafuente, 2010).
Decisions are based on the ability to communicate rationally. It means that decisions are believed to be concluded out of the shared logic among the people.
Vroom acknowledged five types of decision-making procedures, which depends on the participation made by the variety of leaders
Decide: The leader formulates the decision or solves the crisis alone and proclaims his decision to the group. Later the leader gather the information from the group(Bazerman, M.H. and Moore, D.A., 2008.).
The leader reaches the individual group member and tells them about the problem. The leader accounts the group member’s proposals and makes a decision according to the information collected from different people. The leader under this approach compiles the relevant information as per the source (Malakooti, 2010).
The leader holds a group meeting where he keeps the problem to the group. The members are asked to add and make proposals during the meeting. The leader makes his decision as per the requirements. The leader has all rights to choose or to discard suggestion made by the team.
Under this approach the leader put forward the problem in front of the people in the group. He conducts a meeting to find an appropriate resolution through the team efforts. This theory is different from the consult (group) theory as here leader takes an opinion of every individual present in the group unlike the previous case (Adair, J2010).
The leader does contribute in the decision-making process. The leader delegates the problem to other for seeking the relevant decision. This process helps in encouraging the employees for a quick decision making. The employees are independent to take decision (Chelst and Canbolat, 2011).
Each theory has its own importance while finding a relevant solution. In case of decision making a correct approach towards a problem is appreciable while making a correct decision. From a cognitive perspective there are certain models which are useful for shaping the decision making in an organization (Saaty, 2008). These styles are useful for proper utilization of the resources available with an organization. This stylist model helps in a quick decision making under the prevailing situations (Frederick, 2005).
Optimizing Vs. Satisfying
Decision making depend upon the variable information rests with an individual. In case if a person has limited information it is difficult to find an appropriate objective. Decision making are highly affected under certain situation. A person finds difficulty in framing the correct solution as per the given information. Satisficer will try to recognize s necessary flaw, and favor quicker other than less ideal choices while a maximizer will opt for a long time to find an optimal solution to the problem. This can be observed as a variety, and each decision is viewed with changeable intensity of excellence (Bruce, 2016).
Intuitive vs. Rational
This approach is given by Daniel Kahneman. There are two separate minds which compete with each other in order to succeed or to influence each other. One part is the conscious and the other is subconscious outlook. The subconscious mind (referred to as System 1) is mechanical and instinctive which quickly consolidates data and produce a decision immediately. The conscious mind (referred to as System 2) needs more endeavor and contribution, using logic and motivation to create an unambiguous preference.
Combinatorial vs. Positional
This relationship was forwarded by Aron Katsenelinboigen which is based on the game of chess where the two players compete against each other. The player uses series of decision to make the final decision. Each decision taken during the procedure is important while making any further decision. The positional decision-making approach is uncertain keeping in mind the concrete objective related to the object. Each move from this kind of player would make the most of alternatives as divergent to follow a result (Rapoport, 2013).
The Garbage Can Model
The Garbage Can Model of organizational choice was created by Cohen, March and Oslen. The Garbage Can Model agrees with the prototype or flow of multiple decisions in an organization. The model was developed due to the pattern of the decision making in organization due to high level of uncertainty. It is developed due to the ambiguous behavior which is related to the ambiguous behavior that contradicts the classical theory (Yu, 2013). The Garbage Can Model is highly prejudiced by the comprehension that tremendous cases of aggregate uncertainty in decision making environments activate behavioral reactions. It appears irrational from a distance which, at least from a distance, appear "irrational" or not in agreement with the global rationality. An organized lawlessness is caused due to Problematic inclinations, uncertain, inadequately unstated knowledge, and Turnover (Dietrich, 2010)
The theoretical Garbage Can Model disconnects problems, solutions and decision makers from each other. Specific decision makings caused due to a series of decision making related to the various aspects connected with the problem.
Problems require special attention by the manager in a decision making process. They are the consequence of performance gaps while deciding the future. Thus, problems may originate inside or outside the organization. The problem may occur inside or outside the organization. Every problem needs a systematic dealing with a problem (harrison, 2012)
Solutions are the answer to the appropriate problem. It depend upon the way a person deal with the problem. A solution depends upon the outlook of a manager which is essentially to be given priority while resolving the issue.
These are the best appropriate alternative necessary for an organization. There are various alternatives available while taking a decision related to the problem. It is the duty of the manager to find a most appropriate way to choose an appropriate alternative (bazerman, m.h. and moore, d.a., 2008.).
Participants vary from one problem to other. It depends upon those for whom decision is been taken. The organizational decision making is a random quality undertaken to retrieve a most appropriate result. When a problem happens a solution is proposed by the participant’s .equal opportunities is given to every member in the staff to create a sense of responsibility in an organization (brest and krieger, 2010).
The Carnegie model was founded by Richard Cyert, James March and Herbert Simon. This model helped to devise a rational approach to individual decision making. It helped in providing new insights about organizational decisions. An organizational decision involves decision taken by the managers in an organization. Managers are solely responsible to take decision in the behalf of the whole staff. .
The coalition process has several steps:
Firstly it starts with satisfactory decision that is used to achieve goals. Secondly an instant environment for determining a problem is suggested by managers. The appropriate solution related to the problem can be discussed among the staff by bargaining the current situation. Coalition is a major part of organizational decision making process. The solution formed during this process is rapid, simple and cost efficient.
These two models are used to solve the problem of decision-making in an organization. These methodology forms an effective part of a decision making process by systematic implementation of policies.
Decision making process helps the manager to choose one desired action from the given available situation. In the given report the decision making process is taken by the manager through different techniques, tools etc. additional decisions are made keeping in mind the goal of the organization. There are three styles which are involved in decision making process. These are psychological, cognitive and normative approach. These approach forms a major part of the decision making process. It helps in making a quick decision for the welfare of the organization. Decision making is a difficult process which involves dissatisfaction of various parties whose interest is involved with the decision. The Garbage Can model and Carnegie model are the two effective models used to systematically execute the desired problem related to the given solution. The manager has to apply his skills while making the decision related to the particular object.
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