Decision-Making and Successful Organization - Coursework Example

Running Head: PERSONAL CASE STUDY REFLECTION Personal case study reflection Name Course Instructor Date PERSONAL CASE STUDY REFLECTION Introduction Decision making is becoming an increasingly important topic in research and many articles in regard to issues underlying it have been published. Although this literature has been useful in providing a deep insight into issues pertaining to decision making, no substantial research has examined techniques that can be used to avert incidences of wrong decision making in working environments with high levels of risk and uncertainty (Macmillan, 2000). Scholars and theorists across the board have proposed various decision making analysis techniques which are aimed at providing the user with a logical argument as to how the decision can affect the organization. Each of the decision criterion is justified by a set of axioms that attempt to explain the decision behavior of the decision maker. Exemplifying this are the seminal works of Morgentern and Von Neumann (1974) and Savage (1954). They provide classical examples of quanitative criterion of decision making where the decision maker justifies comparison of alternatives based on a set of assumptions. For instance the axiom system proposes that the subjective value attached to each consequence as well as the possibility of an event can be quantified. However, in reality, the elicitation of information required to make quantitative decisions cannot be adequately assessed in many cases. This is why the qualitative model has been proposed as it provides a better platform for the representation of uncertainties and preferences. This article provides a personal reflection of a decision that I made during my employment and apparently produced unsatisfactory outcomes. The issue will be identified in the light of theories, models and frameworks underlying qualitative decision making and it will further try to examine how these could have been used to deal with future problems. Background of problem While working as the marketing manager in a local company I was mandated to carry out market surveys or market research before the company ventured into a new market. I was consistent with this task until the unfortunate event when I failed to conduct a comprehensive study on an external market that the company intended to explore. This did not only cost my job but also cost the company millions of dollars in loses. Market research serves three basic functions: predictive, diagnostic and descriptive (Duboff & Spaeth, 2000). Under the predictive function, the company takes advantages of changes that are constantly occuring in the marketplace. For instance, Kraft Foods realized increasing demand for green/organic food and low-fat foods and concurrently liaced with other food companies that were renowned in production of healthier foods such as The South Beach Diet. Through the diagnostic function of the market research, the company is able to identify ways it can alter its products or services in order to increase sales. Descriptive function on the other hand presents statements of facts regarding the market. For example, information about the history of sales, belief of consumers towards the products, consumer attitudes as well as competitor analysis can be gathered. These guide the marketer to develop innovative mechanisms and channels of distribution that will place it on a competitive edge. The move to undertake the market venture without prior knowledge about the marketplace was clearly an irrational decision. I could arguably state that I actaully followed all the stages of decision making as stipulated by Condorcet (1743-1794). In the first stage the decision maker examines underlying principles that will serve as the foundation for the decision; various aspects of the issues are examined and the consequences that might result from of each of them. At this point the decisions are personal and one makes no effort to involve a majority (Hansson, 2005). After the management meeting to discuss about the intention of the company to expand overseas, I knew that I had the task to conduct a market research on the proposed market in order to examine its viability. During several instances I tried to calculate how I would go about carrying out the task as their was a wide range of options. This was consistent with Condorcet’s proposal of the first stage of decision making. According to Condorcet, in the second stage of decision making, questions are more elaborate and the decision maker evaluates the mechanisms to approach each of the alternatives based on a set of general facts. In this regard, I attempted to further explore the marketing research alternatives that were available. This incuded taking an actual field trip to the propective country, searching through the internet and contacting established companies in the market. The first alternative seemed rather inconvenient for me as this would mean halting a whole range of activities that had already hit the ground moving such as my second masters program and my newly established business that required my personal attention. The third option on the hand seemed to be tiring and time consuming and in addition would require a lot of logistics and was not a favorable option. The third stage of the decision making process as proposed by Condorcet is the actual choice of the best alternative. I finally chose to do an online market research based on an irrational decision making process. A