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Decision Making Approaches

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Autor:   •  July 23, 2011  •  2,714 Words (11 Pages)  •  1,071 Views

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I Introduction

A job for a leader is to make decisions. Most managers or executives have to engage in some aspect of decision making including coming up with ideas, evaluative alternatives, or implementing directives (Brousseau et al., 2006). However, it could be a critical issue for decision makers to build up proper decisions in various situations. Hence, how to adopt suitable technique in decision making processes is a significant text for them. This essay firstly is going to discuss the benefits of automated decision making due to improvement of technology, such as effective quality and services. Yet, abundant limitations including environmental changes and professional shortages will be illustrated in the next part. Furthermore, rational decision making process will be examined. Also, the article will compare the strengths and weaknesses between emotional approach and thinking first technique. The followings are two behavioural findings which emphasising on values, beliefs as well as hidden traps psychologically during the decision making process. Finally, a sort of cognitive approach- analogy- is emerging that can be valuable within novel and complex environment.

II Classical-

Decision making technology

In order to make decisions accurately and efficiently, technology has been developed for decision making processes. Devenport et al. (2005), and Edwards and Fasolo (2001) both examined that technology can reinforce the quality and accuracy of decision making with classical views. Initially, Devenport et al. (2005) outlined that state of the art technology can learn the expertise of knowledge engineers, despite the prior decision-support systems’ obstacles. The new applications do not need people to identify the problems or initiate the analysis. Additionally, they are typically triggered without human intervention. Alternatively, the technology can help organisations reduce labour, improve quality, and respond quickly to customers (Devenport et al., 2005). Edwards and Fasolo (2001) also stated that web-based technology provides recognizable aspects of decision making technology. For instance, browsing the World Wide Web can be a way for decision makers to get more comprehensive information. Technology development improves information input, making it easier to obtain current and more inexpensive information for all levels of decisions.

Nevertheless, there are numerous limitations of automated decision making systems. Devenport et al. (2005) indicated that current automated decision systems are best used for decisions that must be made rapidly and repeatedly such as bank credit decisions. However, the foregoing statements are in a prerequisite condition- there should be a high quality data available electronically. In the Devenport et al. (2005) study, clear criteria for determining is crucial. Moreover, managers are still involved in reviewing and confirming decisions in making actual decisions. Even the most automated systems still need experts and managers to produce and maintain rules and monitor the outcomes (Devenport et al., 2005).

Also, automated decision systems can be programmed to notice changes in the physical environment including the power supply, temperature or rainfall, so that they can quickly respond on the basis of rules (Devenport et al., 2005). However, it is costly to follow the micro- or macro-environmental changes for decisions in a business (for example, changes of legal-political element). Therefore, this point is inconsistent with the classical view, which is monetary- the source of motivation. Ultimately, one of the emerging management challenges for automated decision systems is expert shortage. As previously stated, this system needs someone to look after it. Thus, it is difficult to find experts to direct new systems. This occurs frequently in organisations when their internally trained experts leave for other firms or retire, because no one has used the applications long enough to address the problem (Devenport et al., 2005).

IIISystem-

Rationality

For modifying potential drawbacks of decision making technology, some styles of decision making by thinking and intuition have been created based on systems view. Hence, those decision making processes tend to adapt to the changing environment rapidly. According to Elbanna and Child (2007), environmental uncertainty does not affect the relationship between strategic decision making processes and strategic decision effectiveness. Moreover, the findings outlined that getting used to living with environmental uncertainty can lead Egyptian decision makers to discount the uncertainty while making decisions (Elbanna and Child, 2007). The following sections will discuss different decision making processes. The rational dimension will be presented first.

“Rationality is the reason for doing something and to judge a behaviour as reasonable is to be able to say that the behaviour is understandable within a given frame of reference” (Butler, 2002: 226 cited in Elbanna and Child, 2007; 433). Mintzberg and Westley (2001) also clearly defined rational process: define в†' diagnose в†' design в†' decide. Rational processes have been recognized as a core aspect of the strategic decision making approach in much literature (Elbanna and Child, 2007). Brousseau et al. (2006) claimed that “satisfiers” are ready to act as soon as they obtain enough information to satisfy their needs. Based on the concept, Brousseau et al. (2006) classified four styles of decision making: decisive (little information, one course of action), flexible (little information, many options), hierarchic (lots of data, one course of action) and integrative (lots of data, many options), according to two dimensions of information use and focus. In the thinking mode, executives can make decisions that are broadly defined and consist of multiple courses of action (Brousseau et al., 2006).

Successful managers in organisations are more analytic in their style while they progress in their jobs (Brousseau et al., 2006). Further, Elbanna and Child (2007) prove that rationality has a positive relationship with organisational outcomes.

Nonetheless, some constraints of rational decision making process should be pointed out. Firstly, in Brousseau et al. (2006) study, significant differences of global management culture are demonstrated. For instance, Americans stand apart in using a flexible thinking style more and more when they progress in their position, but the situation is reversed in Latin America. Thus, global management should be aware of differences

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