Multi-Perspective Strategic Decision Making - Case Study Example

Name: Tutor: Course: Date: Personal Case Study Reflection Corporate social responsibility is a universally accepted ethical concept and practice of business organizations all over the world. Recently, my firm approached me with an idea; I was chosen to come up with the best possible chore the firm could participate in as its corporate social responsibility. In my excitement, I did not consult other members of staff about this decision. I quickly went through some old newspapers and picked a venture that I knew would give the firm as much publicity as possible. In my innocence, I figured this could act as marketing or an advertising chance for the company and could lead to enhanced sales across all sectors of operation. However, I failed to consider the total cost to the company in the long run. The publicity that I had banked on to generate positive buzz for the company turned into a media circus that crucified the company with negative reviews due to its involvement with a controversial project. Even though I had intended to do good for the company, I ended up hurting the company’s image and finances too. This paper is a personal reflection of what I could have done better had I been aware of the different models, frameworks and theories of decision making. Critical decision making Decision making is defined as the process of selecting between choices thoughtfully and logically. Even though the decision I made does not fall into a multi-perspective spectrum, it was a strategic decision. Wainfan (2010: 3) describes strategic decision making as an important decision in terms of the actions of the firm and the resources that are committed. In describing decision making, Robbins (2009: 124) points out that decision making generally needs training for it to be perfected. It is therefore quite possible that had I learned decision making and its implementation, I would have arrived at a better decision than the one that I made. Robbins points out that all business decision makers must understand the decision making process and be aware of the decision making models that make the process easier. Robbins goes further to suggest that if we want to fully understand decision making, the n the study of our errors will be the first step in understanding it. My reflection on the mistakes I made therefore is in line with Robbin’s assertions. There are various models that define and ease decision making. Niu and Liu (2009) on their part show us that the most significant model of decision making is the rational decision making model. Niu and Liu define rational decision making as a model that emphasizes the collection of facts as well as the carrying out of research. This includes the use of processes such as data analysis and evaluation, surveys and interviews to obtain or create a complete picture of whatever that needs to be decided on. They explain that this model involves thinking thoroughly and following a set framework to arrive at the best decision for the company (5). Scribd (2013:1) argue that the rational decision making model is divided into six steps. The first step of the rational decision making model is the definition of the problem. While reflecting upon my decision I decided that this may have been the only stage of the decision making model that I got right. The second part of the model is the identification of decision criteria. As soon as the problem has been defined, one is advised to determine the things relevant in making the decision. These include personal preferences, interests and values. In my case, the company’s objectives, aims, targets and visions should have helped me to identify the decision criteria before making the decision (pp 1). The third step involves weighting the criteria identified in the previous step of the model. This allows one to set the correct order of priorities before carrying out the decision making. This step would have been instrumental in my decision. The objectives and targets of the firm should have been at the top of my priorities list. Utilizing the targets and objectives of the company should have guided me in choosing a better corporate social responsibility choice than the one that I made. The fourth step in the rational decision making model is the generation of alternatives that could succeed in providing a suitable solution for the problem. This step does not involve rating or evaluating the alternatives but just listing them. This is another step that I failed while making my decision. Even though I considered several alternatives, my list was in no way exhaustive. I already had a preformed idea in my mind about the CSR project that I wanted the company to undertake having come across it in the newspaper. I should have come up with a long list of options across the city and the country to choose from. The fifth step of the rational decision model involves rating the listed alternatives developed from the decision criteria. This step involves the critical analysis and evaluation of each of the alternatives developed in the previous step of the model. This is a very important step in the decision making process because the advantages and disadvantages of each alternative are documented and the alternative with the least demerits and the most merits settled on. A SWOT analysis of the alternatives can be carried out where the strengths, weaknesses, opportunities and threats of the alternatives are evaluated. A SWOT analysis of my decision would have been an important step that I regrettably skipped while coming up with the best CSR project for the firm. I would have found out that the strengths of the decision fell so far below the weaknesses it presented. I would have also found out that the decisions had serious threats that it posed to the company image and its financial standing (Ferrell & Hartline 122, Pahl & Richter 27). The sixth and last step of the rational decision making model is the computing of the optimal decision. This step involves assessing each alternative developed in step four against the weighted criteria. The alternative with the highest score is selected. I failed in this last step because I made a decision without any consideration for the weighted criteria or assessing more than just a few alternatives. Contemplating the recommendations and steps provided by the rational decision making model, my decision fell short of the quality set for decision making. I did not consider several steps provided by the model. It is therefore no surprise that my decision had overwhelming negative consequences for the firm. Daft (2009) applauds the step by step sequence proposed by the rational decisional making model. He explains that the model is perfect for the correction of decision making processes adopted by individuals and business organizations that made their decisions unsystematically and arbitrarily. Daft points out that the model helps people to think about the decision making process rationally and clearly. The decisions arrived at after the utilization of this process are therefore clear, rational and more systematic. However, the writer points out that the rational model is not 100 percent