possible causal factor for my irrational decision could have been consistent with the chuncking theory. Merril et al (2001)states that this theory suggests that learning occurs through a long term accumulation of ideas and knowledge in the memory such that the decision maker gains expertise in making quick decisions when faced by urgent or similar situations. Having worked in the company for twenty years, I assumed that I had gained adequate knowledge concerning new markets and thus there was no need to conduct an actual field analysis. As an expert, I would selectively use environmental cues to achieve computational efficiencies contrary to exhaustive search that is normally done by novices. Also, this could be defined in light of the instance based recognition model which basically entails a trace of the memory through a list of experiences (Gonzalez et al, 2003). A chess player for instance might recall some features of games he/she has played in the past when faced with a complex task. The instance-based recognition model and chuncking theory contribute to strategies and recognition mechanisms. Although these concepts have been hailed as good tools of rational decision making, they encourage over assumptions of variables that would easily lead to detrimental effects. The world of business is rapidly changing and it would be overly simplistic to leave anything to chance. As such, I ought to have conducted an actual market research and not relied on information from the internet which was clearly outdated and shallow. Lack of a comprehensive feasibility study resulted to failure of the venture and led the company to massive losses. Possible theories, approaches and frameworks applicable to the problem Decision making is a vital component in any organization. Research has identified numerous obstacles to rationality in decision making within organizations. Insofar as decision making has been regarded as a factor of prior expectations and preferences about consequences, organizational and individual constraints play a major role in the implementation and optimal solution to the given situation as illustrated by the case of improper market research highlighted above. Standard theories of choice regard decision making as intentional, consequential action based on four things: decision makers have a set of alternatives, they are well adversant with consequences of each alternative, they are aware of preference ordering depending on the subjective value of the alternatives and decision makers have rules by which they use to come to a final choice of a given alternative (Suhonen, 2007). The descriptive regret theory states that when making a decision, an individual should consider not only the consequences that might result from this ultimate choice but also on the consequences that might result from alternatives given the same conditions ((Fitzgerald et al, 2012). Therefore, consequences are not independent from each other and it could be that the only distinguishing factor between the choices is the transitivity assumption. Nevertheless, people tend to pick choices that maximize on utility and have the least level of disappointment and regret. Consistent with this theory, I should have considered consequences of all the three alternatives and thus settle on the one that would produce the largest returns and prevented regrets. An actual field trip to the new market would indeed provide the best results as first hand information concerning consumer desires and preferences, government regulations and competitor analysis would be acquired relative to the other methods that relied mainly on assumptions. Classical planning is yet another method that could be used to evert a recurrence of the situation that was experienced in the organization. According to classical planning, information required for a given venture is adequately supplied and complete. However, the model states that uncertainty is inherent as it would be impossible to learn about all aspects underlying a given situation. In that case therefore, planning should be performed through a lot of discussions and negotiations with various agents if success is expected (Paul & Wright, 2004). This introduces the concept of teamwork. The team should first recognize existence of partial information regarding the situation at hand and thus explore mechanisms of filling the gaps through collective effort. In addition, planning requires specifications of some operating frameworks which basically define the goals and beliefs of the venture. Such a framework provides a platform to build representation of operators, processes, plans and actions. In line with this argument, I should have established a team in deciding the best alternative to select for the marekt research. Paul & Wright (2004) assert that although conflict is unavoidable in a team comprising of people with varying view points, members should ensure that personal objectives do not preside over the objectives of the entire team. Information is paramount in shaping the success of a choice. As such, information search through the internet as well as other forms of literature should be done thoroughly. In addition, I would highly recommend that the team relies on value judgement rather than factual knowledge as it is not always sufficient. Through value judgement, one is able to critically evaluate alternatives based on weight of attributes they possess and those possessed by alternatives. Besides that, preferences need to be expressed qualitatively since quantitative