Misdemeanours by Senior Leaders Must Be Handled Firmly and the Right Message Sent
Why Senior Leaders are Expected to be above Reproach and Role Models for Others Senior Leaders are supposed to be role models for the rest of the organization to follow and emulate. Moreover, they are the ones who articulate the organizational vision and actualize the mission for the Middle and Lower level employees and hence, […]
Basic Idea of Presentation Preparation, Content and Delivery
Michael was working as a Brand Promotions Manager with a reputed firm. He was doing very well and was the apple of his boss’s eye. One day, he had to deliver a presentation on his achievements and contributions to the organization in the past few months and also include his future plans in front of […]
Risk Management Policy
The policy of risk management is unique to every organization. Practices that may be considered acceptable in one organization may not be considered acceptable in another organization. Just like the vision and mission of any company, its risk management policy is also unique. This is a basic document, which is drawn up when the risk […]
Political Revolutions
The Nature of Political Revolutions An often-overlooked aspect of the modern political economy is the capacity for change and renewal that is inherent in the way modern democracies work. Despite reversals of democracy where world over we are witnessing the retreat of democracy, there have been notable exceptions to the norm wherein some social and […]
Individual Decision Making – Pros and Cons
Individuals have a tendency to think and question before performing. This is fruitful in analysis and forecasting of individual’s behaviour. Individual decision making has certain pros and cons, few of which are mentioned below: Pros of Individual Decision Making An individual generally makes prompt decisions. While a group is dominated by various people, making decision-making […]
Decision making is part of everyone’s life and all of us have to make decisions every moment. Right from choosing what to wear to what to eat to where we live and work and extending to whom we marry, decisions are an integral part of our lives.
In an organizational context, it is worthwhile to note that decision making needs the right kind of information, the complete information and the ability to synthesize and make sense of the information. While the first two attributes depend on external sources, the ability to make informed decisions is a personality trait. Hence, successful CEO’s are those who can take into account the different viewpoints and divergent perspectives and arrive at the right decision.
The business landscape of the current times is littered with examples of companies that have made strategic errors and these are mostly to do with lack of proper decisions taken by the CEO’s and managers in these firms. For instance, the failure of Chrysler and Ford (the automobile majors in the United States) to meet the challenge of competition from Japanese auto majors like Toyota was mostly due to the lack of imaginative decisions that would have responded to the threat in a coherent manner. Of course, it is another matter that these companies (Chrysler in particular) under the stewardship of Lee Iacocca were able to successfully meet the competition by the Japanese because of firm decisions taken by him.
The other aspect that relates to decision making in an organizational context is that there must be complete and accurate information made available to the decision maker. In Economics, there is a term called “asymmetries of information” that indicates how incomplete and insufficient information leads to poor decisions and wrong choices. What this concept means is that having partial information or faulty information often leads to “analysis paralysis” which is another term for poor decision making abilities. Finally, even with reliable and accurate information, the decision maker ought to have good problem solving skills and astute decision making abilities to arrive at sound judgments regarding the everyday problems and issues.
The overriding rule in decision making is that the decision maker ought to have legitimacy and authority over the people who he or she is deciding upon.
In other words, decision makers succeed only when their decisions are honored and followed by the people or groups that the decision impacts. The reason for mentioning this towards the end is that in many cases, the fragmented nature of the organizations with different interests represented by factions often undermines the decision making capabilities of the decision maker. Hence, it is worth mentioning that such authority must be vested with the decision maker.
Hence, it is clear that the topic of decision making encompasses several elements (some of which have been briefly discussed in this article). We hope to cover more of these elements in detail in the subsequent articles and this article is thought of as setting the tone for the rest of the module on decision making.
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