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ADOPTING THE RIGHT APPROACH TO DECISION-MAKING
APRIL 28, 1996 -
NEWS STRAIT TIMES
TWO weeks ago, we discussed the factors that influence the
decision-making process and the effects of making and
decisions. We invited readers to share their thoughts with us
on this.
# LOH WOOI LIP, ot Bousted Shipping, Kuala Lumpur, writes:
Decision making involves the pneration of alternative courses
of action after caretul evaluation ot the problem and the
variable factors that are relevant to it. Then the best ot the
options is selected.
In decision- making, we often encounter different situations,
such as the following.
1. Decision-making under certainty: This is when we have
complete information and the decision maker can envisage
exactly the outcome of the actions that will be taken.
2. Decision making under `calculated risk' This happens when
we have only partial information and when certain factors,
such as competitor activities, are beyond our control The
decision we take is with full awareness that the out come will
not be known. At best, we forecast certain events occurring
and pre pare to act according.
When we make manage rial decisions, the following approaches
may be useful.
a) Ethical and moral values
Decisions must be based on the principle of truth, ant not on
the sentiments and wishes of the majority. The populist
approach can not stand the test of time. As soon as the truth
is known, the old way will have to be changed.
It is important that managers have an ethical approach to
guide him from wrongdoings, such as the dumping or toxic waste
or effluents into streams.
b) Be reaponsible for the outcome
Decision-making is one of the core up aspects or managements.
Managers must take responsibility and be accountble for the
outcome of their decisions. Such managers will earn the re
spect of their subordinates and bosses.
c) Avoit hasty decisions.
It is dangerous to hastily draw a conclusion without
sufficient consideration, vetting or screening of some of the
"facts", as sumptions, etc. which could have a disastrous
impact or the outcome of the decision.
d) Knowledge based judgments
Managers must be armed with sufficient knowledge and
experience to tackle the situations they are con fronted with.
Such manag ers generally have better jutgments and therefore,
make better decisions.
e) Adopt the situational approach
In certain situations, managers can make better decision if
they seek the views and suggestions of their subordinates or
peers. In the case of subordinates, they feel a sense of
belonging if their views and sug gestions are considered. This
makes them more motivated.
In other situations such as emergencies, the au thoritarian
decision mak ing approach is more effective.
f) Think `cost effective'
Managers must always try to find the most economic way of
resource allocation and the most effective way at carrying out
a task. Company goals that are achieved with expenditures
beyond the budget only show the ineffectiveness of managerial
decisions.
Poor managerial decisions often occur in the area of human
relatlons Such decisions demoralise the staff, make them lose
their enthusiasm m for work and adopt a negative attitude
towards work. It is not uncommon to find dedicated workers
losing interest in their work because of biaased decisions
Eventually, some of them will resign to find jobs in
organisations where their vwork and pro ductivity will be
recognise.
The following are my comments to the tour anec dotes which
appeared In the New Sunday Times on April 7.
Anecdote 1: The CEO does an advertising agency
The CEO does not a sense of right and wrong. In promoting a
young and gorgeous ous woman accounts executive to accounts
manager when there are more senior and capable executives on}y
made the others unhappy. We can expect a drop in the quality
and pro ductivity of the firm in the short term. In the longer
term, the work culture of the agency will become "hardwork,
creativity and loyalty do not pay, as quality is not
appreciated or rewarded". Those who stayed behind will work
with low morale; those who resigned will create vacancies for
the CEO to employ more young and good looking female staff.
Anecdote 2: New young boss of restaurant
Raymond, has poor judgement. His immaturity is shown by the
fact that he only welcomes suggestions that flatter him.
Thorough he has an MBA, he lacks lead ership skills, knowledge
and experience in running a restaurant He centralises the
dicision making pro cess, holds meetings just to make himself
feel important, without knowing that his subordinates find it
difficult to accept his way of running the restaurant. It is
very likely that many se nior staff will leave and sig nal the
beginning of the res taurant's downfall.
Anecdote 3: Andrei, the managing director
At home, Andrel behaves like a mouse because of a domineering
wife. At work, because he is the boss, he lets loose his
bottled-up frustrations. He treats his staff just like his
wife treats him, ordering them around and making them feel
small.
Because of a deep sense of insecurity, coupled with the strong
emotional need to show off his authority in the office, we do
not expect Andrel to think objectively or to respond to
organisational problems professionally.
Antrel's weakness dls qualifies him from leading a team of
employees towards achieving corporate goals.
The growth and prosperity of organisations under such bosses
is questionable good and capable professionals managers will
not tolerate his emotional behaviour only those who re spond
to his whims and ban cles can work under him.
Anecdote 4: Celine's interview
From the case, it appears that the decision to appoint Coline
as executive secretary wah made in haste. Having verbally
offered the wst to Celine and retractng it within an hour is
unthinkable. How can the directors of this organisation make
strategic deciions when the way they handle the recruitment
exercise is so unprotesdonal and un ethical?
# WONG PANG LONG, faculty member of MIM, writes:
One of the most unno riced assumptions in mana gerial decision
making is that managers act and think objectively. Business
world realities demonstrate a lack of rational thinking when
it comes to making decisions. Too many decisions are
emotionally in spired, triggered by selfish motives such as
greed, ego or fear.
Most of us have heard of "management by objectives", a concept
pioneered by Peter Drucker. In the October 1995 edition or The
Amerfoan Management Assoctatfon Magazine, Drucker wu quoted as
say ing "Management by objectives works if you know the
objectives Ninety per cent of the time you don't. "
If top managements do not know their objectives so per cent of
the time, how are mlddlemanagers to make decisions? As we
know, the fit step in decision-making is knowing what you want
to achieve, or knowing our objectives"
The other four steps are:
(a) analysing, evaluating and synthessing all relevent factors
and facts.
(b) think of as many options, was abilities or alar natives as
possible.
(c) make your decision by choosing one course of action from
among the many option.
(d) implement your decision.
In his book Unfit to Manage!, Ernest D. Lieberman wrote that
captains of American industries percieve their employees,
especially union members, as enemies. This may sound
illogical. But perception does not belong to the world of
logic.
Because of top managements' altitude that employees "are the
enemy", many high-level decisions became came illogical. Some
of them are aimed primarily at breaking the backs of unions
Lieberman argued that vast sums of money and resources were
spent to weaken trade unionism and simultaneously reduced
productivity.
If management looks at labour "as the enemy", where to we find
the avenue to talk about trust or empowerment? Is it
surprising that such organisations can only get people to work
by using the commant ant control model? If we compare the
corporate cultures of such oreanisations, we will not many
similarities with those in the sweat shops of England during
the early days of the Industrial Revolution some 300 years
ago.
It is really up to corporate managers to decide whether or not
their decision-making skills are good enough. We have the time
to improve our skill in golf, tennis, public speaking,
salemanship and cooking. Improving decision-making skills is
not any more difficult.
And information on how we can be better decision makers is
easily and cheaply avaliable. In this age of information
ovefload, one way to achieve success is to be a skilful
decision-maker.
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