Power, Authority, and Decision-Making - Research Paper Example

Power, Authority, and Decision-Making Decision making and problem solving in Organizational contexts Effective decision-making is the principal predictor of successful performance in organizations. The past years were marked by the growing importance of the complex decision-making frameworks in small and large organizations. Thousands of entrepreneurs adopted novice approaches to making organizational decisions. In the meantime, the movement to decentralized decision-making became the distinctive feature of the postmodern organizational structure. Despite these developments and the growing scholarly attention toward the problem, the process of taking organizational decisions is associated with numerous difficulties. The choice of the decision-making parties, the process of framing the problem and, more importantly, identifying and choosing the best alternative remain a serious issue, which not all organizations can successfully resolve. Even if certain decision-making models work and support organizations in their striving to make the best decision, effective decision-making is possible only on a case-to-case basis. Put simply, organizations and decision-making parties must consider each problem separately, in regard to its context, the anticipated outcomes, and possible barriers to implementing the final decision. Decision analysis Decision making in our organization has been a crucial issue for the last five years. Our organization provides customers with superior quality of financial consultation services. However, in 2009, the amount of the consultation services rapidly decreased and customers started to look for other similar companies elsewhere. In order to make a decision and to work out new strategies, managers of the company put their efforts together and started to develop new strategic decision directed on satisfaction of their clients’ needs. First of all, we focused our attention on strategic evaluation and planning (Winthorp). The primary goals of the planning were referred to the overall strategic goals of the organization. Thus our organization made an emphasis on front-line efforts. We decided to shift accents of our organization from financial issues to a person-centered approach. An individual/client became in the centre of our organizational concern. Consequently, organizational attitudes to clients resulted in a different attitude to employees. We decided to unify our company at all levels. Thus the process of decision making in our organization was in terms of organizational change management involving “the implications that a change in one input can have on the corresponding output” (Winthorp). A chosen strategy of decision making is relevant in terms of an intense competitive market of financial consulting. A core aspect of the chosen decision making is flexibility. This can be explained in the following manner: once an organization makes a decision to change organizational strategies, these changes should be projected on every individual working in the organization or a customer. In such a way, it will be easier to see how changes exert influence on cognitive level of human consciousness. Furthermore, once a direction on strategic changes was chosen, performance should be improved. Change management in the decision making is an important current tendency in decision making. Rational model Rational model of decision making implies development of “logically sound decisions”. There are six basic steps of decision making process in a rational model: to define a problem to be solved; to make an outline of possible solutions; to develop criteria of evaluation principles; to choose the most relevant solution; to practically implement the chosen alternative and to discuss the results of the made decision (Robbins, 2007). In accordance with rational model, decision making is a consequential chain of logic interpretations of a given problem. In our case, we acted in the following manner: The problem: to change strategic organizational decision making, shifting accents from direct provision of financial services to a person-center approach to the customers. Possible solutions: to reach customer’s satisfaction; to measure customer satisfaction on a regular basis (Voigt 2010). Criteria evaluation principles: data collected from customers concerning the services provided by our organization; A choice of the most relevant solution: to provide online consultation services, because the main complaint of customers concerned their desire to get convenient and quick services. Practical implementation of the chosen alternative: (a) customers were offered a new level of convenience through the development of online consultation services; and (b) IT systems and automated solutions were integrated with the relevant models of service delivery. Thus in order to get over difficulties of the modern businesses, which are “often equipped and should use IT programs within the customer service context” (Voigt 2010), our organization followed rational model of decision making and didn’t lose a substantial portion of our customers. In such a way we could restore the loyalty and commitment of our customers and enhance the quality and efficiency of our business operations. Decision support technologies/ systems Consumers and IT professionals grew to become essential decision-making parties, after the technological dimension of the problem was identified. IT professionals had to analyze the organization’s IT service potential and provide managers with the information needed to evaluate the effectiveness of the proposed IT solutions. Given the seriousness and complexity of the customer satisfaction issue, taking the best decision would have been impossible without engaging IT specialists in the decision-making process. The current research about the effectiveness and implementation of the IT models in service industry is rather scarce (Gerow & Miller, 2010), IT specialists did not have much theoretical information to assist them in their decisions. Nevertheless our specialists put all their efforts together and appealed to DSS technologies or Decision Support Systems. In previous years, DSS technologies could assist and facilitate individual decision making, but currently DSS technologies are being applied to group decision making. In such a way, our professionals had an access to efficient decision support tools, such as collections of data relevant to our problem, Web-based DSS and other functions (Shimp, Warkentin, 2002). Moreover, we clearly understood the fact that any decision to adopt innovations in organizations is influenced by the organization’s attitude toward such innovations and the subjective norms in regard to technological innovation in business (Sadeghi & Hanzaee 2010). Thus, our organization had to turn its head toward the organizations that have been successful in implementing online service technologies and change its attitudes