Introduction to Decision Making Styles

Decision making is a daily activity for any human being. There is no exception to that. When it comes to business organizations, decision making is a habit and a process as well.

Usually, decision making is hard. The majority of corporate decisions involve some level of dissatisfaction or conflict with another party.

Introduction and Case Study:

Omar Khan works as a Project Manager in Technoscape Software. Omar is known for his highly emotional nature as well as impulsive actions and decisions. Being highly emotional in nature, most of the times Omar tends to make his decisions based on his emotional reaction to the situation in hand.

This emotion-based decision making greatly hampers Omar’s managerial capabilities. In a recent project, there was a shortfall of resources for developing a large software for a reputed bank.

Omar decides that he would need an extra developer who can be hired as a vendor for this project. Sara, the HR Executive who takes care of vendor recruitment shortlists a few vendors who have worked with Technoscape Software in the past.

However, Omar rejects the shortlisted candidates and asks Sara to hire Mohammed as a vendor for this project. Mohammed is a freelance developer who has worked as a vendor on several projects with Technoscape in the past.

Sara tries to convince Omar that Mohammed is not suitable for this particular banking project. Mohammed does not have any experience working on banking-related software and does not hold expertise in Python language which is a must for this particular project.

Omar is adamant about his decision and tells Sara that he has worked with Mohammed in the past and is most comfortable working with him in a client-vendor relationship. He does not want to work with anyone else.

Mohammed gets selected as a vendor for the bank project. However, Omar soon finds that Sara was right. Due to lack of experience in the banking domain, Mohammed is lost on many aspects of the software to be developed as he has never seen a banking software.

He also finds it extremely hard to fix programming errors that arise during development due to his lack of expertise in Python.

As a result, the project gets delayed and Technoscape has to pay the client, a penalty for not being able to complete the project on time. Omar regrets his decision as it was not based on sound reason or logic but on emotional attachment to Mohammed.

You can see how the right kind of decisions can make or break a situation. It decides the entire future course of a situation or person’s life.

There are many kinds of decision-making styles that people follow.

Let us learn about the various Decision-Making Styles in detail.

In this course, we will go in-depth on the following topics:

Course Objectives:

1. Explain What is meant by a Decision
2. Explain What is meant by Decision Making
3. Define Decision Making
4. Describe the Importance of Decision Making
5. Explain Steps of Personal Decision Making Process
6. Explain Organizational Decision Making Process
7. Explain the Individual and Group Decision Making Styles

1- Explain What is meant by a Decision

What is meant by a Decision?

• A decision can be defined as a course of action purposely chosen from a set of alternatives to achieve personal, organizational, or managerial objectives or goals.
• The decision-making process is continuous and an indispensable component of managing any organization or business activities.
• Decisions are made to sustain the activities of all business activities and organizational functioning.
• Decisions are made at every level of management to ensure organizational or business goals are achieved.
• Further, the decisions make up one of the core functional values that every organization adopts and implements to ensure optimum growth and drivability in terms of services and/or products offered.
• As such, the decision-making process can be further exemplified in the backdrop of the following definitions.

2. Explain What is meant by Decision Making

What is Decision Making?

• Decision-making is an integral part of modern management.
• Essentially, rational or sound decision making is taken as a primary function of management.
• Every manager takes hundreds and hundreds of decisions subconsciously or consciously making it the key component in the role of a manager.
• Decisions play important roles as they determine both organizational and managerial activities.

Any decisions taken at any level have to take into account the conflicting needs of the individuals who are affected by the decisions and hence conflict resolution is a part of the decision making the process.

3. Define Decision Making

There are various definitions of Decision Making, such as:

According to Oxford Advanced Learner’s Dictionary:

“Decision Making means the process of deciding about something important, especially in a group of people or in an organization.”

According to Trewatha & Newport:

“Decision Making involves the selection of a course of action from among two or more possible alternatives in order to arrive at a solution for a given problem”.

4. Describe the Importance of Decision Making

‘Decision-Making’ process is a consultative affair done by professionals to drive better functioning of any organization. Thereby, it is a continuous and dynamic activity that pervades all other activities pertaining to the organization.

Since it is an ongoing activity, the decision-making process plays vital importance in the functioning of an organization. Since intellectual minds are involved in the process of decision making, it requires solid scientific knowledge coupled with skills and experience in addition to mental maturity.

Further, the decision making process can be regarded as a check and balance system that keeps the organization growing both in vertical and linear directions. It means that the decision making process seeks a goal. The goals are pre-set business objectives, company missions, and its vision.

To achieve these goals, the company may face a lot of obstacles in administrative, operational, marketing, and operational domains. Such problems are sorted out through a comprehensive decision-making process.

No decision comes as an end in itself, since it may evolve new problems to solve. When one problem is solved another arises and so on, such that the decision-making process, as said earlier, is continuous and dynamic.

