Organizational Decision Making Essay
The advances in technology and the fast modernization of the world, in general, opened new and very promising avenues of business opportunities not just in an individual’s locale but also abroad. A lot of business-minded individuals from different countries with different nationalities and cultural orientation have and continuously defied the geographic boundaries that exist between continents. This is evident in the growing number of internationally-operating business firms all over the world run by entrepreneurs of varying race and culture. The information man has successfully rebelled against intercontinental borders and the challenge that confronts him the most, deals with how to fit and blend in the new cultural environment in which their businesses are situated.
How are decisions made in an organization?
Decision making is a cognitive process in which one selects a choice from among many. It is considered a psychological construct because even though it is not physically tangible, the results can be observed if a decision has been done. It is basically an activity which calls for a subsequent action to be done. Management involves the skillful planning and execution of business strategies. It is concerned with creating important decisions that affect the long-term goals of an organization (1996). Normally, organizations focus on the external characteristic of the business environment. Top management usually focuses on their aggressive competitors and the constant change in supply and demand. However, the internal area in the organization should be taken into account since it is where they get the services or products for the consumers. Areas such as human resource planning, quality assurance and operations management are some of the essential fields an organization should be taken into account during the decision-making process. The process can be best understood in the diagram below with emphasis on the importance of communication and information within the organization.
Figure 1. Role of information in the decision process. (1998)
What are the organizational barriers and environmental barriers in an organization that impact the decision-making process?
Financial resources. As the nature of financial management become more and more complex in this information and efficient communication era of international business, finance managers face a wide array of challenges, opportunities and options for him or her to enhance the investing and financing activities of the firm as well as the inherent risks and circumstances of the decisions that will be made. The challenge now for the financial manger is to explore the options and take advantage of the opportunities while taking caution in managing the risks.
Communication and work relationships. In government, business, and other occupational arenas, professionals often need to communicate assertively and effectively outside the social boundaries of their own organization or organizational unit (such as outside their own department, division, or project group). Unfortunately, professionals might discover that engaging in cross-boundary communication can be a baffling and stressful experience that does not always result in a desirable outcome. Although many practitioners need to draw on an array of social and rhetorical strategies to succeed in cross-boundary communication and to avoid or overcome its associative risks, sacrifices, and problems, relatively little is known about how to interact and negotiate across organizational boundaries.
Ethics. In a given culture at a given time, there is a broad agreement on major values. Several people agree on what is good and what is bad. Not all hold the same values, but those of the majority will affect the beliefs and behaviors of society (1987). Public awareness of ethics in general and unethical behavior in organizations has increased in recent years. Part of this increased emphasis on business ethics can be attributed to the continued tension between the business world and the public at large. Such tension over the past century has often resulted in calls, by the public at large, for increased deterrence and stricter regulation of the business world (1994).
What actions might be taken to address organizational and environmental constraints on decision-making?
Finance issues. The dramatic changes and advances in communications and information technology facilitated the way towards a sustained progress in the international business and finance environment. The low cost and the efficiency as well as the attractiveness of conducting and entering an international business venture were made available by these technological advances which characterize the global marketplace. Today, greater challenges are faced by financial managers as opportunities for growth as well as possibilities of risks increase in the current and more attractive business world.
Defined goals and objectives of the company. Some commonly held organizational values are the importance of resources, return on investment, the welfare and well-being of employees, service to customers and clients, and loyalty to the organization. Although the goals and values of an organization may be implicit or explicit, to a growing extent they are being placed in writing. Many companies have adopted codes of ethics or include sections in their policy statements that relate explicitly to the ethical realm. They address such issues as leadership, integrity, equity, employee rights, employee development, and participation in policy formulation, nondiscrimination, quality of work life, and the like.
Communication and good working relationships. Communication is the process on which the initiation and maintenance of an organizational change depends. Successful strategies are those that elicit cooperative interaction among people as individuals, work group members, and community stakeholders. Such strategies promote collaborative and united change efforts throughout all levels of the organization (1995). There should be weekly or monthly consultancy meeting between the management and the employees. Not that every single decision should be consulted to the employees but the suggestion is before making a big decision especially if the decision will have a radical change to the organization it must be consulted to the employees first. Establishing a distinctive ethical position in an organization would result in harmony within the organization, free from chaos and conflict and thus making the work and operation smooth and efficient. There will be no grudge between employees, employers, etc. Through ethics, everybody in the organization is in understanding, patient with one another, and creates a harmonious relationship.
Leadership skills. If the staffs are required to be competent for their jobs, supervisors and managers should also be qualified and competent in their prospective positions (2003). Competency in business leadership, functional leadership, team leadership and personal leadership are all key elements of a successful business leader’s skill set. The requirement for well-developed competencies in team leadership and personal leadership, however, is particularly important in the international context.
What techniques can be used for improving the decision making process? For coming up with more creative solutions?
There are many decision strategies that can be used in choosing which of the alternatives to execute. These strategies help the decision maker in terms of making the task of decision-making more organized, easier and faster as the needs of many decision makers such as doctors and businessmen demand.
(1987) have named quite a few examples of decision-making strategies. The optimizing strategy helps an individual determine the expected cost which is not necessarily the financial cost along with the benefit of the result associated with all solutions. The cost/benefit analysis would then produce the optimal solution. This technique is very time consuming and costly because it involves technology and other enhancements. Examples of this strategy are linear programming, decision analysis and other forecasting techniques.
There is also a satisfying strategy wherein the decision-maker comes up with alternative solutions until he generates a solution which can satisfy a minimal set of criteria. This strategy doesn’t compare the alternative decisions because it executes the first reasonable action that comes to mind ( 2005). It is less time consuming and costly than the first strategy; however, this would often result to a less optimal decision.
The next strategy is the heuristic strategy wherein the decision-maker chooses from a selection of alternatives. It is used to simplify complex problems through increasing the probability that a solution will be found within a reasonable amount of time. An individual may use a compensatory decision rule which will permit a high value on one dimension of the decision to compensate for the low value of another dimension.
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