to become technologically open, innovative, and advanced. Bounded rationality, NDM framework and final satisfying Bounded rationality is an integrative concept of decision making. In accordance with the claim, rational decision making may be hampered because of limited information availability, cognitive minds constraints of decision makers and time limits (James, 1994). Naturalistic decision making complements analyzes of decision making process. NDM framework is focused on individuals’ performances under “oppressing” conditions such as time limit, ambiguous contexts, vague goals etc (Klein et al, 1993). With regard to these factors, the process of decision making was not easy. The first limitation in terms of these two approaches concerns a lack of required information. Under these conditions, our organization had the following problems: in order to make technological solutions and define their effects on the organizational performance, it was necessary to appeal to multidisciplinary approaches and rich contextual conceptualizations (Beers et al 2006). Put simply, resolving the issue of technological service provision is impossible, unless organizations realize its multidimensionality and can engage numerous decision-makers in the decision-making processes. The second limitation concerns cognitive mind constraints. At this point our organization dealt with the following problem: in modern organizations, which are characterized by complex hierarchies and well-developed systems of power distribution, the process of negotiating is rather complicated. For example, power and authority of our organization failed to realize the importance of multidimensionality and multidisciplinary approaches to decision-making and didn’t let all decision-making parties enter the process of taking the final decision. The third limitation concerns time constraints. Our organization professionals put all their efforts in order to reach the most successful decision. It was necessary to gather in groups or to think about the relevant decision during free time, but these steps were not forced. We made up our minds and invented innovative approaches and voluntarily, because every participant felt a great commitment to the organization. Fortunately, the implementation of the online service provision by the organization raised customer satisfaction. Corporate customers were among the first to benefit from the implementation of the proposed decision, and many of them welcomed the integration of technologies with the customer service options. It would be fair to say that the process of making decisions and its outcomes raised employee commitment, trust in employee teams, improved collaboration and the efficiency of the group decision processes, and linked the decision to organizational and individual learning within the organization. Improved participation and trust witnessed satisfying decision-making players. Actually, organizations are fairly regarded as a complex decision-making organism, in which satisfaction of the separate decision-making players predetermines the effectiveness of the ultimate decisions (Driscoll, 1977). However, it is not enough to promote employee participation in the organizational decision-making processes, but it is important how employees themselves perceive such kind of participation, and whether they consider their participation relevant and sufficient. The congruence between perceived and desired participation played a great role in decision-makers satisfaction in cross-functional teams. Decision-making in organizations: problems of social choice A problem of social choice in the paradigm of decision making means the following: it refers to the way of power dynamics in the process of taking organizational decisions. Authorities of the organization choose decision-making players. In order to eliminate contradictions and possible conflicts, reward power can be involved. This kind of power implies that individuals influence each other’s behaviors by means of rewards (Drummond 2002). Coercive power means that individuals apply to punishment to restrict undesirable decision-making behaviors (Drummond 2002). Legitimate power is associated with the manager’s ability and legitimate right to influence subordinates, whereas expert power is about individual abilities to influence each others’ behaviors through recognized knowledge, skills, and talents (Drummond 2002). Our organization, due to the presence of strict organizational hierarchies and power distribution systems, always had its power relationships well-organized. However, when more customers chose other service providers and expressed their dissatisfaction with the quality of the service provision, traditional principles of power dynamics and distribution had to be reconsidered. It was necessary to change a system of decision-making for sure. Our senior management involved so-called power model of change (Boonstra & Gravenhorst 1998). The latter means that senior management, as the legitimate source of power within the organization, declares the need for an organizational change and, simultaneously, excludes the probability of one-sided realization of management interests and preferences (Boonstra & Gravenhorst 1998). In such a way employees as the sources of the principal decision-making power were chosen by senior management. Actually, that so many different employees were included in the process of taking the organizational decision predetermined their ability to take into account diverse interests and viewpoints. Customer service representatives defended the interests of customers. IT professionals took decisions within the scope of their professional practice and tried to define the best technological solution. Managers of financial departments worked to define and enhance the cost-effectiveness of the proposed solutions. Consequentially, it was evident that hierarchical or social status of any decision-making process’ participant didn’t matter. The main attention was paid to the fact that the team of professionals and customers was able to make a decision that reflected all interests – those of the customers, employees, and the organization itself. Therefore legitimate power of the senior management and the pressure which senior management created pushed the team toward taking the best decision. The seriousness of the customer dissatisfaction required that all interests be accounted for. Decision making in complex, uncertain and ambiguous contexts Decision making involves embedding the events in an organizational context, which gives them further direction (Beach & Connolly 2005). Events are never isolated from each other, nor can they be totally isolated from the context. The knowledge of the organizational specifics, prior experiences, and related information create a context that helps to re-interpret the event in a proper way (Beach & Connolly 2005). In the discussed case, customer complaints and the lack of the technological dimension in