Advanced Decision Making - Case Study Example

Case Study Reflection Name Institution Professor Course Date 1.0 Introduction Decisions in organisations are made in response to threats or opportunities and they include programmed and non-programmed decisions. This report highlights a circumstance I faced as a human resource manager for a local service company. The report underlines major errors made when making a non-programmed decision triggered by external threats. The challenges I faced include communication issues, satisficing, bounded rationality, biases, intuition, and personality and cognitive intelligence. The issues will be analysed based on administrative theory. The report culminates by providing recommendations on how I would have tackled these problems more productively through application of academic models, frameworks and theories. The report follows Gibbs reflective cycle that encourages an apparent description of the situation, assessment of feelings, evaluation of the experience and a conclusion where other alternatives are considered . 2.0 The Decision Our company was facing hard economic times and the management was struggling to keep it operational through working under a tight budget. The company was experiencing more losses than profits hence requiring a crucial decision to be made that would lower its operational costs. The decision to make redundancies came with the highest human disadvantages and it involved employees and human resources managers. The decision entailed looking for means to lower operational costs and it was influenced by hard economic times the company and eternal threats. Although I did not shy away from my roles and responsibilities, I acknowledged that our business needed such a decision. I was tasked with making numerous redundancies given the negative economic times that our company was facing. Making the decision was not an easy task, but was required to protect our business and the wellbeing of employees. As a senior human resource manager, I was ultimately accountable to ensure that the company remain productive through cutting down on costs in human resources. The decision was met with rejection from the affected employees and instead of improving the condition of the company; it further strained our budget as we needed to restructure our company. As a skilful human resource manager, I was careful to maintain operational effectiveness, increased profits through proving my abilities in managing human resources. Our decision was in response to threats that were negatively affecting organisational productivity and profitability. As a result, our decision was a non-programmed decision made in reaction to unusual threats. The redundancy decision did not improve the company’s situation but rather increased operational costs due to restructuring costs consequently increasing the losses besides destroying the image of the organisation 3.0 Key issues in Personal Decision Making Redundancy comes with risks particularly to managers with inadequate preparations (Chelst & Canbolat, 2011). One of the challenges I faced during the decision making process was communication issues. I was required to communicate the shifts to the affected employees within one week and given the short duration and pressures to make quality decision, I did not seek unanimity and alternatives from employees and colleagues regarding the decision. Consultation did not take place given the time constraints and the situation of the company. Although I kept the employees aware about the step the company needed to take, I did not have enough time to listen or take the views of the employees. The changes the company was adopting affected the working arrangement of the employees and there was a need to keep the employees informed. I did not consider or seek for any other alternatives before implementing the redundancy decision as there was limited time to collect information and views from experts. Additionally, I did not conduct research on redundancy entitlements and notice periods. Although I was required to determine the period of notice as well as redundancy pay entitlement, this did not happen as I was pressured to effect the redundancy decision to avoid more losses to the company. With respect to the theory of general relativity, I failed to use relativity to see the value of my decision and I lacked enough time and space to make a more practical decision given that space and time hold inconsistent twist (Chelst & Canbolat, 2011). 4.0 Why the Issues Arose: Theoretical Sources 4.1 Action-oriented bias I felt pressured to take the action of reducing the number of our employees without considering the consequences. I felt very positive about the company’s future with employee’s reduction and I did not consider the probability of negative upshots following redundancy (Pillai, 2011). Based on the situation of the company and the mandate accorded to me by the company, I was overconfident on my capacity to influence the situation and safe the company from incurring more losses. Instead of focusing and seeking other alternatives, I overestimated the odds of positive upshots of the redundancy decision and underestimated the prospects of negative ones. I had put too much faith on my potential to produce a desired upshot. 