Strategic Management and Business Policy - Case Study Example

DECISION MAKING Name: Class: Professor: Institution: City/State: Date: Table of Contents I. Executive Summary …………………………………………………..2 II. Introduction …………………………………………………..3 III. Problem …………………………………………………..3 IV. Analysis …………………………………………………..4 a. Learning Organization …………………………………………………..4 b. Halo Effect Theory …………………………………………………..4 c. Stereotyping Theory …………………………………………………..5 d. Intuitive Thinking …………………………………………………..6 e. Critical Thinking Model …………………………………………………..6 V. Reflection …………………………………………………..7 a. Rational thinking …………………………………………………..8 b. Irrational thinking …………………………………………………..8 c. Bounded Rational …………………………………………………..9 VI. Recommendations …………………………………………………..9 VII. Conclusion …………………………………………………..9 VIII. References …………………………………………………..10 Executive Summary The process of decision-making is clearly depicted in the report. In my opinion, the senior directors who head the recruitment team should base their recruitment process on the merits of an individual and not on the ethnic background. As part of the team involved in assessing the recruitment of the applicants, I found it unethical and disheartening when an application of a less qualified applicant was selected over that of a more qualified person. The position in question was Human Resource manager. The applicant short-listed belonged to the same ethnic group as the individuals who voted him in. They happened to be the majority in the recruitment board. The applicant that scored the highest when tested on their decision-making capabilities was the gentleman with outstanding academic merits, but despite his performance, he was overlooked. The reason behind his dismissal was he did not convince the panel on why he wanted the job and the change he would bring to the company if given the opportunity to become an employee. Being a witness during the whole interviewing process, I can attest that neither performed better than the other. They both had good reasons as to why they wanted the job and stipulated the necessary changes they would bring once chosen to occupy the position. In my opinion, the overlooked candidate who was Asian by ethnic affiliation should have been the one chosen to fill that position instead of the Caucasian. Introduction In the corporate world, the process of decision-making forms a vital part of any establishment to ensure it is run and managed properly. This affirms the company will be successful. One of the main points considered in the strategic management are the tactics and strategies implemented in order to guarantee the long run performance of a corporation (Charan, 1998, 65). The first and foremost aspect influencing the decisions made is improving the organizational performance of an establishment (Wheelen & Hunger 2011, 44). A major part of the corporation with a great impact on the organizational performance is the working force. The employee ensures all the functions required of an establishment are done to perfection thus increasing the overall performance. Problem The problem of ethical bias was noted in the recruitment process while filling the position of human resource manager. The applicant short-listed belonged to the same ethnic group as the individuals who voted him in. They happened to be the majority in the recruitment board. The applicant that scored the highest when tested on their decision-making capabilities was the gentleman with outstanding academic merits, but despite his performance, he was overlooked. Analysis Learning Organization There are traits that should be instilled in an organization for it to be considered to be in a learning process. This includes using the history and past experiences as a learning tool. The discrimination of one’s ethnicity is a long outdated practice. It is part of a dark history that should not be relived again especially in the modern world today where globalization is the new order. With globalization being at its peak, establishments all over the world should encourage each other to embrace the cultural diversity, which is a never-ending phase. An organization that fails to incorporate strategic management is one with impending collapse looming over it (Wheelen & Hunger 2010, 99). The recruiting team is part of the management as it selects only the best team players out of the many applicants who come for the interviews. The decision made was not for the company’s interest and it bordered on discrimination. Selecting an employee suited for the job vacancy meant overlooking their ethnicity and focusing more on their academic merits and attitudes. The decision made, to some extent has deterred the company’s performance, as it would have retained as better employee. Halo Effect Theory In stating the true definition of decision making, it is said to be the emotional, cognitive and neurophysiologic process comprising of thoughts, emotions and neurological functioning. This results to selection of a choice out of an array of alternatives. There are certain factors that affect the rationality of decision-making. One of the factors I relate to the experience I encountered during recruitment is the halo effect (Wheelen & Hunger 2010, 45). This factor translates to the passing of positive judgment. This judgment is usually