the customer service created a context, in which IT professionals, managers, and customer service representatives finally arrived to a single definition of the principal issue. However, the identification of the issue alone could not have been sufficient to let all decision-making parties take the best and the most relevant decision. Based on the visual and narrative information, as well as the context in which the organization had been operating during the several years preceding the conflict, decision-making participants and parties could not but frame their vision of the issue and decision in that particular way. It should be noted, that some of the customer service representatives had already raised their concern in regard to the lack of the technological dimension. The issue of developing and implementing online systems of service delivery had been previously discussed but was never given enough attention. Those mental models and concerns further affected how customer service representatives interpreted the problem. To a large extent, they welcomed the identification of the problem and its framing, and could hope that the decision. Thus our organization operated in the context of decentralized decision-making, and the effects of the power structures (i.e. senior management). Throughout its history, the organization promoted and encouraged the decision-making openness and fostered collaboration and cooperation in the most problematic issues. From the very beginning of the problem, its multidimensionality was more than obvious. As more players were entering the decision-making process, the senior management gradually realized the significance of a multidisciplinary approach to problem solving. Though a context of decision making was complex and ambiguous because of involvement of IT professionals, customer service representatives, and middle managers, the problem was clearly understood at all levels. The process of negotiation took place in a complex context, but there were no conflicts. The written documents helped to best direction of negotiation. The senior management, as the source of power and authority in organization, expressed their commitment and trust to the company employees who were participating in the decision-making process. Senior managers articulated their willingness to accept the employees’ interpretation and meaning of the problem without challenging it. On the one hand, they imposed additional responsibility on the decision-making stakeholders and raised their commitment to identify and find the best decision, but on the other hand they complicated the process of decision making. Nevertheless, the organization operated in the atmosphere of agreement and productive cooperation between various organization departments. The freedom which they were given in the process of negotiating, the common understanding of the problem, did not impede but, on the contrary, facilitated embedding the facts into the organizational context. Such freedom also created conditions needed to take into account the diverse interests of various stakeholders, including customers, IT professionals, and customer service representatives. Group link and group shift The interested parties and individuals emerged, while the organization was trying to identify the issue. At the initial stage of problem identification and analysis, the interested parties included consumers, customer service representatives, economists and financial advisors, and managers of several consultation departments. Given that the core of the problem was in the growing number of customer complaints, customer service representatives became the primary objects of the company quality analysis. Customer service representatives exemplified a group link. In other words they focused their attention on a diverse array of factors, among which cultural consideration are, probably, the most important. Ideological and strategic goals were clearly defined in this group and their participation in decision making process was more efficient than that of other decision making players. This group was engaged in the detailed analysis of the cultural and multicultural issues that could have influenced customer satisfaction and, consequentially, profits and revenues. Moreover, group link can be witnessed by congruence between perceived and desired participation. In the process of making the decision and choosing the best alternative, none of the employees expressed any sign of negativity in regard to his (her) role in the decision-making process. The openness and readiness to cooperate were the distinctive features of the team, which worked to find the final decision. Other professionals were focused on the analysis of how consumers interpret the quality of customer service (Bleuel & Vardiabasis 2009). They failed to define such problems and the organization further switched to other perspectives of decision-making. Such kind of segregation witnesses a group shift, a phenomenon in which decision-making players rushed into global and extreme considerations. Finally, the participation of diverse employees in the decision-making process raised their commitment to the organizational goals and values. Normative commitment in the organization significantly improved. Normative commitment entails employees’ obligation to stay with the organization, and its potential antecedents include commitment of coworkers, dependability on the organization, and participatory management (Muthuveloo et al 2005). Apparently, it was due to the opportunity to participate in the decision-making process and the senior managers’ willingness to accept their negotiated understanding of the problem that employees grew more committed to the organizational goals and experienced satisfaction with the decision-making outcomes. These decision-making outcomes led to a series of the subsequent decisions, which improved organizational atmosphere and, simultaneously, increased customer satisfaction with the quality of services. Subsequent decisions The success of technology integration with the customer service led the organization to reconsider the IT and related technological principles in other organization departments. Improved customer satisfaction and the growing number of corporate consumers implied that technology could be the principal factor of improved performance within the organization. That was one of the basic reasons the organization chose to implement effective technological frameworks at all levels of its performance and structure. That the use of cross-functional team decision-making raised employee satisfaction and commitment implied that collaborative approaches could benefit the quality of decision-making in organization. Most probably, the success of the first decision created conditions that favored the development of other, similar collaborative approaches to other organizational decisions. During the three months following the decision, such teams also worked to improve