The Reality of Decision Making

THE REALITY OF DECISION MAKING

Decision making is a complex business subject which combines the most complicated element the decision-making  process is often determined by environmental factors rather  than the steps in some “ideal” model. Decisions are frequently influenced more by the environment and structure of the organiation than by method itself. !he process of  deci decisi sion on maki making ng will will"" ther theref efor ore" e" be exam examin ined ed in ligh lightt of  environmental factors. #ne of these factors $social and cultural backgroundaffects the interaction among people involved in the decision  process and provides the cultural framework within which they comfortably operate. !he best alternative for solving a  problem" for example" might be to replace an employee who is unsuited for a position. %owever if in the society&s culture there is a tradition of lifetime employm ymeent with one company" that alternative is not really feasible because of  social and cultural restrictions. 'ith regard to the structure of an organiation" a number of  factors may alter the ideal decision $making process. ()uch a facilities" technology" or fiscal reserves* are often controlling facto actors rs.. !he rela relati tiv ves than han can can be cons consid ider ered ed.. +no noth ther  er  organiational factor is the importance of the decision being made made in rela relati tion on to othe otherr prob proble lem ms weig weighe hed d agai agains nstt the the amou amount nt of eff effort ort inv nvol olve ved d in find findin ing g a so solu luti tion on and the the  benefit the company will receive receive from its implementation. implementation.

!here other factors also influence the following of a model decision process,   !ime   reativity" and   isk !he amount of time available to make a decision for a given  problem is often determined by the environment" not the management. !he time factors may affect the creativity of  the solution to a problem. !he risk associated with a  particular course of action may be lessened by use of a group rather than an individual decision maker. !ime" resources" and culture may affect the workability of a group process" although research shows that groups often come up with  better solutions than individuals. Decision theory and the ideal decision-making model tend to picture the process as one in which managers operates by themselves" free of restrictions of time" data and resources. !he reality of the decision process is much less a step- by-step procedure than it is a series of practical considerations directly influenced by the social" cultural" and organiational environment.

Exercise  Problem,

!he employee in a company + has demanded to increase salary from /012 to /312. %owever" the company&s management has rejected the demand. 425 of employee has quit the job very suddenly in a month. 'hat shall the management make decision6  Solution:

)tep in decision making,

COMPREHENSION A. 7. !he environment and structure of the organiation

0. 8n the light of environmental factor  3. 8t affects the interaction among people involved in the decision process and provides the cultural framework within which they may comfortably operate. 9. 8t is weighed against the amount of effort involved in finding a solution and the benefit the company will receive from its implementation. 1. 8f a decision maker has a limited amount of time" he or she may think only of the more obvious" common approaches to a  problem. :. ;robably< =because more people are contributing ideas and evaluating alternatives >. + number of factors might be considered< time and funds available" relative importance of the decision" the amount of risk involved B.

time" social and cultural background" flexibility" resources" data" importance of decision" creativity" risk 

Vocab!ar" Exercise

+. ?????  @. 7. +lter  0. estrictions 3. !end 9. ;ractical 1. 8mplement :. eality >. @ackground 4. reativity . 7. creativeA creativityA creates 0. alterA alterationsA alterable 3. interactionA interactiveA interact 9. flexibleA flexibilityA flexes 1. influenceA is influencedA influential

Tex# A$a!"sis 7. environmental factors< people involved in the decision  process< replacing an employee who is unsuited for a  position< the reality of the decision process 0.  D + @ 3. esources 9. three other factors influencing the decision process 1. +. amount of flexibility @. available resources . amount of data D. relative importance of the decision

I$%or&a#io$ Tra$s%er A. '. defining the problem and examining the company&s expectations (. the need for more copying capacity ). those marked by a square *. seven +. ao , to take immediate action (not to wait* ,. a0 , estimated usage per month< because it involves an estimate of the number of copies per monthB unknown occurrences are being predicted -. b3 , (71"222 copies per month* . sie of the machine that is needed B. '. medium< because the most likely cost per copy for the medium and small machines is the same and the medium-sie machine will give greater flexibility for future company needs< i0 (. small< =because the likely cost per copy is > ¢B the others are C¢ and 77¢< h0 ). maintenance or service agreements" quality of copies" speed of  reproduction" durability of machine" flexibility