4.2 Bounded Rationality According to DuBrin (2008), decision making is normally not wholly rational given that scores of factors impact the decision maker. Limits or bounds to rationality are always present in decision making. These bounds are constraints of human and they are particularly linked to recall and processing of information. Bounded rationality implies that individuals’ finite mental capacities in conjunction with external influences which they hold no or little control for deter them from making rational decisions (DuBrin, 2008). With respect to our company situation, I used problem-solving strategies that were reasonably rapid, practically accurate and I made a decision that fit the type and quantity of the information I had. I did the best I could for the company. However, I lacked enough resources and time to offer the best possible solution to the company’s situation. I looked for satisficing decisions and stopped to look for other alternatives (DuBrin, 2008). By accepting the first practical option, the company postponed the call to execute a decision that completely and truly would solve the issue. Slashing cost through redundancy could not completely solve the company problem as there could be other factors that affect the productivity and profitability. While there was a huge number of options and accessible information on how to solve the company’s problem, the information accessible was so extensive that I could not consider it all. In addition, the decisions I had were limited to my cognitive limitations. 4.3 Intuition According to DuBrin (2008), effective decision makers do not depend on methodological and analytical techniques alone. They also utilise their intuition and hunches (Betsch &Held, 2012). Intuition is an experience-founded means of understanding or reasoning in which balancing and weighing the evidence are done automatically and unconsciously. I made the redundancy decision automatically and unconsciously and arrived at a conclusion without applying step-by-step logical procedure (Price & Price, 2012). I did not conduct research on redundancy entitlements and notice periods besides determining the period of notice and redundancy pay entitlement. The decision was based on my feelings and not the views of experts. 4.4 Incomplete Information Given the risks ambiguity and time limitations, I faced issues of incomplete information. Incomplete information was also caused by high information costs and time constraints. I had no money or time to look for all the possible options to the issues facing the company and I did not have enough time to assess the probable consequences (Gregory et al., 2012). I searched for acceptable responses to the issues facing the company instead of attempting to make the best decisions. I explored a restrained number of options and choose an acceptable decision instead of providing the best solution to the company. Because of my decision the company needed restructuring which would also increase its operational costs. 4.5 Personality and cognitive intelligence The cognitive intelligence and personality of a decision maker affects his/her capacity to find productive solutions to given issues (Band & Patridge, 1999). Being a conservative and cautious person, I had opted to make low-risk decisions. However, organisational pressures influenced my inclination for risk taking. I felt the need to attain the perfect solution to the company’s issues and as such I failed to recognise that other options would be good enough for the company. Being an educated and intelligent person, I chose to collect facts and analyse them an experience that made me suffer from analysis paralysis. According to Pugh (2005), analysis paralysis takes place when one gets struck while attempting to complete his/her understanding of the needs to be executed. This situation prevented me from making a quick decision as I felt the need to learn more about solutions to solve the issues facing the company. It took me time to determine what information was unessential and essential in regard to reduced productivity and profitability in the company. I did not understand what adequate actions were to implement first. The time limitations I experienced also affected the attainable decision objectives. I faced challenges in deciding when and how I would save the company from its hard economic times. Questions led to analyses which in turn triggered new questions that instigated further analyses (Nutt & Wilson, 2012). 5.0 Understanding My Personal Decision-making: Administrative Model Based on the challenges I face during the decision making process, it is evident that I employed an administrative model that helped in finding a satisfactory solution instead of the best solution to improve the company’s profitability and productivity. I was concerned with choosing and executing satisfactory options instead of optimal options. The option I selected satisficed instead of optimizing. I did not follow the major steps in administrative model decision making. The steps include recognising the need for decision which in this case was economic problems and other external effects. The second step involved generating alternatives which I must admit I did not generate (Morcol, 2006). I missed good alternatives thereby making a poor decision that was met with resistance by the employees besides straining the company’s budget further as more resources were needed to restructure the company to make it more productive (Sadeh, 2002). I failed to look for new ideas. If I had generated good alternatives, the decision would have been acceptable by employees and save the resources of the company. The third step administrative model entails evaluating options where I should have weighed the advantages and disadvantages of each alternative to come up with the most appropriate alternative. The fourth step entails selecting among the options through ranking diverse options and making the decision (Morcol, 2006). This called for ensuring that all information accessible is used to analyse the problem facing the company (Secchi, 2010). The fifth step entails executing the selected option while the sixth step entails learning from the feedback (Morcol, 2006). This includes considering what went wrong and right with the decision and ensure better decision making process in future. 