Decisions Analysis Based on Related Models, Frameworks and Theories - Qantas - Literature review Example

Personal case reflection Name Institution Personal case reflection Executive Summary Over the years, decision-making has been a critical factor for the CEO and top-level managers in every organization. The kind of decision a manager make can make the company by a success or failure. Equally, it may taint an individual as a poor manager or decision maker. Therefore, this paper focuses Personal Case Reflection of the decision I undertook recently in the organization. The paper will give the account of the decision and analyze using relevant models, theories and frameworks including heuristics and biases, rationality and bounded rationality, and ethical frameworks (utilitarianism). In addition, the strengths and weaknesses of the decision will be critical discussed to understand its impact on the business. Lastly, it will provide recommendations on how I could have manage the issues, if had exposure on the academic frameworks, theories and models. Table of Contents Personal case reflection 2 Executive Summary 2 Table of Contents 3 1.0 Introduction 4 2.0 Decisions Analysis based on related models, frameworks and theories 5 3.0 Critical assessment of the decision’s strengths and weaknesses 9 4.0 Recommendations 10 4.1 Need for information 11 4.2 Involvement 11 4.3 Combination of different theories and models 12 5.0 References 12 1.0 Introduction Decision-making is defined as process defines as the process of making a choice amongst several alternative aspects of action so as to realize a particular goal (Dietrich, 2010). Whilst management experts regard management as decision-making body of the organization, almost half of decisions management make particularly by the managers often fail. In that case, improving decision-making effectiveness is vital in maximizing the effectiveness and efficiency within the organization then members of the organization normally apply the information received to make a number of decisions. Krantz, & Kunreuther (2007, p.139) posited that he decisions could impact negatively the life of organizational members and shift the activities of the company. It was the situation I had to go through after making bad decisions. With the anxiety to get the job experience while still pursuing my university education, an opportunity manifested itself when Qantas advertised internship cum management trainees’ vacancies for continuing students. Without hesitating I applied and was invited for the interview which I passed. I did well during the internship and after three month duration of the process the company decided to retain me in their marketing department. Even though, Qantas was facing losses and low performance, and was contemplating downsizing to reduce cost of operation (Massola, Kenny & Aston, 2014), I decided to defer schooling for three years to take up the post. The decision was influenced by the fact that Qantas was a big company and a strong brand that most people would want to identify with. Further, my decision to defer schooling was influenced by my unquenchable passion to work as a marketer in the big department. However, the worst came after six months after the company had against register loses at the first half on the 2013 financial (Massola, Kenny & Aston, 2014). Together with others, the company informed me of their intention to cut jobs for junior officers in marketing and other departments. The letter took effect after three month and found myself jobless. With the semester in the middle, I could not rejoin campus in the same year. Similarly, I another challenge would convince the university registrar to accept me back before three years as I had stated in the deferment letter. The Blame was all on me because I decided to join the organization which had started laying-off some of its employees. 2.0 Decisions Analysis based on related models, frameworks and theories Massola, Kenny& Aston (2014, p.93) posited that although, it is expected that people make the good decision, individual still find themselves making the wrong decision based on the circumstances. Various theories, framework and models have been devised to analyze the circumstances upon which people make decisions. The theories that have been suggested for analyze decision making include heuristics and biases, expected utility theory, prospect theory, personality & value, perceptual biases and attribution theory among others. Some of the models and framework which have accompanied these theories in analyzing decision making consist of bounded ethicality, ethical frameworks and Hoffstede’s framework among others. However this paper will analyze the decision focused based on three perspectives including heuristics and biases, rationality and bounded rationality, and ethical frameworks (utilitarianism). From the case in point, it is clear that I used heuristics to make a decision to look for an internship and finally defer schooling for a marketing job. According to Gigerenzer & Gaissmaier (2010, p.453) heuristics are defined as easy and effective rules that individuals normally apply to create judgments and finally make decisions. The psychologists refer them as mental shortcuts which often involve concentrating on one factor of the intricate problem whilst disregarding others. Such rules work efficiently in most situations, but can result to logical deviations from the rational choice, logic and probability (Shah & Oppenheimer, 2008, p.208). The event leading to short employment at Qantas can be looked at the perspective of shortcut in that I wanted to get a job before completing school. The speed by which I made a decision to defer learning can simply be put that I was looking for short to getting an income they become comfortable than some of my campus friends. The decision ignore that fact that the company had reported loses and had started considering lay-off some employees and I may not last longer in the workplace. The fact is the job only lasted for six month before I was