decision

Decisions are made everyday, and it is described as intelligently processing information that will result in rational decision making. A manager undertakes the responsibility of making rational choices by being logical and consistent in a decisive manner. Assessments of descriptive, normative, and behavioral decision theories will be the theoretical foundation of this paper. Also, the three different theories will be discussed in relation to teamwork, diversity, and the ethics of organization.

Main Conclusions

The theories examined in this paper illustrate three different types of decision making; each of them influences the process of decision making in an organization differently. The descriptive decision theory concentrates on the immediate solutions, while the normative decision theory has an idealistic standpoint - opposites of extreme. The behavioral decision making theory acts as a middle-man where its main purpose is to be the mediator between the descriptive and normative decision theory. In spite of their differences, all three theories share one common feature: rational decision in any give circumstances.

Recommendations

In order to run a successful organization, management has to understand the different theories behind decision-making process. Even though the theories are bounded by rationality, each theory values teamwork, diversity, and ethics at different levels. Thus, different levels of managements use different types of decision making process for the survival of the company. It is important to clearly distinguish the theories' boundaries and limitations to successfully decide which variables are important at each level of an organization.

Decision-making

Decision making is not specifically reserved for the management; is done daily by everyone. From choosing home appliances to family dinner preparations, decision making is a part of everybody's daily routine. To better comprehend the managements' role of decision making in an organization, three theories of decision making will be discussed: descriptive, normative, and behavioral theory. However, for the purpose of easy comparison and contrasts, the theories will be analyzed in relations to management types: i.e. technical mangers, organization managers and institutional managers.

Background:

Decision making is more than randomly choosing an option, but a cognitive process or a thought-out process to achieve rational decisions. Individuals, from all levels of an organization make decisions. Not all decisions are multifaceted, but their decisions affect their job securities as well as the organization's interest. A successful decision making process involves rationally analyzing the problems to achieve the most efficient choice that will compliment the situation. According to Walls "the premise behind rationality in organizations is based on the notion that reasonable people will respond to their environment by assessing known facts, estimating possible outcomes, and weighing those outcomes against their respective costs Decision making process differ from one level of management to another, however, they all share common responsibility; rational choices that are consistent, and "value-maximizing choice within specified constraints

Descriptive Theory

The descriptive or positive theory is a black-and-white concept where individuals visualize how things are rather than how things should to be. Descriptive theory focuses on the choices made in a situation, and considers decision as a single event According to Shrode & Brown, the "descriptive decision theory is based on describing, as precisely as possible, the actual decision-making behavior of the decision-maker" and "how people...make decisions". In a relation to management type, descriptive theory is associated with the technical managers, where their primary concern is to solve problems immediately and "have a short-run time horizon" Computational decision making strategies utilized by the technical managers allow them to solve problems swiftly and effectively since the solution to problems are accomplished by "computing various types of input and output data, and then manipulating the data in accordance with the criteria of rationality" According to Petit, solutions to technical managers problems are "quantitative in nature" and "concerned with concrete problems that require immediate solutions"

Normative Theory:

The normative theory, also called prescriptive theory, narrates how things should be, and lean towards philosophical approach in decision making. This particular theory utilizes well informed and rational individuals to organize alternatives that will lead to a successful end result that will benefit the organization in the long run. The normative theory carries ethical responsibilities as well as guidelines to seek optimum solutions. Thus, the normative theory "attempt to describe the behavior (or hoped for behavior) of a human decision maker...who wished to use intellectual tools to make decisions". In relations to management type, normative is closely linked with institutional managers (IM) because they "have a philosophic point of view" and "rely in wisdom, experience, and philosophic insight in making important decision." Decision strategy for institutional managers' are judgmental because IM "have a long-run time horizon...The future is always hard to read and is highly qualitative: therefore it is interpreted subjectively." Institutional Mangers' primary responsibility to the firm is to insure firm's survival by managing uncertainties of firm's environment.

Behavioral theory

Behavioral theory implicates how people deal with uncertainties, and takes into an account both the descriptive and normative theories. Behavioral decision theory is bounded by rationality of the world, and the decisions are made based upon decision-maker's perception on given situation. According to Brooks, Highhouse, et al, "behavioral decision...has shown that people's judgment do not always derive from their underlying beliefs, but rather from the need to formulate their opinions as a result of having to express them." According to Petit "behavioral theory of management has most in common with the social system school...social system school focuses on the organization and what we have called the organization level of management" The organizational managers synchronize technical and institutional managers' transactions by acting as the mediator or an intermediary. Thus, the decision-making strategy of an organizational manager is to compromise in the interest of organizational viability.

Theories in relevance to teamwork, diversity, and ethics

Depending on the level of management or the structure of organization, variables such as teamwork, diversity, and ethical factors might illustrate an issue. It can increase the complexity of management's decision-making issues. However, incorporating the variables into different management decision-making can increase open-line of communication, generate additional alternatives and ideas, and increase accuracy.

