Managing under Uncertainty - Erin Brockovich - Case Study Example

Executive Summary The report which analyzed the case study of Erin Brockovich highlights the different perspective of decision making and the manner in which decisions were taken within the organization. It shows the manner in which different decisions models were being avoided and the entire framework which was used hampered the growth and progress and resulted in a law suit. The analysis shows that using the different decision making theories and models would help to improve the overall effectiveness and would multiply the manner in which business would gain. This would further look at analysing the same from different perspectives and were not able to use the different perspective through which decisions were taken. The overall analysis thereby shows the manner in which the business would gain and throws light on the different areas through which efficiency in decisions will be gained. Table of Contents Introduction 3 Case Study Details 3 Issues Identified 4 Decision Making Theories & Models 5 Disciplinary Perspective of Decision Making 7 Recommendations 9 Conclusion 10 References 11 Introduction This report analyzes the case study of Erin Brockovich where it looks to analyse the different perspective of decision making and the manner in which decisions were taken within the organization. The analysis will help to develop an insight based on different perspective; theories and models which will help to either justify or unjustified the decisions which were taken. This would thereby help to understand the different dimensions of the disciplinary model of decision making and will throw important light on the manner in which business decisions and effectiveness gets affected. The overall analysis will thereby be followed by a recommendations which will help to understand the different directives and actions which have to be taken. These recommendations will be based on the different theories and models and will highlights the manner in which decision making can increase effectiveness in the business process. Case Study Details The case highlights the manner in which different rights and benefits which an employee, society and others related to the business should have gained but were entirely missing due to the lack of effectiveness shown in decision making. The case shows the manner in which Erin Brockovich who looks to investigate a situation which highlights lack of proper care and attention from the organization to reduce the content of hexavalent chromium which has affected the health of people. It was identified that despite finding out the mistake both the organization i.e. the investigating organization and the firm who has done the act were not willing to make changes. The firm instead were willing to compensate but not take the moral responsibility and ensure a change in the decision making process so that the health condition could be improved. Finally when a law suit was filled it resulted in PG&E paying for the compensation to the people of Hinkley and finally had to take steps to ensure that water and other substances were not contaminated with of hexavalent chromium. The case clearly highlights the manner in which different issues associated with human lives were ignored and no moral responsibility was taken to bring a change in the decision making process so that the society benefitted. Issues Identified The case has helped to identify the following issues Lack of effectiveness in decision making as decisions were taken just to ensure that the business and its associates is able to earn high profits and didn’t look towards ensuring that the society, employees and others associated with the business were considered Despite having complete and true knowledge on the part of both the management and the lawyer firm related to the incident both were ignorant and were not willing to deal with the issue. This could have helped to simplify the process of decision making and would have ensured that the other important aspects through which better decisions will be taken would have been considered (Cobos, Almaraz, and Garcia-Madruga, 2003) Lack of proper use of different models and theories of decision making highlighting the manner in which one perspective were looked at and the other perspective through which correct and better decisions could have been taken were ignored Organizations take decisions which ensures better productivity and doesn’t look to consider the broader perspective and the society as a whole highlighting the manner in which decisions are taken for their mutual gains and the long term perspective of the business is ignored Decision Making Theories & Models The decisions which were taken by PG&E were based on different framework and perspective and ignored the manner in which the society would benefit. Some of the aspects were clearly ignored and resulted in incorrect decisions which has been highlighted through the following models Information Processing Approach to decision making: The information approach towards decision making states that humans are bounded by the different constraints of the environment which results in bounded rationality. This results in perceiving and gathering information which are valuable and desirable. In addition to it the process also involves cost like emotional cost and others which thereby results in taking decisions which are beneficial to oneself (Behara, 2004). This was evident in case of PG&E as the decisions were taken by considering the factors which are valuable and beneficial for them and other factors like the impact on employees and society were not considered. This thereby resulted in the contamination of water through hexavalent chromium which had an impact on the health of people and showed the manner in which the different perspective of decision making was impacted. This thereby resulted in making decisions which were favourable for the business and would look at looking at different perspectives and models for decision making. Analysing the different perspective of decision making and looking it through the framework of bounded rationality would have helped to ensure that decisions were taken correctly and an overall framework through which effectiveness in decisions will be analysed would have been understood. The adaptive decision-maker framework: This framework states the manner in which different maker analyses the different choices based on different attributes and looks at choosing the best option which will be beneficial for them. This thereby results in making their desirability of making decision based on the different perspective through which they will be able to gain. This has thereby resulted PG&E to make a decision which is based on their own good and haven’t considered the society or the employees (Dijksterhuis, 2004). This clearly shows a lack of bounded rationality and needs to analyse all the options and choices before picking one up. This would thereby ensure effectiveness in decision making and would provide the basic necessities through which the different needs and requirements of the society are fulfilled. Optimizing Decision Theory: This theory states that decision maker looks at evaluating the different options and based on the option which ensures maximum benefits and positive results it is chosen (Armitage and Connor, 2001). This is further bounded by rationality and requires that while looking to take decisions society and the employees along with others like the environment is considered in the decision making framework. This aspect was ignored by PG&E which looked at taking decisions which benefitting them but not considering the society and the environment resulted in a loss for the business. This had an impact