laid off. Hilbig & Pohl (2008, p.396) stated that the outcome errors are normally referred to as ‘cognitive biases’. Heuristics normally control intuitive ad automatic judgments but is also employed as purposeful mental approaches until it fails. In their research, Tversky and Kahneman held that there are four heuristics which control human decision-making including availability heuristic, representativeness heuristic, confirmation, heuristic and effect heuristic (West, Toplak, & Stanovich, 2008, p.933). the availability heuristic is the level of ease by which an individual can bring a certain idea into the mind. While bring one idea into the mind and get carried away, one ignores other factors too. For instance an idea was brought into mind that once I am employed, and working with a bid company, I would be earning the large salary and stable economically. On the other hand, I ignored the fact that Qantas was downsizing and I could one of the employees would be laid-off. Gigerenzer & Gaissmaier (2010, p.454) opined that the representativeness form of the heuristic is where people apply categories and features of phenomena to make decision or judgment. For instance, I used decided to take up the job and postpone schooling due to the attributes and importance of a job. Normally, people liken a job with prosperity and economic stability. The school also has almost similar attributes only it is seen as a long process. There is a high probability that when a person depends on representativeness heuristics to make decisions, they will wrongly judge a situation since a more representative an element or factor does not imply it is the same with your judgment (Shah & Oppenheimer, 2008, p.13). Another model which can be used to analyze the process of decision making is the rationality. According to Hastie & Dawes (2009) rationality is defined as the state or quality of being sensible, having reasons or facts when making a decision. Recognizing rational decision optimality needs a quantifiable creation of a problem, and creating numerous major hypotheses. In seeking employment, there are always hypothesis that it will uplift your social status among your peers (Goodwin & Wright, 2009). Similarly, working at a bigger company like Qantas uplifts ones’ dignity in the society. Of course, there is also an assumption that schooling delays an opportunities because it takes a long time to complete and get employed. Some of the few assumption of a rational decision is that a well-defined objective must be realized, clear preference, no cost constraints and the final decision will increase economic benefits (Hastie & Dawes, 2009). The assumption reflects why I chose to take up the job and defer my course. For example, my well-defined goal when making the decision was to get income from the employment. In addition, job acted as clear preference to school. For rational decision to be made there must be information either incomplete or even complete. However, sometimes human make decision based on the bounded rationality. Using Simon’s model, the researcher argued that bounded rationality implies that when a person makes a certain decision, their rationality is usually controlled by the environmental and the individual forces, comprising of human minds, time pressures, uncertainty and technicalities of the problem (Tsang, 2008, p,.64). In this process people tend to choose first alternative which they think satisfy their need. For instance, in accepting the job, I did not enquire much to understand that lay-off might even affect the new employees; therefore I settled for what I thought would provide the maximum satisfaction. Decision of the fairness might have thoughtful propositions for economic and social systems (Singer, 2011). People think that outcomes are fair only if it comes with satisfaction, and will support the outcome and elements involved. Such people use utilitarianism perspective to make decisions. Bredeson (2011) argued that in this perspective, experts claimed that the most enjoyable life is that one which creates the less distress and pain, but maximizes happiness. In making decision to postpone schooling, I had in mind that school creates pain because one pays to learn. Further in school, several assignments and projects are given out in which one is assessed. On the other hand, work provides maximum pleasure since the company pays for the tasks performed. 3.0 Critical assessment of the decision’s strengths and weaknesses As stated earlier, every decision made often has either positive or negative bearing of the decision maker or parties involved. Therefore, my decision also took the same perspective. Strength of my decision is that suppose there were no lay-offs, I was going to get opportunity to pursue my career based on real world practical as oppose to theory. Similarly, I would have earned salary and improve my economic stability. The situation is manifestation that heuristics assist in envisage one’s values in the judgmental operations (Gigerenzer & Gaissmaier, 2010, p.461). In addition, successful decision made using heuristics is a demonstration that the framework can be used to increase the effective of decision. Tsang (2008) claimed that this is because it needs less information, limited time and less multifaceted computation to generate information. In current business platform, change takes place rapidly and managers are required to make quick decision to reduce chances of being overtaken by events. It is at this point that heuristics frame of decisions is needed by the contemporary to gain competitive advantage. In discussing the strength of rationality the (West, Toplak & Stanovich, 2008, p.935) claimed that individuals depend on the shortcuts (heuristics) to make efficient decisions owing to limited information, cognitive limitations and lack of better alternatives. Shah & Oppenheimer (2008, p.217) also contended that environmental and cognitive factors assist in accurate application of heuristics in the process of decision making. However, the failure in my decision