influenced by past experience. In relation to the encounter, the company has never shown any discrimination towards any race in terms of recruiting employees, however, the record show that the employees with the best record are of Caucasian descent. In terms of selecting the two applicants, the thought process of the majority who picked the Caucasian was not based on discrimination but rather on halo effect. A Caucasian employee translates to better performance. Stereotyping Theory Another factor, which comes into play on influencing the decision was stereotyping. This simply means making judgment or decision based on a characteristic oftenly shown by a specific element. The record held by the Caucasian in the company influenced their decision. They assumed the recruit would perform better than his to-be colleagues would. It was a stereotypic decision. Intuitive Thinking On analysis of the decision made based on the thinking process that occurred, one would place it under intuitive thinking. In this type of thinking, the decisions made by an organization or a person are usually influenced by factors such as accumulated judgment and upon experience (Schon, 1983). It can be termed as the process through which fails to incorporate any critical thinking or rationality. Apparently, for one to have a strong sense of intuition, they need to have experience and mastery of the art for several years. The other side to this thinking is it actually renders a decision making process a difficult process, as it is subconscious. The majority of the recruitment teams chose the Caucasian recruit because of the best performance record held by his kind. This reason can be categorized under basing decision under experience. It is very appropriate to state that experience plays a major role in enabling a person or a group of individuals to make decisions subconsciously. A research conducted by Miller and Ireland, found that an estimated 50% of business ideas are usually decided on instinct. However, this does not necessarily mean they are 100% correct or likely to succeed. It creates the ‘gut’ feeling due to the similarity of the current situation to the past one. Thus, the group also experienced the gut feeling which inclined them to choosing the Caucasian over the Asian recruit. Critical Thinking Model The method best applied in cases where judgment of character is a necessary process is critical thinking (Wheelen & Hunger 2011, 78). In it simplest definition, it is said to be an intellectually disciplined approach to a situation, involving the process of evaluating and critically weighing options and making proper discernment which are coupled with specific actions. It comprises of the evaluation of both clear ad unclear thinking processes. In as much as it is used in an educational setting, it is a crucial process in making corporate decisions. One can acquire several abilities when one inculcates critical thinking. The skill of critically thinking out situations should be evident in the leaders chosen as part of the recruitment program. They should have the proper discernment to logically reason out why certain applicants stand a chance of getting the job as compared to the rest. It is a very important tool in both professional and academic disciplines. It incorporates three aspects an attitude that allows one to properly discern what is to be done , skills which are used to incorporate the needed changes and finally, prior knowledge of reasoning and logical questioning. It allows one to recognize and solve issues that may arise. Various components can assist in improving this type of thinking. They include emotional intellectuality, consideration of facts, single loop and double loop learning. When an individual or managerial executives of an establishment fail to critically think before making a decision, not restricting it to recruitment and employment but also other important tasks and functioning of the company, they are open to errors on their decision making exercise. The errors are likely to be wrong decisions due to hurried thinking, desire to settle for the status quo etcetera (Schon, 1983, 96). Reflection The process of thinking and making decisions has created many theories aimed at explaining it. These theories are form based on rationality and irrationality of the decision maker. Rationality in its true sense is described as relative concept as it depends on the thinking capacity of the individual making the decision (Mintzberg, 1983, 132). However, there are major factors that are related to rational thinking. The factors are objectives set as well as how they will be achieved. The whole process in the scenario is a representation of how recruitment occurs and how the actions that follows influences the process of selecting the right candidate. In a realistic perspective, if a decision made is capable of motivating action that will lead to the achievements of the goals set then it can be considered as rational. Rational thinking The company’s goal in recruiting a Human Resource Manager who will perform at his or her level best by ensuring all duties linked to the department are well managed and completed. The process of recruiting a person to fill such an important position requires not only critical thinking but also a rational