Decision Making as a Process of Making Choices among Alternatives - Essay Example

Name Unit Professor Date The Situation Decision making in workplace is a process that is carried out frequently. The process is evoked by a stimulus. I was able to observe a decision that was made in the place I used to work. This was a decision that was based on a crisis situation. In this case, crisis was the stimulus which led to a decision being making process. The organization was facing a crisis due to reducing market of their products. This had led to loss of revenue and the organization was running at a loss. This led to the decision being made to cut the expenditure in the firm. The organization manager was involved in making this decision. The managers’ decision was influenced by the fact that the organization was running at a loss. After making the decision, the manager announced the need for it to the stakeholders. His decision was meant to save the organization form the financial crisis. Despite aggressive marketing campaigns, there were poor sales due to economic downturn. This meant that there was need for an immediate action that would enable the firm to survive the crisis. Most of the employees expenditure was running high compared to the returns. The organization manager expected the decision would lead to the workforce being more efficient in their expenditures which would lead to savings. The outcomes of the decision were excellent. Within a month, the organization announced that they have been able to reduce the expenditure by more than a third. The results had been achieved without compromising efficiency of the organization. The manager was praised for his decision which led to saving revenue in time when the firm needed it. Through manager’s decision, the organization was able to overcome the difficulties it faced without the need for layoffs or salary cuts. Analysis Decision making involves a process of making choices among alternatives (Schoenfeld, 10). A decision maker has to look at the available alternatives before coming to a final decision. The manager was faced with a range of choices in order to cut expenditure at the organization. Among the choices that he had were wage cut, downsizing and merging the firm. Despite this, all the choices have their associated consequences. For example, downsizing may lead to a lean and efficient organization with reduced expenditure, but it may reduce employees’ motivation and further make the returns to deteriorate. This is due to fact that the employees who survive downsizing may lose faith with employer and experience insecurity over their jobs. The process may also lead to psychological effects to the employees being affected. In case of salary cuts, the employees have to bear with reduced appreciation for their work. This may reduce the workers morale and lower productivity. Despite this, the method can save a lot for the company. In order to remain competitive, decision makers are expected to come up with timely and sharp decisions (Towler, 23). This can be seen in the case of the organization manager who came up with the decision to save the organization. The decision to cut the expenses could be termed as rational. This is due to fact that it was carried out through the right cognitive standards. A rational decision should be able to maximize on the outcomes through use of cognitive abilities. For someone to come up with a rational decision, they must be equipped with good information processing abilities. The organization was in deep trouble and the manager had to act in such a way that the decision made was rational and reasonable. Organizations where the managers take rational decisions are able to succeed. The performance of an organization is affected by rational decision making. In some instances, the management is unable to make rational decisions. This occurs due to their abilities being influenced by both internal and external factors. This makes their decisions to become bounded. Bounded rationality leads the management to take the first decision that they think of without looking for further information (Simon, 36). This is due to factors that affect their abilities to continue searching. This did not affect the manager in decision making. This is due to fact that it took him time to come up with that decision. He had enough time hence could not be deviated from rationality in coming up with the final decision. Most of the decisions that are affected by bounded rationality are short time solutions in firms. They may later fail to succeed hence there is need to avoid being affected by bounded rationality. Going through shortcuts is sometimes possible in decision making. This is where information processing does not occur due to lack of knowledge, limited time, complexity of information and cognitive constraints. Using short cuts to make a decision is known as heuristics. This involves ignoring part of the knowledge in order to come with a fast decision and accurately. Those who are affected by heuristics act in a way that they avoid carrying out complex decision. Both rationality and heuristics are biases that affect decision makers. In some instances using heuristics can lead to errors in the organizations (West, Toplak & Stanovich 937). In the case of manager, it