Judgement and Decision Making - Essay Example

JUDGEMENT AND DECISION MAKING Insert Name Course Institution Instructor Submission Date Decision making within organizations is very crucial towards the sustainability of the internal operations as they impact directly on them. Organizations are established in order to achieve a pre-determined purpose as stipulated by the vision and mission statements. Towards achieving this purpose, the organization’s management has to make a stream of decisions especially towards the optimum allocation of resources. On the other hand, organizations primarily exist as a system comprising of various sub-systems that are inter-dependent. This interdependency arises from the various functions present within the organization that will enable it utilise its resources efficiently. As a result, decision making activities and processes within the organization are complex since their impacts of the various subsystems varies across the organization. In decision making, the management has to consider multiple angles available within the organization. These angles include individual staff members, technological, socio-economic perspectives among others (Linstone 1984, p40). This consideration ensures that none of the organization’s operations is negatively impacted by the reached decision(s). The decision making process varies across organizations depending on the complexity of the decision, its type and formal structure of the organization. This paper aims at analysing crucial strategic decisions made by the Australian government considering the various perspectives, structure of the Australian government and complexity of the issue being addressed. For almost two decades, Australia has enjoyed stable and average economic performance and has maintained a sustainable 3.3 percent economic growth. This has seen an expansion of the economy and an increase in national output as well as employment levels. However, due to the global recession, the nation has been faced with an unprecedented inflation that has seen the prices of products sky rocket making them unaffordable to the lower and middle class citizens. Towards curbing the runaway prices, the government has embarked on giving handouts that aims at improving the accessibility of basic products and services to the Australian citizens. This move by the government will eventually be productive since it will provide consumers with the price shocks thus shielding them from the increasing commodity prices. The government focuses entirely on the consumer since they are an important pillar within the economy. Consumers spur investments through savings that are borrowed by corporations for investment purposes. The Australian government considered the organizational and individual elements of decision making and thus decided to implement the policy. According to Linstone, the consideration of all the elements towards decision making does not certainly mean that the decision has a 100 per cent positive impact (48). This is because no single solution is applicable to all scenarios since their effect is diverse. In this scenario, the method applied by the Australian government in the past to deal with inflation may not be applicable currently because perspectives are by nature dynamic. Firstly, the technical perspective towards this monetary policy decision is embedded on the suitability and applicability of the decision. Decisions can be made hurriedly towards arresting a developing situation and therefore their subsequent execution should be addressed. Linstone (1984) notes that decision making as an important activity and so is its execution (42). For the policy decision by the Australian government to be effective, it has to evaluate its technical capability and decision impact. The government has to quantify the impact of its decision by determining the results of its decision both in the long and short term. Through quantification, the government will be able to assess the suitability of the policy towards containing the situation and evaluating it depending on the economic changes. The availability of the appropriate systems required to protect both the consumers and manufacturers have to be put in place to protect them from the negative impacts. Government handouts will increase the internal demand vis-a-vis the available supply of products. As a result, inflation rates will increase and thus the Australian government needs to identify structures to mop up the extra money available within the economy hence stabilise the prices. From the organizational perspective, the Australian government is composed of different ministries and offices that ensure the delivery of services to the citizens. Policies made by one governmental department have an effect on the other department and thus it is prudent to consider a decision’s impact on other departments. The government as a formal organization comprises of hierarchies that indicate the flow of authority and power within the organization (Parkin 1994, p47). Decision making within the government is bound towards this structure whereby in most cases the government adopts the top-to-down structure. Ministers among other decision makers should liaise with their colleagues and outline the possible impacts of their decisions. The aim from this perspective is to streamline the various departmental objectives towards the proposed decision to ensure that the organization moves on as a single unit (Linstone 1984, p47). The decision by the Australian government was taken by the finance ministry following the advice of the reserve bank in a bid to stabilise the Australian economy. Australia depends on importation for most of its products and thus increased prices will result into a depreciation of the Australian dollar. This in turn will favour the importers who will realise super normal profits to the advantage of the consumers. The prices of products within the economy will escalate and result into an increase in the cost of living. As a result, slowed economic growth will be experienced in tandem with infrastructural development. Inflation is a national problem and it should therefore be tackled from a national scale by consulting with stakeholders within the various economic sectors. This economic scenario impacts on the economy at both the micro and macro levels hence affecting both the individual and organizational entities within the organization. The complexity of this issue is based on the different variables and needs to be considered at both economic levels. For the manufacturers, the cost of production increases and is forwarded to the consumer by charging higher prices. On the other hand, the individual consumer expects the government to control the escalating prices due to the increase in the cost of living. Collaboration between the reserve bank and the government should aim at totally addressing the needs of the micro and macroeconomic levels without necessarily conflicting them. Focusing on one level will prove counter-productive as the other level will neutralise the garnered benefits. This will allow for cohesiveness within the economy and enhance its performance as a unit hence increasing productivity (Linstone 1984, p59). Part Two From Linstone (1984), it can be identified that decision making within an organization is to be undertaken on three levels; technological, organizational and personal. However, Parkin (1994, p419) states that even though these aspects are to be taken into consideration, decision making processes within organizations are not that easy. Conflicts between organizational or individual interests and the