mindset. This type of mindset guarantees the decisions made are for the betterment of the company and its development. Rational thinking in a recruitment process is crucial as a means of shortlisting only the top potential performers. Basing judgment on credentials and personality of a prospective employee is the right method of selection that is supported by rational thinking (Stivers & Joyce 2000, 23). However, making decisions based on stereotypic assumptions, halo effect and the intuition can lead to the wrong choice as seen when the top performing recruit is overlooked and dismissed and position taken by a less performing candidate. Irrational thinking In my opinion, the decision made irrational and proper consideration of the validity of the credentials and presentation lacked. There was no alignment of the objectives set for the company, which is employment of the best recruit, to the action taken which is hiring of the under qualified Caucasian compared to the Asian who had more credentials and strong personality. As dictated by rational thinking, the best option selected out of the alternatives has to be one with he highest quantifiable ‘utility’ which translates to optimal output. Considering the decision made is opposite of all the expected assumptions made in rational thinking, it is in order to state that the decision was irrational which is quite detrimental to the company’s performance if the trend continues. The type of rationality used in making this decision is bounded rationality (Charan, 1998, 84). This approach states that present constraints and conditions limit rational thinking. Bounded Rational Five differences have been brought forth in an attempt to demarcate rational and bounded rational thinking (Gavetti & Jan 2008, 101). Primarily, humans have a tendency to disintegrate a problem into smaller segments that can be solved; this is formed by the complexities stemming from real life issues. Secondly, due to the lack of means to access complete information, humans tend to settle for what is good enough now thus not making the best choices. In case there is a possibility of uncertainty created when outcomes emerge, one can opt to acquire short-term feedback to counteract this negative effect. The last but not least, some of the organization tends to move towards the second or third choices (Charan, 1998, 57). This is considered as satisfying as it does not produce best results for the company and is seen as settling for the status quo. The decision by the company was to settle for the second alternative, leaving the first option out of the selection despite displaying complete competence and the ability to perform at their best. Recommendations Dissolution of the current recruiting body and the formation of another with individual from mixed ethnic backgrounds to allow non biased selection of recruits thus enabling only candidates with the excellent credentials and academic qualifications occupy the vacant job positions. Use of hired recruitment agencies and firms ensuring that recruitment based on bias is avoided. It allows for individuals from other cultures to have equal opportunities in acquiring the job. A company with a work force comprising of diverse cultures has better performance as it promotes growth within the employees in term of acceptance of their culture variation and spirit of team work. Conclusion The analysis provided this support has been aimed at evaluating the decisions made by the majority of the recruitment body to select a less qualified Caucasian over an overly qualified Asian. It has explained different thinking process that must have occurred for the decision to be made. From a psychological perspective, the various assumptions made by the recruiting body are outlined. They include assumptions based on intuition and stereotyping. The lack of critical thinking and making decisions based on the goals of the company is also lacking in a great detail. The irrationality of the decision is the attributed to the bound rationalism which is greatly illustrated during the whole recruitment process. Evaluating the situation from a sociological front, the members of the recruiting board can be said to be inclined to their ethnicity. References Charan, R 1998, Boards at work: how corporate boards create competitive advantage. San Francisco, Jossey-Bass. Gavetti, G., & Jan W. Rivkin. 2008. Seek Strategy the Right Way at the Right Time. Special Issue on HBS Centennial. Harvard Business Review 86(1) Mintzberg, Henry 1983, ‘THE CASE FOR CORPORATE SOCIAL RESPONSIBILITY’, Journal of Business Strategy. Vol 4. Pfeffer, Jeffery & Sutton, Robert January 2006. Evident based Management. Harvard Business Review. Schon, D.A 1983, The Reflective Practitioner: How Professionals think in action. Chapter 2: From Technical Rationality to Reflection-in-action. Basic Books Stivers, B. P, & Joyce, T 2000, ‘Building a Balanced Performance Management System’. SAM ADVANCED MANAGEMENT JOURNAL. Vol. 65.pp. 22-29. Wheelen Thomas .L, & Hunger, J David 2010, Concepts in Strategic Management & Business Policy (12th ed.). Upper Saddle River: Pearson Education Inc Wheelen, Thomas L , & Hunger, J David 2011, Strategic Management & Business Policy Mymanagementlab Access Card Achieving Sustainability. Pearson College Div. Read More