values are inadequately sufficient in providing true arguments. Once a decision maker categorizes his situation as typical or atypical, he should then determine the utility, that is,the accuracy of a possible action in the specific situation. The instance-based learning theory proposes two approaches for judgement: typical situations should use previous information while atypical situations should make use of heuristics. The decision maker in atypical situations use heuristics to determine the possible success of a given decision. This could be based on given environmental cues, goals or instructions. A market research is a typical situation and thus would require the decision maker to apply a set of established rules in order to achieve expected goals. According to the instance-based learning theory, the decision maker determines the utility of an action based on the utility generated by pasts events. Likewise, the case-based reasoning model proposes that the decision maker retrieve past events that are most similar to the current situation (Gilboa & Schmeidler, 2000). In this regard therefore, it would have been proper if I made reference to past marketing researches that I had conducted in foreign countries before settling on the idea of undertaking an online task. Retrieving on my memory, it is quite clear that all the researches I had done on foreign countries involved actual market visits contrary to domestic market which could comfortably do with an internet search. Based on this information, it would only be proper to conduct a field study as this had proven successful in past events. According to the instance-based learning theory, there are two intermediate strategies of choice: optimizing and satisficing strategies of choice. Wixted (2007) asserts that evaluation of more than one alternative is based on the decision makers level of necessity. Beside that, the decision to use the first alternative is based on the fact that it is the option that works best regardless of events and time. In line with this argument, the instance-based learning theory suggests that the decision maker should evaluate temporal relationship that exists between output and events hence react more closely to the alternative that would performe best over the stipulated time frame. In making the decision to forego the field strip for the online search, I should have evaluated the time span that was available to complete the task and make a final judgement out of it. In actual fact, there was adequate time allocated to complete the market research before handing the final report to the management board. Essentially, I would have conducted a short physical field study and thereafter carried out an internet search based on the information I collected from the field. This would have provided more detailed information about the market. Conclusion Decision making is indeed a crucial role in the running of successful organization. Wrong decisions can be produce detrimental effects to the individual making them and to the entire organization as well. My decision to undertake an internet market research rather than the traditional field visit research was clearly an irrational as it did not take itno account theories, approaches and frameworks underlying decision making processes. The descriptive regret theoory suggests that an individual should consider consequences of his bes choice as well as those of alternatives in making determining the best choice. Classical planning is also another strategy that would have been applied in the scenario of organizational decision making as it provides the decision maker with a sequence of undertaking events in a logical manner thus eliminates possiblity of leaving out some issues unattended. The instance-based learning theory contains several concepts that basically require the decision maker to refer to past experiences in order to make rational decisions concerning current situations. With insight of theories and approaches discussed above I would have made a more informed decision on the best method od market research to conduct and this would certainly accrue the cmpany a lot of profits in the new venture. References Duboff, R., & Spaeth, J. (2000). Market research matters: Tools and techniques for aligning your business. New York: John Wiley and sons. Fitzgerald, M., Ayson, S., & (eds). (2012). Managing under uncertainty: a qualitative approach to decision making. Sydney: Pearson. Gilboa, I., & Schmeidler, D. (2000). Case-based knowledge and induction. IEEE Transcationa on system, man nad cybernetics-Part A: systems and humans, 30(2) , 85-95. Gonzalez, C., Lerch, J., & Lebiere, C. (2003). Instance-based learning in dynamic decision making . cognitive science, 27 , 591-635. Hansson, S. (2005). The decision theory: A brief introduction. Stockholm: Royal Institute of Technology (KTH). Macmillan, F. (2000). Risk, Uncertainty and Investment DecisionMaking in the Upstream Oil and Gas Industry. A thesis presented for the degree of Ph.D. Merril, E., Sun, R., & Petterson, T. (2001). From implicit skills to explicit knowledge: A bottom-up model of skill learning. congnitive science, 25 , 203-244. Paul, G., & Wright, G. (2004). Decision analysis of management decision . Chinchester: Wiley. Suhonen, N. (2007). Normative and descriptive theories of decision making under risk: A short review. North Karelian: University of Joensuu. Wixted, J. (2007). Dual-process theory and signal-detection theory of recognition memory. psychology review, 114(1) , 152-176. Read More