Essays on Managing Under Uncertainty: #1 Observation Review Assignment

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Observation SummaryThis study is a review of the nature of projects that take place in the construction industry. It uses the case study of Amco Engineering Company Ltd, a construction company in the United Kingdom. Amco is a company that engages in a multiple operations in the areas of Civil Engineering, electrical engineering and mechanical solutions to a variety of industries. It engages in both construction works and project management. Some of the challenges that Amco deals with so often is in provide quality service to all its many clients. This study focuses on a specific factor that influenced critical decision making in two years ago.

Being a contactor that companies prefer, it had to complete two construction works at the same time. The project manager realized that unless they rescheduled one of the construction tasks, a conflict was inevitable between the two and both clients of the companies were threatening to pull out. The project manager made a request to the human resources to employ additional staff on temporary contract to enable them complete the two tasks simultaneously.

The human resources forwarded the decision to the executive board for consideration, where it took two weeks and three days for the board to finally arrive at the final decision. The human resources department approved the request, and recruited temporary staff that assisted in the site based tasks at the construction sites. This decision was very critical for Amco Engineering because it was at a risk of losing two pillar clients concurrently. The cost implication of the decision was less than the value that it rescued by maintaining the clients.

The two clients never quitted the company as they had threatened, since the level of client service that they obtained was satisfactory. In essence, the factor that influenced the move to make that decision was the influx in the order numbers and sizes versus the shortage of workforce to match the amount of work. The Theory of bounded rationality-Explain the decision making process in this situationAs it is in the theory of bounded rationality, a decision making process recognizes that the individuals have limited rationalities due to the limited information they possess. Their mental cognitive abilities are also limited.

This theory also explains that individuals have limited amount time to make decisions (Snow & Phillips, 2007). However, the theory of bounded rationality maintains that in spite of the limitations of a man, decision making is a completely rational process of obtaining an optimal decision solution depending on the accessible information. In the real sense, decision makers usually seek satisfactory decision instead of the optimal choices. In this study, the theory of bounded rationality applies in the nature of the decision making and the processes of looking for optimal decision.

Nature of decision makingThe kind of decision that the project management team and the construction engineers had to make was a critical one. It required quick response, but because of the limitations in discretions, the team had to follow a chain of bureaucracy (Kline, 2010). It had to contact the Human Resources, which again presented the request before the board. Despite the urgency of the decision, it took two more weeks to complete the decision process. The team was aware of the optimal solution they expected but could not have arrived instantly.

This indeed is how the theory of bounded rationality applies in the scenario at AMCO Engineering Company. There was another limitation in terms of time (Lang & Müller, 2010). Human resource did not have sufficient time to explore the parameters that warranted recruitment of more staff. Another limitation was in the cognitive capabilities. It could not relate different parameters at the same time to determine whether their decision was optimal or merely satisfactory. Perhaps there was a different idea which could have yielded better returns that the quick choice of staff recruitment.

Cognitive limitation manifested in the board sitting as well because even during the two weeks of deliberation, they never saw the need to survey the situation on the ground. They never approached the two clients to negotiate deals with them, but implemented an idea that had not stood the test of time.

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