Observation Review
Table of Contents
1. Summary 2
2. Observation Review 3
3. Decision Making Process 3
3.1. Identification of the Problem 3
3.2. Generating Alternatives 4
3.3. Assessing Alternatives 4
3.4. Choosing an Alternative 4
3.5. Implementing the Decision 4
3.6. Evaluating Decision Effectiveness 4
4. Application of the Bounded Rationality Model 5
5. Conclusion 5
6. Bibliography 6
1. Summary
Decision Making is among the most significant processes that are applied in varied companies which are done regularly. Each every company aims to be successful and hence comes up with a process to follow when making decisions. This paper focuses on decisions made by managers so as to be effective in their operations. The paper looks at issues that arise in a company where the players face decisions that conflict with their interests as well as communications. The company has been forced to come up with choices that will alleviate the problem. Varied players are involved that means the interests are called into player. For this to be effective there is the need to come up with a process that will make it possible for the company to settle on the choice that is most effective. The paper has hence gone ahead to look at the decision making process from the noting of the problems, coming up with choices, assessment of choices, selecting the most effective choice through to application of the decisions and assessing the decision success.
With the help of the decision making process the paper ends with a look at how I would solve the problem solving the company stated with the help of the decision making process model discussed and the bounded rational model. It is in this respect that the method of sufficing has been used as the most effective way to handle the situation in case. This takes into consideration the communication aspect as well as the issue of interest portrayed by the varied players in the company. It is through this that the company is able to be effective and successful in its objectives. The paper has acquired views and thoughts by other scholars that add value to the application of bounded rational model as a way of solving problems in the company level.
2. Observation Review
A company has two elements, the players that are involved as well as the resources or operations where the players have control or desires. If these players have control over all of the resources that they want, then what they do is direct; they basically make use of their control in a manner that connects with their needs. These players are however never in control of what they want. This is the problem with manager: getting control over their resources that aims to meet their overall or precise objective while not doing away with other players in the company setting and spoiling the attribute of future associations.
Cyerth and March, 1963 (Pitelis, 2007) looked into real-life company decision making. This involved communications and conflict of interest that affected the company to a great extent. According to them, there existed several components of the company that were charged with several duties for a number of information that were necessary when making decisions. They did expect some form of double standards when it came to directing information because of perceptual variation in the smaller units and certain efforts to falter with details as a tool for changing the decision.
Consequently, Cyerth and March opted to look into the impact of a partial friction of wants in the two company subunits on the overall action. They found out that the decision maker does not come up with vital information on the choices and the anticipated payoffs. Conversely, the information is created by other sections within the company and communicated to the decision maker (Simon, 1990). Ultimately, from the observation, communication in a big company incorporates major double standards or biasing as well as bias rectification. Company members altered their communication when they saw the impact that it would result to. With no regard to the bias in communication that arises this way, the system is not completely bad. The biases that take place are noted be it long term or short term.
3. Decision Making Process
Before any decision can be made, there has to be a set of procedure that can is followed. The first one is the formulation of a judgment. According to studies done by Abercrombie (1960), there is a clear revelation of the in depth process in the advancement of a judgment and mental model, which is the model in the human mental aspect that makes it possible for information to be structured. As information is received by the person, it is well assessed so as to acquire connecting details. The mind may later the information acquired so as to make it connect with the prevailing assumptions. Any information that does not connect is turned down. Information that is received by a human being may not be received as it was originally but it is altered. The use of individual perspective leas to this sense hence the need for a bounded rational decision making process.
3.1. Identification of the Problem
Organizations are there to acquire certain objectives. Every department in a school has an objective in increasing productivity. Setting these goals are the grounds for new strategies. The setting of these objectives is the grounds for noting issues in the places of the company, settling on the method to use and assessing the decision results (Bazerman, 1994). The decision chosen is said to be successful if it is applied in meeting a certain a precise goal or set them for a company. The lack of meeting those goals leads to problems and the school management is bound to solve it.
The decision makers are conversant with the significance of noting the problem and comprehending the issue. Kepner and Tregoe (2005) came up with a way of assessing a problem where its identification is the top most. This has the impact on the quality of choice made. Generally the problem is analyzed in steps; its identification, definition, prioritizing and experimenting of the cause-effect connection.
The process of identification calls for keen focus by the inner and outside settings. The managers have the ability to do this. Data may be acquired from formal information systems like reports. Adding to this, the managers have to define the case since the situation is vital in other areas. A test is used to test the effectiveness of what has been applied.
3.2. Generating Alternatives
After noting the problem, coming up with other choices follows. Here the managers have to be precise on the objectives that they want to meet. If they want to limit the fall-outs in the staff, increase quality or other things, once this is sorted they look for other choices of meeting them. Data that is collected is vital and the managers acquire great amount of skills that will lead to success. The length of time that is allocated to each alternative relies on the cost that is to be used.
3.3. Assessing Alternatives
Here the managers look at a number of issues like; the effectiveness of the choices, and the implication. If the process of decision making does not meet these aspects it is bound to fail to manage issues that arise. The aspects of accepting these alternatives ought to be of concern to the principal. Basically even a poor choice may be successful if it is done with the commitment it deserves.
