Critical Review of Decision Making for Managers - Coursework Example

Critical Review of Decision Making for Managers Introduction Many managers depend on their guts and unfounded assumptions, during the making of important decisions related to important company issues, and that leads to poor outcomes. On the other hand, during the cases where the managers of organizations persist in engaging evidence and logic, they arrive at factual and evidence-supported decisions, which benefit their companies. In simpler times, there are three ways, through which evidence-based management can be incorporated into the decision-making processes of an organization (Bazerman and Moore, 2008). These three ways include 1) incorporating data into all decision-making processes, irrespective of how compelling the claims in support of the course could be. 2) All logical processes should be made based on the careful review of the available data, and that helps to expose any faults within the decisions or the plans to be endorsed. 3) Experimentation should be at the centre of all decision-making processes, where any case without evidence to support the choice to be taken is cross-examined (Bazerman and Moore, 2008). For example, this step could be included through allowing the managers of the business to engage in small experiments, with the goal of testing the viability of the available options. The data collected during the experimentation stage can then be used to guide the decision-making process. Through this paper, the author will review the decision making models and processes of Toyota Motors Corporation, relating the issues explored to decision-making theories. Toyota Motor Corporations has remained a dominant player in the vehicle manufacturing industry for the past decades. The company’s ability to penetrate the markets is evident from the fact that it has taken a major share of the American market, despite the patriotic drive slogan “buy American” remaining in force, and many customer groups are proving their allegiance to it. Further, there are underlying accomplishments that can only be revealed through an in-depth analysis of the hidden layers of the business and its operations, which are far more complex than the average customer would believe. Some of the characteristics of the business that demonstrates the exceptional decision-making ability of its spearheading team include its success at the home market of Japan and in America; the company’s entry into the UK market was not easy. Additionally, the company has been able to keep up with contemporary issues, which is evident from its efforts on corporate social responsibility and participation in environmental protection (Toyota Motors Corporation, 2013). Through this paper, the author plans to explore the decision-making models of the company, relating the evidence to the thoughts based on two theoretical models: systems thinking and the group decision-making models of decision making. Despite the success of the Toyota Motors Corporation, the SWOT analysis of the company shows the areas where the company faces the need of employing managerial decision-making to address. The issues that have been subjected to managerial scrutiny ending with decision-making include the weaknesses that resulted from and showed through the recall of many cars, and also the weak presence of the business in emerging markets like China and India (Toyota Motors Corporation, 2013). Other areas that threaten the success of the business, and which the company has had to deal with, include the effects of the constantly changing fuel prices; the establishment of new emission standards and the increasing prices of the raw materials used by the business. Other market trends that have been a threat to the company’s success, which has called for the attention of the company’s management, include the intense competition it is facing in the global market. Still there are the threats related to the natural disasters that affect some of the company’s markets and its production facilities (Japan’s currency). Overview of the theoretical models used in analyzing the decision-making of Toyota Motors Systems thinking model The systems thinking model of decision-making looks at the relationships that exist between the different parts of the organization, rather than looking at the different parts, functions and the departments of the company as distinctive and unrelated parts. The parts of the company that are analysed when using the systems thinking model include the different departments, products, employees or work processes (Phillips and Phillips, 1993). In using this model, the company is seen as an integration of the complete collection of relationships and parts, where processes are considered more important than structures. The company is seen as a whole; as opposed to looking at it as many parts put together (components) to play distinctive roles. Emphasis is channelled towards understanding patterns, as opposed to the case of exploring the contents coming together to make the company (system). Based on the principles of the systems thinking model, the company is a set of relationships. The relationships operate together in a harmonious manner, and that allows them to accomplish more than would be possible, in the case that the different parts worked under the guidance of a random relationship, or without a relationship in place. Group Decision-making model This is the model that is guided by the group norms. This model views that an organization is a set of parts, which combine to form a company. The model maintains that each of the parts/ members of the group will have their needs and views and that all of them need to be taken into account, so that the company can eye a common goal (Phillips and Phillips, 1993). Through incorporating the needs and the opinions of the different members of the company, the decision-making process takes place seamlessly, and that improves the functioning of the entire group. The decision-making process of an organization – according to this model, takes place through seven steps, and the seven steps are also used as a conflict resolution model. The seven steps include 1) pinpointing the decision to be taken, 2) assessing the issues being explored 3) establishing criteria 4) brainstorming to develop potential solutions 5) evaluating the available options and selecting the best of all 6) implementing the chosen solution 7) monitoring and evaluating the results that yield from the process. Critical review of the managerial decision-making of Toyota Motors Corporation, as a reflection of the theoretical models Toyota has used systems thinking to make a revolutionary change in the ways that their design and work are managed at production facilities; the overall goal of the systems thinking model is the improvement of workflow and service delivery (Toyota Motors Corporation, 2013). Systems thinking was used in coming up with the lean tools of production, which were developed through productions setting decision-making (Seddon, 2008). The Toyota team of managers had to start with a question to be solved, like it is emphasized through the group decision-making model, where “pinpointing the decision to be taken” is the first step. The question, in this case, was, “how to produce cars