on their brand image and the company lost the law suit clearly highlighting that the decision making process was wrong. This was further matched by the fact that decisions which were taken didn’t considered the different facets and aspects through which improved decisions would have been taken resulted in wrong decision making. Subjective Expected Utility Model: This model states that people will make decisions out of the different choices based on different attributes and factors through which maximum utility can be achieved. This has thereby resulted in the decisions to be guided by utility where PG&E only considered the financial utility which they were deriving by working in a similar manner. The other aspect of utility like satisfaction, contribution to the society, environment and others were ignored (Challiol and Mignonac, 2005). This resulted in the process of decision making to be flawed and lacked the required fundamentals through which effectiveness could have been achieved in decision making. The impact was that the organization lost the law suit and had to stop indulging in such activities as well as a fine was levied on them. This thereby states the need to consider the utility from all perspective and based on it decisions should be taken so that everyone associated with the business gains Satisfying Decision Theory: This theory states that it is not possible to evaluate all the options so organizations based on their needs and requirements look at ensuring that most of the desired criteria are accepted and the model is developed in such a manner that effectiveness is gauged in decision making (Broder, 2003). This aspect was completely missing in case of PG&E as the minimum criteria which should have been followed were ignored. It was imperative that the management and the organization ensured that the society, environment and employees were considered but instead only the financial gains were considered. This resulted in ineffective and incorrect decision making which thereby had an impact on the overall long term prospect of the organization. The different models and theories of decision making clearly highlights the manner in which PG&E ignored and didn’t pay attention to the different needs and requirements of the decision model. Disciplinary Perspective of Decision Making The disciplinary perspective of decision making requires that decisions which are made should be based on the moral conduct and should look at benefitting maximum people associated with it. Decisions which are taken after considering the different factors and ensuring that maximum criterion are met helps to maximize the overall potential and provide a framework through which business decisions improves (Anderson, 2003). This helps to ensure that the different stakeholders associated with the business are compensated properly and the decisions are taken keeping in mind the global perspective. The disciplinary perspective further instigates and favours a mechanism which looks at maximizing gains so that minimum losses for the business happen. This helps to identify and develop a framework based on which different decisions models are developed. This would have ensured that PG&E understood the manner in which their decisions were impacting the different segment of the society. Since, the decisions taken by PG&E were not governed and developed by the basic framework through which overall formulation of decisions would have benefitted the business it has resulted in creating the required gaps through which business is unable to work according to the correct mechanism and requires an overhaul to be better prepared to deal with the situation (Carmon, Wertenbroch and Zeelenberg, 2003). Recommendations PG&E based on the different decision making models and theories have to look at incorporating the following recommendations Decisions should be taken after considering the moral hazards and should be bounded by rationality. This will help to ensure that all the different stakeholders are well informed and the business will understand their duty towards those. This would help to develop the required framework and understanding based on which better services can be provided. This would also ensure effective decisions and would maximize the gains PG&E needs to look at using the different models and theories like satisfying theory which states that it is not possible to evaluate all the options so organizations based on their needs and requirements look at ensuring that most of the desired criteria are accepted and the model is developed in such a manner that effectiveness is gauged in decision making (Bettman, Luce and Payne, 2008). This would have ensured that the different stakeholders would be considered and based on it correct and better decisions will be taken. People within the organization needs to understand their role and should be guided by the value system they have. Instead of allowing others to carry out the wrong act people should be brave enough to bring the change and should ensure that the entire process looks towards maximizing the gains. This will help to fill the different gaps which are present and will provide the framework through which overall business gain and effectiveness will be measured. This would ensure effective decisions and ensure that the business looks to satisfy the maximum number of criterion. Conclusion The report analyzes the case study of Erin Brockovich where it analyses the different perspective of decision making and the manner in which decisions were taken within the organization. The analysis will help to develop an insight based on different perspective; theories and models which will help to either justify or unjustified the decisions which were taken. This would thereby help to understand the different dimensions of the disciplinary model of decision making and will throw important light on the manner in which business decisions and effectiveness gets affected. The overall analysis will thereby be followed by a recommendations which will help to understand the different directives and actions which have to be taken. These recommendations will be based on the different theories and models and will highlights the manner in which decision making can increase effectiveness in the business process. References Anderson, C.J. (2003). The psychology of doing nothing: forms of decision avoidance result from reason and emotion. Psychological Bulletin, 129, 139-167 Armitage, C.J. and Connor, M. (2001). Efficacy of the theory of planned behaviour: a meta-analytic review. British Journal of Social Psychology, 40, 471-499. Behara, A. (2004). The role of emotion in decision making: evidence from neurological patients with orbitofrontal damage. Brain and Cognition, 55, 30-40. Bettman, J.R., Luce, M.F. and Payne, J.W. (2008). Constructive consumer choice processes. Journal of Consumer Research, 25, 187-217. Broder, A. (2003). Decision making with the "adaptive toolbox": influence of environmental structure, intelligence and working memory load. Journal of Experimental Psychology: Learning, Memory and Cognition, 29: 611-625. Carmon, Z., Wertenbroch, K. and Zeelenberg, M. (2003). Option attachment: when deliberating makes choosing feel like losing. Journal of Consumer Research, 30 (3), 15-29. Challiol, H. and Mignonac, K. (2005). Journal of Organizational Behaviour, 26 (3), 247-274. Cobos, P.L., Almaraz, J. and Garcia-Madruga, J.A. (2003). An associative framework for probability judgement: an application to biases. Journal of Experimental Psychology: Learning, Memory and Cognition, 29, 80-96. Dijksterhuis, A. (2004). Think different: the merits of unconscious thought in preference development and decision making, Journal of Personality and Social Psychology, 87, 586-598. Read More