Proact Model in Business Decision-Making - Essay Example

Application of the PrOACT model in Business Decision Making ID Application of the PrOACT model in Business Decision Making Introduction The decisions made in any business prove the organization of the company and the nature of their business growth. In many companies, decision-making is sometimes made amidst limited information that may not provide enough for the decisions to be made. All in all the managers have to make decisions no matter how little they know about the situation or how young they are at management. Decision-making requires a critical analysis of the risks that the company stands in these situations, the consequences of the decision to the performance of the company, the employee morale, supplier reactions and the customers. Decisions that may affect these groups of people will affect the entire business leading to poor performance occasioned by the employees, the customers and the suppliers. It is therefore a very vital role to control the effects that each decision made in a company has on these sets of people and ensure that they are considered well in all decisions to avoid causing them reactions that would affect their engagement in the business. In quest to simplify decision making in any organizational setting, a number of business models have come to life to aid the decision-making arms of the organization in evaluating the decisions as a way of ensuring the decisions affect the company positively. These models may not necessarily provide a positive approach but base on the application to result into positive results for the company. Considering the assignment at hand, the company is faced with a dilemma related to take over aspects of a company’s management with a family business aiming at engaging their daughter Joan into the business. The experience that Joan has is not sufficient to run all activities in the company and is therefore faced by a number of challenges in relation to making the decisions in the business. The major decision she has to make is with regard to her father who is viewed as an extrovert that has good management skills though considered difficult by many employees on lower cadres but considered a good manger by his senior colleagues. The assignment aims at applying the PrOACT model in helping Joan make the decision with regard to her father’s position in the company. The PrOACT model provides a well-designed systematic approach to the decisions in a company. The decision model as developed by John S. Hammond, Keeney and Raiffa has worked to provide guidance to the different management positions as a guide to decision making as per their book smart choices. The PrOACT model is developed on the following, Problem, Objectives, Alternatives, Consequences and Trade-offs. These elements provide clarity on a number of aspects involved in decision making that range from Uncertainty, Risk Tolerance and Linked Decisions (Project management skills, 2010). Considering the case at hand, the model will apply based on the different aspects that Joan faces. Joan faces a myriad of aspects to consider in solving the company’s problems. These range from decisions on improving the sales of the company, reducing costs and improving the profit margins of the business. The decision also involves the position to hold his father at who wants a position that will make him less active but still play a role in handling the company affairs. The father has worked for the company for long and bringing the change element may affect the employees in one way or another. Changes come with different rules and different methods of approaching situations. Change brings in new rules and regulations that the employees will need to understand and interpret. The following application of the model works for Joan. Identification of the problem According to the decision model, the first step to ensuring that the problem in a company is solved is to ensure that one is focusing on the right problem. The risk that the company stands is to focus on the wrong problem and have the problems persist even after investing much into developing and enforcing solutions. Risk analysis helps one identify these and avoid psychological traps that may try to divert the mind leading one to focusing on the wrong problem. According to the case, the major problem is the aspect of returns to the company. The case of the father will attach to Joan’s imagination and create the psychological traps that will affect her productivity in the company. The problem pertains to the performance of the company and not the father’s position in it. Joan needs to concentrate on the problem to create positive consequences for the company and avoid failure based on poor problem identification. Objectives The second aspect that Joan needs to consider is the objective of the whole scenario. The objectives will create the aspect of goal that Joan needs to identify. What goals will result from the best solutions to the company? As the company’s head, the position tasks the holder with the responsibility of ensuring that all goals set are achieved and the objectives developed achieved in all possible means. The questions on objectives will include, the problem solved, the goals achieved and the criteria to use in solving the problem (Four corners management services, 2009). The objectives also consider the end goals that result and the need to control the different activities to ensure the goals are achieved. Based on these, the objectives for Joan should aim at improving the performance of the company through encouraging growth. The company needs to grow and reach its objectives. Setting goals in growth will enable Joan lead the company forward. Considering these will give the company a sense of direction that will ensure t=each objective is achieved and the company