5. Explain Steps of Personal Decision Making Process

"Personal" Decision-Making is different from that of "Group" Decision-Making. Let's go through the Personal section here and we will cover the Group section later.

The decision-making process for personal purposes involves the following steps:

I can't go in detail here but the course will do. This course is free, please inquire.

Pros and Cons of Individual Decision Making

Individuals have a tendency to think and question before performing. This is fruitful in the analysis and forecasting of an individual’s behavior.

Individual decision making has certain pros and cons, few of which are mentioned below:

Pros of Individual Decision Making

An individual generally makes prompt decisions. On the other hand, a group is dominated by various people, hence, making decision-making very time consuming. Moreover, assembling group members consumes a lot of time.

Individuals do not escape responsibilities. They are accountable for their acts and performance. While in a group it is not easy to hold any one person accountable for a wrong decision.

Individual decision making saves time, money, and energy as individuals make prompt and logical decisions generally. While group decision making involves lot of time, money and energy. Individual decisions are more focused and rational as compared to group.

Cons of Individual Decision Making

A group has the potential of collecting more and full information compared to an individual while making decisions. An individual while making any decision uses his own intuition and views. While a group has many members, so many views and many approaches and hence better decision making.

A group discovers the hidden talent and core competency of employees of an organization. An individual will not take into consideration every members’ interest. While a group will take into account the interest of all members of an organization.

6. Explain Organizational Decision Making Process

Effective and successful decisions make a profit to the company and unsuccessful ones make losses. Therefore, the corporate decision-making process is the most critical process in any organization.

The decision-making process for organizational purposes involves the following steps:

‘Decision Making’ process follows the above sequential steps, and hence a lot of time is spent in this process. This is the case with every decision taken to solve management and administrative problems in a business setting. Though the whole process is time-consuming, the result of such a process in a professional organization is magnanimous.

In organizations, leaders may sometimes need to take Programed or Non-Programed decisions. Programmed decisions are concerned with repetitive problems of a business that call for particular policies, procedures etc. On the other hand, non-programed decisions deal with such situations that occur unexpectedly which in turn are referred to the top management.

Decision Making Styles

Many people follow different decision-making styles and most people follow more than one style while making a decision. The major decision-making styles are:

• Individual Decisions
• Group Decisions

Individual Decisions

Individual decisions are taken by a single individual. The one-manager decision-making set up is still prevalent as many business units are owned by a single individual. But when business grows in size and complexity it may not be possible for one individual to take all the decisions himself.

There exist so many styles for Individuals and here are a few of them:

Details are covered in the full course

Group Decisions

Let’s look at each in detail.

Autocratic Group Decision Making Style

Autocratic leadership is one in which the leader takes final control and responsibility for the choice. The leader is totally in charge of the outcome that results from the decision, regardless of whether that result is positive or negative.

The imperious leader does not request proposals or thoughts from the group and chooses in view of their own inward data and impression of the circumstance. Utilizing this strategy creates a quick choice for which the leader is by and large mindful. In a crisis circumstance, this dictatorial style is frequently the best decision.

The shortfall of this style is that the leader only relies on his own thinking and decision making and ignores others. Such decisions can be rash and fail to consider other options when addressing a problem.

Autocratic decision-makers focus on short-term results instead of long-term solutions. In the event that the aftereffect of the decision is not positive, individuals from the group may start to feel angry and trust they could have made a superior decision as a group rather than the leader himself did. This can make the leader lose esteem and trust.

Just Group-Decision Making Style

Vote based collective choice-making can be helpful when a speedy choice is required using a base measure of group cooperation. In this style of cooperative decision making the leader surrenders proprietorship and control of a choice and enables the group to vote.

As the name infers, the majority share vote will choose what move is made.

The shortfall of this style can be an absence of individual responsibility and obligation. There is no individual that can guarantee action based on the decision made by the group.

Since there is not a prerequisite for an agreement, it opens up the likelihood that somebody will deny action, since they voted against the cooperative group’s choice.

Aggregate Group-Decision Making Style

In this style of cooperative choice-making, the leader will include the individuals from the association in all parts of the basic leadership decision making, yet settles on an official choice alone.

The leader intentionally asks and urges group individuals to take an interest by giving their thoughts, observations, learning, and data concerning the circumstance. This conveys to light different points of view on the circumstance despite the fact that the leader keeps entire control of an official final decision.

Accord Group-Decision Making Style

In the accord basic leadership style, the leader surrenders the final control of the decision. The entire group is completely included and contributes to making the choice. There is no individual responsibility regarding the leader utilizing this kind of collective choice-making.

This style contrasts with the equitable style in light of the fact that everybody must concur on the choice. On the off chance that there is not add up to consensus by everybody, then the decision is made based on popularity.

Summary

In general, the decision-making process helps managers and other business professionals solve problems by examining alternative choices and deciding on the best route to take. Using this step-by-step approach is an efficient way to make thoughtful, informed decisions that have a positive impact on your organization's short- and long-term goals.