decision making processes are bound to arise. Organizations should therefore prepare in advance to ensure that appropriate decisions are reached and right decision making channels used. In making the inflation-curbing decision, the Australian government should establish a forum that constitutes the manufacturers, consumers and monetary institutions that will ensure sufficient participation of the involved parties. This is because each party has their own distinctive interests that they seek to protect. The forum will therefore provide a middle ground that is able to contain the different interests and forge a way forward. Within organizations, decision making is often inherent to positions of power. The authority to make, execute and evaluate decisions is associated with an individual’s position within the organization. For example within an organization that adopts a vertical organizational structure, power flows from top to bottom and so does the ability to make decisions. Bloomfield and Best (1992, p537) outline four types of power namely; technical, symbolic, conceptual and structural types of power. These types of power are exercised on two major bases that are either projects or policies. When all this elements are put together they form a grid that indicates the specific elements involved in the employment of a single type of power. Bloomfield and Best are however quick to note that this grid faces a number of challenges that further impact on the decision making processes within an organization. The inflationary policies contain the four types of powers since they are measures to be undertaken through projects. These projects aim at holding the escalating prices from rising sharply and increasing the cost of living. Given the multiplier effect that inflation has on the economy, it is prudent for the government to consider the symbolic, structural, conceptual and technical types of power. On the other hand, decisions within the organization are triggered by changes within the environment and the willingness of the organization to embrace these changes. Decision making processes are therefore initiated by the management personnel that are in a position of power. In the event that these personnel are adamant towards change, the conflict of interests arises between their individual interests and those of the organization. Power and change agents have the capability to influence the organization’s decision making system. This is because people are always drawn towards change agents and often want to be associated with them (Bloomfield & Best 1992, p538). Organizations are primarily composed of sub-systems that are intertwined in order to ensure the flow of processes within the organization. Decision making processes within the organization should therefore obey this flow of processes to ensure harmonious operations. Translation within decision making is therefore important where it refers to the cohesiveness that exists among internal processes and methods whereby the respective actors act and react towards each other. This results into the establishment of an actor network that involves the identification of two or more players between which a problem lies and the determination of other actors who will be impacted by the subsequent solution (Bloomfield & Best 1992, p541). Decision making within the power model therefore involves identification of the cause and the impact of the solution of a problem existing within the organization. The government has to project the impact of its policies both in the short and long term in order to prepare in advance and mitigate the impact of these policies. In discussing decision making processes within an entity, Parkin 1994 applies the process within the social setting whereby he discusses the various stages involved in the process. These stages commence with problematization and end with a review of the solutions after their implementation. Unlike the other studies, Parkin integrates the society within the decision making process and analyses its impact on the process. According to Parker, problems are directly linked to positions of power within an entity and as a result, problem contexts shift as power shifts within the entity (1994, p423). Therefore in solving our inflation problem, different governments are bound to implement varying solutions depending on the established decision making processes as well as the interests of the involves parties. The author is however quick to note that individual, economic and technical perspectives are not adequate enough towards providing solutions to an existing problem. Societies too have a role to play within the process and they have the capability to determine the effectiveness of the preferred solution to a problem (Parkin 1994, p423). Although decisions are made by powerful entities within an organization, the acceptability of that decision by the society has a direct impact on the employability of the solution towards resolving the problem. The inflation policy formulated by the Australian government seeks to ease the pressure that commodity prices are placing on consumers. The consumers represent the wider society through which the policy targets. They should therefore be involved in the decision making process to ensure that the policy is acceptable within the society and achieves its objectives. Societies therefore should be involved within the decision making process whereby they are recognised as contributors and not mere receivers. Parkin tends to agree with Bloomfield and Best on problem solving, the society and change agents. Decision making processes aim at resolving a problem and ensuring that adequate measures are put in place to ensure that the problem does not re-occur. In deploying these solutions, the most effective solution should be identified. The most effective solution requires the utilisation of minimum resources and thus cost less to the organization. For this effectiveness to be achieved, technologies have to be adopted in implementing the solution. The technology perspective aims at reviewing the suitability of a specific technology towards resolving a problem and its subsequent requirements (Parkin 1994, p205). In implementing a solution, the ability to meet the various demands of the solution should be considered and evaluated. To adopt technological infrastructure towards solving problems, individuals in positions of power should be open minded and keep in touch with emerging technologies within the environment. They therefore act as change agents whom the society is willing to associate with. This results into the effectiveness of the decision making processes whereby the appropriate internal structures are followed internally and the external society willingly accept the proposed solutions. Decision making process within entities should take into consideration four major perspectives. These are technological, organizational, individual and societal perspectives and although they are interdependent, they integrate to ensure that decisions made are effectively implemented without facing major challenges. This will also allow room for the evaluation of the arrived decisions and amend them according to the environmental requirements. References Bloomfield, BP & Best, A 1992, Mgmt. Consultants: Sys. Dev., Pwr & the Translation of Prob., The Sociological Review, Vol. 0038. Callon, M 1987, Society in the Making: The Study of Techn. As a Tool for Sociological Analysis. Linstone,H 1984, Our Proposed Perspectives, Sydney: Pergamon. Parkin, J 1994, A Pwr Model of Urban Infrastructure Dec.-Making, Geoforum, Vol.25, Iss.2, pp203-211. Read More