6.0: How I would have dealt with the issues differently Had I been exposed to academic theories and frameworks, I would have employed a rational decision making strategy to attain the best decision as the decision I made was met with resistance by the employees and it further strained the company’s resources due to restructuring needs. Based on Gibbs reflective cycle, I would have analysed and described the situation the company was facing and why the company faced the situation (Jasper, 2003). I would have considered the feelings and attitudes of the employees and managers, evaluate the situation and the possible alternatives to safe the company. After the evaluation I would have drawn feasible conclusions that would help safe the wellbeing of the company and implement the most practical decision that would help the company even in the future. Morcol (2005) asserts that the rational man assumption provides a concise, simple and clear conception of human temperament. I would called for recognition of the problem, generation of options for solving the problem, evaluate the options and the most productive option and implementing and monitoring the effectiveness of the selected option. I would have defined the situation, identify the significant criteria for the decision making process and the result. I would have considered all the possible alternatives and solutions to ensure that I choose the best solution. I would have calculated all the upshots of all the possible solutions versus the probability of these solutions gratifying the criteria (Tillman & Cassone, 2012). I would have chosen the best option that could have been beneficial to the company. 7.0 Conclusion Everyone at some point has faced challenges and issues while making decision. Sometimes we jump too quickly to conclusions without considering the upshots of our decisions. For instance my redundancy decision further increased the operational costs of the company. Sometime we face bounded rationality and make decision based on their satisfactory end. In addition, given limited resources and time, we are faced with the challenge of incomplete information and sometimes fallen victim to paralysis analysis. Our personality and cognitive intelligence affects our decision making procedure. However, selecting the best model leads to better consequences where each model holds its costs and benefits. Issues in decision making happen based on the model and the steps used, but following the right steps in decisions can help prevent issues linked to incomplete information, biases, satisficing, intuition, bounded rationality, personality and cognitive intelligence. (2, 191 Words) 8.0 References Band, J., & Patridge, L. (1999). Advanced decision making (12th edition). New York: Select Knowledge Limited. Betsch, T.&Held, C. (2012).Rational decision making: balancing RUN and JUMP modes of analysis. Journal of mind and society, 11, 69-80. doi: 10.1007/s11299-011-0097-2 Chelst, K., Canbolat, Y.(2011). Value-added decision making for managers ( 1st Edition). Broken Sound Parkway, NW: CRC Press. Daft, R., & Marcic, D.(2012).Understanding management ( 8th Edition). London: Cengage Learning. DuBrin, A. (2008). Essentials of management ( 8th Edition.) New York: Cengage Learning. Gregory, R., Failing, L., Harstone, M., Long, G., McDaniels, T., & Ohlson, D. (2012). Structured decision making: A practical guide to environmental management choices ( 1nd Edition). London: John Wiley & Sons. Jasper, M. (2003). Beggining refletive practice, (revised edition). UK: Nelson Thomes Ltd. Morcol, G.(2006). Handbook of decision making ( 1st Edition). Broken Sound Parkway, NW: ‘ CRC Press Nutt, P., & Wilson, D.(2010). Handbook of decision making ( 1st Edition). U.K: John Wiley & Sons. Pillai, K.( 2011). Essence of a managers (1st Edition). London: Springer Science & Business media. Price, D., & Price, A. (2012). Introducing management: A practical guide, (Ist Edition). U.K: Icon Books. Pugh, K.(2005).Prefactoring ( 1st Edition). United States: O'Reilly Media, Inc. Sadeh,E.(2002). Space politics and policy: An evolutionary perspective ( 1st Edition). Netherlands: Kluwer Academic Publishers. ( This is the year from the copy-right page and from the bibliographic information) Secchi, D. (2012). Extendable rationality: Understanding decision making in organisation ( 1st Edition). New York: Springer Science & Business Media. Shapira, Z.(2002). Organisational decision making. Cambridge University Press. Tillman, F., & Cassone, D. (2012). A professional’s guide to decision science and problem solving. An integrated approach for assessing issues, finding solutions, and reaching corporate objectives ( 1st Edition). Upper Saddle River: FT Press. Read More