can be argued that he did not use heuristics. This is due to fact that he had earlier announced that the firm was facing crisis and was in process of coming up with a solution. This shows that there was a time lapse where he was looking at the available alternatives and processing the information. The decision to cut the expenses was rational as they were running high despite the organization being at a crisis. Decision can determine success or failure of an organization. Though rational decision making is mostly used in organizations, the role that heuristics play cannot be underrated. Some of the successful decisions have been achieved through use of heuristics. In some situations it’s hard to make a rational decision especially where one has small samples (McCaughey & Bruning 46). This may lead to the decision maker using shortcuts to come up with final decision. Use of heuristics cannot be termed as good or bad but it’s associated with the situation. In situations where there is no ample time, heuristics plays a major role. In cases such as this where the manager had ample time, he had to be rational (Gilboa 29). In some cases, being rational is hard and heuristics become unavoidable. Reflection In the decision making situation, I observed that the manager had made the decision rationally. I also noted that his decision gained support from the staff who acted to implement it. He impressively made a decision after looking at the possible alternatives and deciding what was best for the organization. He had earlier said that he was weighing the best solution that could save the organization. Though not all rational decisions are successful, this was a decision that saved the firm from closure or layoffs. When a manager is faced with such a situation where they have to save the firm and also look at employees’ welfare, ethics plays a major part (Buchanan & Connell 34). The management has a duty to protect the firm and also to cater for the employees. The decision made must be able to show that the firm is concerned about the employees as well as its success (Eisenfuhr 20). I was impressed by the fact that the manager decision was not made in a rush but involved a long time deliberation. In some instances, lack of ample time during crisis can make managers to take short cuts in coming up with decisions. Though in some instances they succeed, failure rates are high than when rationality is used. If I were in the managers’ situation, I would also have implemented pay cuts to go together with reduction in expenses. This would enable the organization to save more of their finances. Pay cut decisions should be well evaluated and are better carried out rationally (Bubnicki, 45). I would have looked at the current wage bill and reduce it while at the same time looking at the employees welfare. This would have involved a situation where pay cut would be related to the amount of employee’s wage. The decision to cut the pay should be made in such a manner that the employees would appreciate as a way of saving the firm hence their jobs. If the proceeds from the salary cuts are combined with what is saved on expenses, the firm would be able to save a lot. In time of crisis, the employees can do anything to help the firm if they are involved in the right way. As the manager announced his decision to the employees, everyone was keen. Most of the employees had braced themselves for worse as they knew that the firm was underperforming. He explained why he took the decision and how it would benefit the employees. He stated that it was prudent to reduce the expenses and save the firm. When making a managerial decision, communicating in time helps in implementation (Gigerenzer & Gaissmaier 480). The firm was making loss while the expenses were rising. Most of the employees were concerned on losing their jobs. This meant they could do anything to avoid layoff or closure of the firm. Works Cited Buchanan, Leigh & Connell A.O, “A brief history of decision making.” Harvard Business Review, 84 (2006): 32-41 Bubnicki, Zdzislaw. Analysis and decision making in uncertain systems. New York: Springer Verlag, 2003. Eisenfuhr, Franz. Decision making. New York, NY: Springer, 2011. Gigerenzer, Gerd. & Gaissmaier, Wolfgang. “Heuristic decision making.” Annual Review Psychology, 6(2010): 451–482. Gilboa, Itzhak. Rational choice. Cambridge, MA: MIT Press, 2011. McCaughey, Dierdre, & Bruning, Sue, N. “Rationality versus reality: the challenges of evidence- based decision making for health policymakers.” Implementation Science, 10(2010):5- 39 Schoenfeld, Alan. H. How we think: A theory of goal-oriented decision making and its educational applications. New York: Routledge, 2011. Simon, Herbert. A. Economics, bounded rationality, and the cognitive revolution. Northampton, MA: Edward Elgar Publishing, 2009. Towler, Michael. Rational decision making: An introduction. New York: Wiley, 2010. Verschaffel, Lieven. Use of external representations in reasoning and problem solving: Analysis and improvement, New York, Taylor & Francis, 2011. West Richard, F. Toplak, Maggie, E. & Stanovich, Keith, E. “Heuristics and biases as measures of critical thinking: Associations with cognitive ability and thinking dispositions.” Journal of Education and Psychology, 100 (2008): 930–941 Read More