at a rate of demand?” however, unlike its competitors, the variant of the question for Toyota Motors Corporation was, “how to design the production process, in orders to serve the customer’s need for variety?” (Bazerman, Loewenstein and White, 1992). The decision-making process was implemented in a service environment, where the goal of the decision-making process was designing and managing the company and its business, using an outside-in customer emphasis (Seddon, 2008). This approach allowed the company to comprehend what amounts to the value and what can be recorded as waste, through the use of capability measures, which gave the decision-makers the information on the best way to serve the demands of the customer. This outlook is very different from the traditional model of thought, and the process lays the foundation for major innovations in service and product delivery. In the area of culture, the managers of Toyota Motors are involved in critical decision-making, where their models of decision-making can be explained using system thinking and group decision-making model. For example, taking into account that Toyota owns operational facilities in more than one hundred countries, it becomes imperative that the managers administrating its business in foreign nations distance themselves from the background corporate culture of the business. In return, the managers engage the entire work-force, and where necessary go beyond the boundaries of the company, in search for the right cultural blend that will guarantee the success of the business in a given local market (Paul, 1993). When exploring the company’s ability to fit markets globally, which is evident from its penetration of the American and the UK market, it becomes clear that the company is led through collectively deliberate decision-making. Some of the successes of the company, which have guaranteed its success in the global market, include its capitalization on its highly successful brands. For example, the Toyota Corolla is the world’s best selling car, which the company has sold in various body types. Further, the company appears to do the same with its successful hybrid drive train, which was first used with the Prius Sedan (Toyota Motors Corporation, 2013). The company’s success with the lean manufacturing method as well as the incorporation of management-guide models like the “Just-in-Time” (JIT) philosophy; show how much the company has been able to scale the capacity of its managers to keep the least inventory, across its global facilities (Page, 2004). Further, the history of the lean production approach demonstrates a careful heredity between the first adopters of the philosophy in the company, to the next generation of leaders, noting that the managerial tradition can be traced back to the pre-20th and the 20th century, among people like Benjamin Franklin; later, it was used by Henry Ford at his Ford Motors Company (Page, 2004). Further, the different wastage areas covered by the philosophy require the engaging input of almost the entire company and also a continuous communication between the different functions. This is the case, noting that the philosophy spans the areas of transportation, inventory management, motion, waiting, overproduction, over processing, and defects management, which are functions across the production system of the company. Discussion and conclusions The implications and recommendations for decision making at Toyota Motors Corporation The use of systems thinking and the group decision-making model were effectively used by the Toyota Motors Corporation, as it has changed its design and work outlook. For example, through the streamlining of the company’s work and design processes, the company widened the scope of its innovative culture (Parker, 1998). The widened scope of the innovativeness of the culture of the Toyota Company is likely, one factor that has made the company the most innovative in the world. For instance, through the group decision-making and systems thinking, the company has developed models like the Kanban, kaizen, and the Total Quality management systems, which have been at the core of its business success (Toyota Motors Corporation, 2013). The company’s usage of the two models of decision-making played an instrumental role in improving the effectiveness of the company’s business, including that it fostered its adoption and the deployment of the lean tools of production, which is at the core of its profitability. Through the systems of decision-making explored before, the company has also benefited from its innovative product development outlook, which increased its corporate success beyond those of major market players like the “Big Three”. The three main competitors of the Toyota Motors Corporation had dominated the automotive market before Toyota took the stage (Toyota Motors Corporation, 2013). Through the engagement of the managers of the business, in the decision-making processes of the company, the company has developed a wide leadership-base, which allows it the potential to expand into global markets and perform very successfully. Review of decision making practices From the decision making practices of the Toyota Motors Corporation, it became apparent that the management of the company views it like a system. This is evident from the fact that more emphasis has been channelled towards making the business more employee-cantered, capable of delivering on its mission and adaptive to the changes in the business environment (Idson et al., 2004, pp. 159). For example, from the use of the systems thinking model, the company has been instrumental in keeping the business together, irrespective of the economic crises that have hit the global economy in the recent past. Through its emphasis on using group decision-making, the company has been able to respond to the changes in market systems and market outlook, including corporate social responsibility (CSR) and environmental protection. Reference List Bazerman, M.H. and Moore, D., 2008. Judgment in Managerial Decision Making. 7th ed. Hoboken, NJ: John Wiley & Sons, Inc. Idson, L. C., Chugh, D., Bereby-Meyer, Y., Moran, S., Grosskopf, B. and Bazerman, M., 2004. Overcoming focusing failures in competitive environments. Journal of Behavioural Decision Making, 17(3), pp. 159-172. Parker, G., 1998. Teamwork: Action Steps for building powerful teams. Aurora, IL: Successories. American Philosophical Association., 1990. Critical thinking: a statement of expert consensus for purposes of educational assessment and instruction. ERIC document, ED, pp.315–423. Page, J. (2004) Implementing Lean Manufacturing Techniques: Making Your System Lean and Living with it. University Park, IL: Hanser Gardner Publishers. Paul, R., 1993. Critical Thinking: What Every Person Needs in a Rapidly Changing World. Santa Rosa, CA: Foundation for Critical Thinking. Phillips, L.D. and Phillips, M.C., 1993. Facilitated work groups: theory and practice. Journal of the Operational Research Society, 44(6), pp. 533-549. Seddon, J., 2008. Systems Thinking in the Public Sector. New York: Triarchy Press. Toyota Motors Corporation. 2013. Annual Report 2013 – Toyota. [Online]. Available at http://www.toyota-global.com/investors/ir_library/annual/pdf/2013/p42_123.pdf [Accessed on 28 April 2014]. Read More