3.4. Choosing an Alternative
This follows through doing away with certain alternatives. This is done through going for the choice that most effective and agreed by all of the members (Gilboa, 2011). The manager applies this data with the help of able judgment which is based on the on the results of impact of the choices. Lastly the manager has to be able to select choices based on the advantages and disadvantages of the choices.
3.5. Implementing the Decision
The implementation of the decision is next and is hard with regard to the way it is done. Certain issues are hence taken into consideration: the managers have to be sure that the choice is well comprehended to every person involved, they have to motivate consent for the choice taken, sufficient resources have to be made available as well as the time periods and the allocation of the duties has to be done.
3.6. Evaluating Decision Effectiveness
In the implementation of the decision, there are a number of issues that do not lead to the expected results; this may be due to poor definition, below par assessment of choices and bad implementation. Evaluation is necessary since decision making is an ongoing process.
4. Application of the Bounded Rationality Model
According to the case above where there is poor communications and conflict of interest, the use of bounded rational model there is a probability of getting an amicable solution. Arising from mental aspect, there are cognitive tools that assist a person to understand issues facing a company, this calls for motivation. Taking into consideration the regular conflict of sounds, pictures and ideas, it is vital for the mind to spontaneously understand data to know what ought to be allowed and turned down. This is done by the cognitive heuristics (Dawes, 1988; Rachlin, 1980). At the end, the judgments are greatly impacted. This judgment may be attributed to be bad but they have helped decisions to be made. This allows persons to quickly approximate the probability that a result may take place or solve a problem.
A managerial decision making process is taken to be rational. This states that managers of companies come up with choices by being unsure. They are sure of choices, the results, decision model and the possibility for optimum choice and then apply it. This process is broken down into stages.
The rational decision making model attributes the decision maker as a being rational. A rational decision maker, a manager in the case above, ought to have perfect information. This incorporates getting awareness of the choices available, looking at the impact and coming up with a desirable scale (Hastie, 2010; Hicks, 2005). The process stated above has the ability to bring about the decision to every issue.
The situation in the company above shows that the company’s leadership is not aware of the issues that prevail and even in their presence they do not look for the best way to handle it. There is the restriction of time, cost and ability of managing information. They come up with a half-list of choices that would solve the problem from what they have gone through. The aspect of rationality is however restricted.
Bounded rationality is a model that in insufficient understanding of the real nature of the issue, the solutions that are acquired are never fully satisfactory, the choices have to be assessed as they are never fully accurate and the decision that is selected has to be grounded on a certain model.
The problem as noted above can be solved through sufficing. This model takes into consideration the first option that meets minimal levels of agreement without assessing all of the choices. The aspects of interests that varied players in the company may have are not 100% taken into consideration. This is the most common method that is applied by decision makers. According to Simon (1997), a good number of human decision making, be it personal or as a company is based on noting and choosing of the choice that is most satisfactory to the staff. As in the case above, it is not proper for the company to take into consideration all of the interests of every player in the company as this would hinder any advancement of activities. On the other hand, with regard to communication of information, it is necessary that the company takes into consideration that all of the staff and related departments are well communicated to with regard to all of the decisions that are made for effective and coherent operation.
5. Conclusion
Decision making is one of the important processes where a company’s top leadership is involved. The effectiveness of the organization is significantly connected to the choices made. The decision made takes into consideration choices. The procedure involves a number of processes; noting the issues, coming up with choices, assessing the choices, selecting the most effective choice, applying it and assessing the decision effectiveness.
The bounded rational method is of main focus. The model attributes the decision makers as being rational, going through perfect information to come up with decisions. The limitations of the decision makers and the company models where they are connected brings about restrictions on the decision makers aptitude in coming up with choices to process information vital to come up with complicated decisions which block decision makers to come up with answers that are not optimal.
6. Bibliography
Abercrombie, M. L. Johnson. (1960). The Anatomy of Judgement. New York: Basic Books.
Bazerman, Max H. (1994). Judgment In Managerial Decision Making, 3rd ed. New York: J. Wiley.
Dawes, Robyn. (1988). Rational Choice in an Uncertain World. New York: Harcourt Brace College Publishers.
Gilboa, I (2011). Rational choice. Cambridge, MA: MIT Press.
Hastie, R. (2010). Rational choice in an uncertain world: The psychology of judgment and decision making. Thousand Oaks, CA: Sage.
Hicks, M. J. (2005). Problem solving and decision making: Hard, soft, and creative approaches. Belmont, CA: Cengage Learning.
Kepner, C. H., & Tregoe, B. B. (2005). The new rational manager (rev. ed.). New York, NY: Kepner-Tregoe.
Pitelis, Christos (2007). A note on Cyert and March (1963) and Penrose (1959): A case for synergy. Published in: Organization Science , Vol. 18, No. 3
Rachlin, Howard. (1980). Judgement, Decision, and Choice, A Cognitive Behavioral Synthesis. New York: W. H. Freeman and Company.
Simon, Herbert A. (1990). Alternative visions of rationality. In Paul K. Moser (Ed.) Rationality In Action, Contemporary Approaches. Cambridge: Cambridge University Press.
Simon, H. A. (1997). Models of bounded rationality: Empirically grounded economic reason. Cambridge, MA: MIT Press.