making is an indication of weaknesses of models, theories and frameworks in used in decision making. After just six months I was laid-off and at the same time I had differed schooling for three years. After one year I had to convince the university registrar to accept me back. The failure of the decision is sign that heuristics can sometimes lead to biases. Also, representativeness heuristic which is a source stereotype assigns attributes on phenomena which might not actually be true (Tsang, 2008). Affirmed that rationality is a decision based on several assumptions and one sided therefore may not be true in an organization with many people. An example can derived from my decision to postpone and accept a job at Qantas which did not materialize in the long run. In making the decision, I considered several assumptions which I put forward as rational yet not the best. On the other hand, utilitarianism has its strengths and weaknesses. Singer (2011) noted that utilitarianism is advantageous because it help an individual increase his pleasure that comes with life. However, it ignores other parties involved in the decision. The decision made on this perspective support justice the person directly involved in the decision yet it denies others the same justice. In nutshell, this framework is self-centered. 4.0 Recommendations The decision making during uncertainty is a topic that has been researched for many years. certainly, many people including economists, classical philosophers, finance experts, psychologists, gamblers and I have looked for how best to use the framework, theories and model in order to optimize options and make sound decisions in making judgments (Jullisson, Karlsson & Garling, 2005, p,574). However, several recommendations have been made by various management and policy experts on how to improve decision making. Some of the issues to be put into consideration include; 4.1 Need for information Change taking place and ambition to succeed are some of the factors that speed up decision-making. Goodwin & Wright (2009) Stated that even though, people must move with speed in changing the world, authenticity of the information at hand is important because it is what will determine the success of the decision-making. For instance, if I had verified information that Qantas was laying-off its employees I would have not deferred schooling to take up at the company. Information is not only needed in marketing decision based on Heuristic framework, but it is also required in rationality. Rationality is defined as being sensible when making decision. In making decision, being reasonable also mean being informed of the issues and factors which might affect the decisions (Hastie & Dawes, 2009). Rationality model takes four stages in making decision including problem formulation, criteria identification for making decision, recognizing alternatives, analysis performance and final decision. All these process needs information about the several choice available in making informed decision. 4.2 Involvement Involvement is critical in making informed decision in many ways. Dietrich (2010) claimed that just like a group setting, involvement bring in place many ideas or alternation upon which the decision maker can pick one. It is the short-cut of using Heuristics that made me select a job rather than continue with my studies. Similar to Heuristics, rationality and utilitarianism are self-centered frameworks which majorly reject involvement. This is because rationality believes that once a person feels sensible, the decision is satisfactory (Hastie & Dawes, 2009). As much as one would be reasonable with his perspective, it may not be the best hence leading to failure. 4.3 Combination of different theories and models The theories and models analyzed in the paper hold some strengths and weakness. Their strengths and weaknesses are unique in nature and combining would complement each others’ strengths so as to make an effective decision. 5.0 References Bredeson, D. (2011). Utilitarianism vs. Deontological Ethics. Applied Business Ethics: A Skills-Based Approach. Cengage Learning. Dietrich, C. (2010). Decision Making: Factors that Influence Decision Making, Heuristics Used, and Decision Outcomes. Student Pulse, 2(2), 23-34. Goodwin, P., & Wright, G. (2009). Decision Analysis for Management Judgment. John Wiley & Sons Ltd. Gigerenzer G., & Gaissmaier W (2010). Heuristic decision making. Ann. Rev. Psychol., 6(2), 451–482. Hastie, R., & Dawes, R.M. (2009). Rational Choice in an Uncertain World: The Psychology of Judgment and Decision Making. SAGE. Hilbig, B.E., & Pohl, R.F. (2008). Recognition users of the recognition heuristic. Experimental Psychology, 55(6), 394-401. Jullisson, E.A., Karlsson, N., & Garling, T. (2005). Weighing the past and the future in decision making. European Journal of Cognitive Psychology, 17(4), 561-575. Krantz, D.H., & Kunreuther, H.C. (2007). Goals and plans in decision making. Judgment and Decision Making, 2(3), 137-168. Massola, J, Kenny, M., & Aston, H. (2014). High costs and wages key to Qantas' problems, says Deputy PM Warren Truss. Retrieved on 29th April 2015 from http://www.smh.com.au/federal-politics/political-news/high-costs-and-wages-key-to-qantas-problems-says-deputy-pm-warren-truss-20140227-33jlw.html Shah, A.K., & Oppenheimer, D.M. (2008).Heuristics made easy: An effort-reduction framework. Psychological Bulletin, 134(2), 207-222. Singer, P. (2011). Practical Ethics, 3rd ed. Cambridge University Press. Tsang, E.P.K. (2008). Computational intelligence determines effective rationality. International Journal on Automation and Control 5 (1), 63–6. West, R.F., Toplak, M.E., & Stanovich, K.E. (2008). Heuristics and biases as measures of critical thinking: Associations with cognitive ability and thinking dispositions. Journal of Educational Psychology, 100(4), 930-941. Yudkowsky, E. (2008). Cognitive biases potentially affecting judgment of global risk. in Bostrom, Nick; Ćirković, Milan M., Global catastrophic risks. Oxford University Press, 91–129. Read More