technological systems in the accounting department and were able to reduce the organization’s technology expenses and costs. In light of these results, the organization may turn cross-functional teams into the core element of all decision-making processes in the future. Finally, the quality of the organization’s performance significantly increased. Here, several explanations are possible. First, collaborative decision-making improved employee commitment to organizational goals. The current research links employee commitment to improved performance in organizations (Muthuvelloo et al 2005). Second, the technological systems which the team of decision-makers chose to implement made related decision-making processes, including customer service, more efficient and cost-effective. Third, the participation of employees in collaborative decision-making, their openness and creativity opened the gateway to developing innovative organizational vision which, consequentially, transformed the most important organizational processes and made the whole organization more effective. Organizing Power, Authority and decision making The concepts of power, authority, collaboration, cooperation, and negotiation are the most relevant to the discussed case. It is interesting to note, that the case of the technological decision-making change in this organization reflected the profound shifts in the distribution of power in the organizational environments. It is difficult not to agree to Bolman and Deal (2003) in that any organizational coalition forms whenever members have common interests and believe that they can accomplish more together than when they apart. However, to accomplish their goals successfully, decision-making teams need power. In the discussed organization, the balance of power shifted from senior management to the collaborative team, which worked to evaluate available alternatives and choose the best decision. Simultaneously, in no way did the power of the decision-making group reduce the legitimate authority of senior management. On the contrary, it re-affirmed the relevance and effectiveness of legitimate power in collaborative organizational environments. In this case, senior management used their legitimate power to give the team more decision-making freedom and let them take the best and most efficient decision. Simultaneously, the processes that took place within the boundaries of decision-making in regard to technological improvements in the customer service matched the criteria and definitions of the so-called recognitional decision-making model. This model contrasts to the classical decision-making models, which underlines the relevance of the legitimate power in decision-making (Betsch & Haberstroh 2005). Currently, collaboration and creativity in an organization predetermine the success of all organizational decisions. Senior managers would use their legitimate power to provide team members with freedom of creativity and choice. The integration of multiple decision-making perspective and negotiation of the problem understanding would rule the decision-making process. However, the direct participation of senior managers in the decision-making process could speed up taking the best decision. Senior managers possess knowledge and experience and can access resources which employees cannot use, due to their position within the organization. Senior managers must be more active in their striving to enhance the quality of the decision-making processes in their organizations. In this way, they will boost commitment and collaboration at all levels of their organizations’ performance and will be able to monitor the decision-making progress directly. Enhancing Decision-Making Decision making in our organization was enhanced by implementation of direct plans and designs. We clearly defined the following elements: problem identification; individual and group decision-making skills’ evaluation; definition of a degree of stakeholders’ involvement in the process of decision making; information availability of decision-making process; a choice of relevant decision-making strategies; efficient involvement of organization professionals in the decision-making process. In such a way we managed to organize a collaborative work with clients, involve organization professionals of different levels; evaluate efficient collaboration with clients and organization professionals; develop an individualistic and group decision-making approaches through creation of numerous diverse decision-making workshops (Clark, Amundson, Cardy, 2002). Consequently, our organization reached successful process of decision-making having improved its previously used services. Thus we managed not to lose our grounds, but to become a strong competitor in the arena of financial services. Decision making in the learning and knowing organization Effective decision-making is the principal predictor of successful performance in organizations. The choice of the decision-making parties, the process of framing the problem and, more importantly, identifying and choosing the best alternative remain a serious issue, which not all organizations can successfully resolve. The discussed case shows that collaboration, cooperation, and cross-functional approach to decision-making in organizations serve effective drivers of improved performance. Moreover, the decisions which cross-functional decision-making teams take, further work to enhance organizational performance and predetermine subsequent organizational decisions. Simultaneously, senior managers must be more active in the use of their legitimate power and participate in organizational decision-making more actively. Such participation will open the way to accessing and using knowledge and learning resources, which employee members of the decision-making teams, due to their organizational position, cannot access. Conclusion The outcomes of the decision to develop and implement a system of the online service provision were even better than the company expected. However, many decision-making outcomes went beyond conventional customer satisfaction and revenue indicators. A cooperation of IT professionals, customer service representatives, financial managers, and even customers resulted in the so-called cross-functional team, which linked various functions, professions, and visions in a complex network of decisions, meanings and attitudes (Clark, Amundson & Cardy 2002). Therefore our organization succeeded because of valuable learning in cross-functional teams, power and authority involvement in the process of decision-making. References Beach, LR & Connolly, T 2005, The psychology of decision making: People in organizations, SAGE. Beers, PJ, Boshuizen, HP, Kirschner, PA & Gijselaers, WH 2006, ‘Common ground, complex problems and decision making’, Group Decision and Negotiation, pp. 1-28. Betsch, T & Haberstroh, S 2005, The routines of decision-making, Routledge. 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