achievable in the real life of decision making because of the complexity, uncertainty and changes in business situations (454). The irrational decision making model is the opposite of the rational model of decision making. This irrational model makes assumptions during the process and the results obtained are not based on detailed data. This model does not provide any significant process for decision making. Paul & Elder (2002) refers to irrational decision making as a bad habit that needs to be eradicated. My ill fated decision may therefore fall into the category of irrational decision making. This is because I did not obtain data that can be considered detailed while carrying out the decision. I did not follow any procedure while carrying out the decision too (146). Niu and Liu (2009) provide a framework based on the rational decision making model. The conceptual framework of decision making is comprised of four stages. The framework involves the intelligence phase, the design phase, the choice phase and the implementation phase. This framework is characterized by the establishment of a decision model that reflects the problem under consideration. It allows for the problem to be solved by the application of a suitable method. The intelligent phase of the framework involves defining the decision problem and determining the requirements of the decision. This phase allows the decision maker to think keenly about the problem facing the firm. The second stage of the framework is the design phase of the process that is divided into for mini-steps. These include establishing objectives and goals, generating alternatives, determining the criteria and finally selecting a suitable method. The third stage involves evaluating alternatives developed during the second stage and validating the solution. The final stage of the framework involves implementation of the chosen alternative (Niu & Liu 6). Apart from models and frameworks that have been developed to guide individuals in the decision making process, theories have also been developed about the process. The normative theory of decision making is one such theory. Fishburn (1988:78) explains that the normative decision theory entails the preparation and justification of principles of comparative analysis and evaluation of competing alternatives. He explains that this theory encompasses both ethical and normative considerations and social theories. Chapman & Sonnenberg (2003:3) argue that the normative theory of decision making is divided into two. The two divisions are the expected utility theory of decision making and the multiattribute theory of decision making. The expected theory of decision making is the normative theory of choice under uncertain circumstances (uncertainty) while the multiattribute theory is describes decision making under multiple goals. Manktelow (1999:191) advocates for individuals not to confuse utility with value or pleasure. He explains that even though these terms are similar in some instances, it is not always the case. Manktelow explains that utility refers to outcomes of decisions that are desirable because they serve the best interests of the decision maker. In making a decision that involved the company, I was supposed to consider the best interests of the company. As its representative, I should have considered its best interests when making the decision. Callaghan et al (2007:852) agrees with Manktelow’s assessment. They stress that while using the expected utility theory, the decision maker should list the potential benefits of each alternative and assign a probability for its occurrence. The benefit for each occurrence is also formulated. A decision is reached by getting a summation of the product of an expected outcome’s utility and the probability of its occurrence. The decision maker can then utilize the rational method of decision making to choose the alternative with the greatest utility value. Other theories that I could have put to use in deciding on the best corporate social responsibility option available to the company include the psychological theory, the mathematical decision making theory and marginal theories of decision making. Marginal theories call for the maximization of profit, mathematical theories and techniques eliminate the need for judgmental decision making while psychological theories all for the maximization of profit to the best of the firm’s ability and within the boundaries set by the law and the company’s ethical platform (Banerjee 1-9). Conclusion The rational decision making model is the basis of all other decision making models. It encourages the careful consideration of factors and available information before carrying out decision making process. The irrational model of decision making is the complete opposite of decision making as it is illogical and can even be described as a bad habit. Developed frameworks that aid in decision making are iterations and modifications of the rational decision making model. Of benefit to the decision making process are theories that present various ways of going about the decision making process. Some theories that are used in this process are: the normative theory of decision making, psychological theories, mathematical based theories and techniques and marginal theories. After being exposed to the academic models, theories and frameworks covered in this course and after reflecting on my decision, I have come to the conclusion that I was wrong in all recommended aspects of decision making. My decision was not based on any coherent order and therefore was fated to fail the second I was assigned the task of finding the best corporate social responsibility option that could be pursued by the company. I could have therefore benefited from this course in making the right decision that could have greatly benefited my firm. Works cited Banerjee, Arthita, What are the important theories of decision making? Available at , 2012 Callaghan, John, Rosenberg, Aaron & Rubash, Harry. The Adult Hip. Philadelphia: Lippincott Williams & Wilkins, 2007 Chapman, Gretchen & Sonnenberg, Frank. Decision Making in Health Care: Theory, Psychology, and Applications. Cambridge: Cambridge University press, 2003. Daft, Richard. Organization theory and design. New York: Cengage, 2009. Ferrell, Odies & Hartline, Michael. Marketing strategy. New York: Cengage, 2010. Fishburn, P.C. Normative theories of decision making under risk and under uncertainty in Decision making: descriptive, normative and prescriptive interactions, Cambridge: Cambridge University press, 1988. Manktelow, K.I., Reasoning and thinking. Sussex: Psychology press, 1999 Niu, Li and Liu, Jie. Cognition-Driven Decision Support for Business Intelligence: Models, Techniques, Systems and Applications. New York: Springer, 2009 Pahl, Nadine and Richter, Anne. SWOT analysis. Berlin: GRIN Verlag, 2009. Paul, Richard & Elder, Linda. Critical Thinking: Tools for Taking Charge of Your Professional and Personal Life. New Jersey: FT Press, 2002. Robbin, Stephen. Organizational behavior in Southern Africa, 2nd edition. Johannesburg: Pearson, 2009. Wainfan, Lynne. Multi-perspective Strategic Decision Making: Principles, Methods, and Tools. , 2010. Read More