Managerial Decision Making Essay Example

  • Category:
    Business
  • Document type:
    Essay
  • Level:
    Undergraduate
  • Page:
    2
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    1049

?• Why is perception important in the decision making process
Managerial Decision Making

Perception can be defined as a process through which a person organizes and interprets his or her own sensory impression for them to give meaning to their surroundings (Robbins, 2005). Humans construe things they hear, touch, see, smell and taste into something that create logical sense. Ultimately, each one of us smell, feels, hears, sees or tastes things differently. Consequently, perception is an important element in the process of making decisions for individual or organizational purpose.

The choices individuals make may result to success or distress in an organization. Perception is not always right in making decisions as some perceptions are like illusions. For example, everyone feels what they wants to feel, tastes what they want to taste, sees what they want to see or smells what they want to smell. However, perception is an important aspect in making decisions. Making choices based on perception may lead to success as one follows what he construes even though it may not be a fact. Nevertheless, perception may shape the ethical decisions that we make, especially when it comes to judging others.

?What are the relative advantages and disadvantages of group decision making versus individual decision making
Nominal and Delphi groups appear to be more effective and clear in problem solving and reaching to a comprehensive decision than the interacting group. In interacting groups, spontaneous group discussions are involved. People in the group are expected to think together and come up with a solution or make a decision. As a result, the group is synchronized to a common decision, not because it’s satisfying but because it suits and is accepted by the others. In most cases, interacting groups seek to avoid personal responsibilities. Each member wants to be safe; as in making a decision that will have minimal risks and that cannot attach responsibility to anyone. Alternatively, Delphi or nominal groups concentrate on individual’s silent efforts in making a decision or solving a problem. This individual thinking for the group purpose is effective in making a decision and reaching to a serious conclusion. According to Andrew and Andre (1971), the effective formula for a group decision making entails three simple stages which include: (1) the use of Delphi or nominal group procedures for finding facts, generating ideas or initial estimation of subjective probability in the first phase of the work of the committee; (2) utilization of structured feedback and group discussion in phase two; (3) the application of nominal group voting for the ultimate independent individual judgment in the last phase. In nominal groups, each member of the group has the autonomy of making their own views known to others and allow for consultations. Consequently, the voting process allows the majority to decide upon the selected choices (Frank, 1999). However, the minority must also be accommodated by ensuring that the features that are bringing about controversy are modified to suit everyone. Thus, nominal or Delphi groups are in a better position to make original decisions as compared to interacting groups.
.An interacting group is less likely to make original decisions that nominal or Delphi groups. Discuss
In real world organizations, decisions are made on restricted rationality. Humans mind capacity according to Robbins (2005) for solving and formulating complicated issues is far too minute to fulfill the requirements for full rationality, hence, individuals operate within confined rationality. Ethical making of decisions is dependent on perception.

Advantages of group decision over individual decision

Group decision making is advantageous due to the diverse strength and professionalism of its members. The group enjoys each and every member’s unique qualities which gives the group a myriad of alternatives and quality alternatives than in individual decision making. Hence, the group will likely reach to a better solution or decision than an individual (Nelson & Quick, 2000).

In addition, making decisions as a group enhance the implementation process. Each member’s involvement in reaching a decision have their ideas incorporated in reaching the decision, hence feel accepted and honored to be part of the implementation process. In individual decision making, one person’s decision may not be embraced by everyone and may be perceived as a personal interest rather than for the interest of the organization.

Disadvantages of group over individual decision making

Obviously, the process of making a decision as a group is very slow as compared to decisions made by an individual. Sometimes, it is completely difficult to utilize group decision making process in a circumstance where decisions need to be reached quickly. In individual decision making, the process is quick and can save emergency situations as no consultation is required.

Groupthink is another major limitation of group decision making. Groupthink as defined by I Janis (1972) is the weakening of mental efficiency, reality testing, and ethical judgment that result from in group pressure. Groupthink happens when members of the group feel pressured to agree with what seems to be principal view of the entire group. Disagreeing opinions of the majority are concealed and alternatives are not explored to the fullest.

In group decision making, group polarization is a possible disadvantage. This refers to the propensity of the group to congregate on extreme solution to an action. A good example of polarization of a group is the risk shift phenomena (Luthans, 2005). This happen when the decision reached by the group is riskier than would have been made by any of the individual members. This occurs because group members do not feel accountable or responsible for the group’s actions as they would if they made the decision individually. In individual decision making, one is accountable and responsible for the course of action, hence, decisions made is more comprehensive as it takes into account all the possibilities and possible outcomes.

References

Andrew, V. and Andre, L. 1971. Nominal versus interacting group process for committee decision making effectiveness, The Academy of Management Journal, Vol. 14, No. 2, 203-207.

Frank, Harrison. 1999. The Managerial Decision-Making Process, 5th Edition. North Beach: San Francisco State University.

Janis, I. 1972. Victims of Groupthink. Houghton Mifflin: Boston.

Luthans, F. 2005. Organizational Behavior, 10th ed. McGraw Hill Irwin: Boston.

Nelson, D.L., and J.C. Quick. 2000. Organizational Behavior, 3rd ed. Australia: Southwestern College Publishing:

Robbins, S. 2005. Organizational Behavior, 11th Edition. Prentice Hall: Pearson Education.