grows as expected at the expected rate yielding within the expected margin. These will register success for Joan’s efforts. Alternative course of action Developing an alternative incase the first strategy fails to work is another major aspect included in the decision model. Avoiding the considerations of only two options exits will enable one approach the problem with an open mind hence creating many chances and possibilities of succeeding in solving the problem. Application of brainstorming within the company and other alternatives for generating ideas will help obtain many objectives and course of actions that may help the company have alternative course of action in case the first course fails to yield as expected. The development of an alternative course of action creates the possibility of better results and ensures that the objectives are met at all costs. Application of a number of theories in decision making on alternatives provides a positive approach. These include aspects of rationality that may affect the way people consider the decisions, satisfying that involves the selection of options that engage the minimum most standards, payoff matrix that brings in the probability aspect into selection of objectives and the weighted averages that have the different alternatives developed assigned a numerical value for proper evaluation. Through these, the risk of focusing on the wrong alternative is eliminated and the consequences that result chances provide higher that they will prove positive. Consequences The consequences to expect in the different alternatives require considering before making the decision on eh alternative to take. These will reveal both the positive and negative consequences that the company stands to face in each course of action. Understanding these will enable an evaluation of the costs of each alternative in case it fails to deliver. Considering these provides the company with the necessary approach to choosing an alternative based on a cost effective means of evaluation that reveals the loss that the company stands to suffer if a wrong alternative is chosen. The company needs to focus on the alternatives even the null alternative for it could provide more information on the right alternative to consider. Considering these will guide Joan into better alternative selection that will ensure success in her decision-making aspects. Considering the risks involved in the decision-making process and the consequences that the company stands to suffer in case of a failure in the decision taken, there is need for critical consideration of all alternatives before deciding on which alternative to take. Trade-offs The collision between decisions and the criteria to use in many solution development aspects creates the need to make a decision on a trade-off. This will picture the option that the company will need to ensure that progress is registered. Lessing one outcome for maximization of another may work to provide the company with better alternatives to take. Considering the difference between the decisions to make and the criteria to use, the company trade-off weighed with the objectives that the company has set in place will guide Joan in making the right decision with regard to the options developed as solutions to the problem facing the company. Considering these will rather provide the company with better options than those that would mislead the company management. The job that Joan is tasked with as the head of the company in this scenario is to ensure that the right decisions yield from her evaluations based on this model and these if applied in the right manner will help solve the problem at hand enabling the growth that the company has not enjoyed in years. Considering these aspects, one realizes the need to ensure that the three major aspects of uncertainty, risk tolerance and linked decisions provide a positive contribution to decision making once analyzed well. Uncertainty brings in the option of the unexpected events. Joan needs to evaluate and consider all possible uncertainties and creating approaches to solving them. Developing these will provide solutions that Joan can confidently rely on in making decisions. Considering the level of risks involved in any decisions, Joan needs to tolerate the possibility of risks and consider them in advance. Through this, Joan is in position to avoid failure and focus on the success of the initiatives. The last aspect of linked decisions provides for the aspect of decisions made today and their effects to decisions made tomorrow. Considering the possible effects of the decisions that Joan makes today to the decisions that she makes tomorrow will enable the leader encompass the decisions in a more related approach and ensure that each decision made is considered on the possible effects it will have tomorrow. These will help Joan make better decisions and help the company achieve its growth objective. Considering the above, Joan will provide better decisions to the company and ensure more success in growth. With regard to the position the father will take, putting him on an advisory level with regard to management of employees and other related affairs will give the old man a semi-retirement like wished making him continuously contribute to the company less actively. Decision Making Matrix: Criterion A Criterion B Criterion C Criterion D Worth Cost Value Solution 1 Contribution of solutions to criteria Solution worth – solution cost = solution value Solution 2 Solution 3 Criteria Weights References Four corners management services, (2009). The “Smart Choices” Decision Making Model. Retrieved from http://www.jasperwelch.org/how-to-make-smart-decisions.html Project management skills, (2010). PrOACT Decision Making Model. Retrieved from http://www.project-management-skills.com/decision-making-model.html Read More