The descriptive decision theory focuses on immediate resolution of problem with little or no concerns to ethical issues, teamwork, and diversity. This is mainly due to the fact that the speed and the efficiency of decision-makings are valued rather than comprehension of knowledge and ideas. Descriptive theory is "concerned with the choices actually made in a given situation." Even though this approach will eliminate miscommunications and speed up the reaction process, it will limit creativity, and can only be helpful in achieving short-term goal.

The normative theory is committed to ethical approach of management and relies on the "wisdom, experience, and philosophic insight" of people. In an Industrial Engineer: IE article, "A diverse group of people is likely to outperform...and brightest problem solvers...offer different perspectives that...result in better solutions." Since this approach deals with the long-term goals, it is important to utilize diverse teamwork's wisdom, knowledge, and rationality. Such integration of diverse employees may create a better platform for effective results.

In this particular approach a balanced and optimized reliance on all factors is possible and viable. Behavioral decision making process is political in nature because it acts as a mediator for both descriptive and normative decision making. It deals with uncertainties to make a best possible choice under given circumstance.

Future Trends:

Decision will be made at all levels of an organization, but the question of making the "right" decision will be based on the quality of teamwork, diverse work environment, and commitment to ethical choices. Managers and the employees have a social responsibility as well as the desire to survive, thus creating a natural environment which requires the greatest possible efficiency.

Limitations, Conclusions and Recommendations:

The three theories of decision making are generally different, but they all share one common goal: making rational decisions. While the descriptive theory focuses on how things are, the normative theory concentrated on how things should be in a philosophical way. Behavioral theory, on the other hand, stands in the middle of descriptive and normative theory in order to counter-balance their strengths and weaknesses of decision making. There is no right or wrong method to decision making because it all depends on the type of management, type of an organization structure, and the goals. In a large organization, it is necessary to have all of the three theories available to achieve both the short and long term goals set by the company: successful organization should deploy all legal and ethical tools in order to maximize efficiency and effectiveness. This will ensure the greatest possible platform for organizational success and survival, which in turn creates a platform for responsible corporate governance and increased satisfaction of all stakeholders.

Shouldn’t a person undergoing both physical suffering and emotional disorder be given a choice to stop the suffering? A negatively conditioned patient with an entreaty to stop suffering should not be shunned only because people around him or her are not undergoing his or her version of terrible pain. Healthy people do not realize how these fatal illnesses can torture a person slowly until his or her death.

Other people who suffer are loved ones to those people who have brain damage and have stayed in a vegetable or coma-like state and have no chance for recovering. These kith and kin are put to fight against the mental disorder of the suffering loved one for they can do nothing but watch in graphic horror how life slowly leaves him or her. At times there were members of families who have hold their own and have decisions concerning what would be best for the situation.

There have been a lot of cases having deal with accomplishment of euthanasia that have proven worthy in its favor to make a new law concerning euthanasia. A case in the year 1976 concerning Karen Ann Quinlan caused many more supporting viewpoints to this concern. Karen had taken an overdose of medicine and was put to an unalterable vegetable state; it is one of many cases when was made a decision to end her life owing to a fatal illness. Evidently, with no opportunity to speak for herself, mother of Karen was the one to oppose the active treating physicians on what the result of Karen’s life would be. Seeing that her child had no positive perspective, Karen’s mother said that did not want her daughter to live without living. The court endorsed this decision made by the maternal parent.

If you hear a voice within you saying 'I am not a painter,' then, by all means, paint... and that voice will be silenced."
Vincent van Gogh

First time I learned about voices in my head was on NLP Practitioner training with Richard Bandler, Paul McKenna and Michael Neill. Dr Richard Bandler, co-founder of NLP, was taking us for a journey of 20,000 leagues under the conscious and there it was - my storyteller.

It resides in my left ear, has strong arguments for why it is safer to stay in the known, not to risk, not to say what I think, how I feel - that is when my story teller is tired and sitting in the corner of my head wrapped in darkness of doubt and fear. There is another side to it too: proud, judgemental and forceful, giving me reasons why I need to push for the immediate results and resolve matters by fighting ego fight.

The insight wouldn't be complete if I didn't discover the other side (as you may guess - it lives my right ear): the silent voice that often says just "yes" or "know". It caresses me gently with calmness and joy.

It took a bit of practice and determination before I mastered the language of two which didn’t only consist of the sounds but also images, feelings as well as tastes and smells (called submodalities in NLP). Working with internal dialog is a continuous journey – as new situations present themselves new opinions are formed and final learning will depend on how skilled you are to distinguish what images, feelings or sounds you create when you make right and what kind of the submodalities you use to make wrong decisions.

How to define your decision-making strategy:

Think of a purchase you made recently that you ended up being happy with. Answer the questions below to define submodalities you had when you made that decision. The more details you have the better you will know what is your good decision making strategy. When you answer these questions think of a purchase you made recently that you ended up being unhappy with. Use the same questions to define submodalities and compare how were the two decisions same or different.

Questions:
Visual:
How many images did you see?
Are they moving or still images?
Do you see them in colour or black & white?
Are they bright or dim? Focused or unfocused?
Are you an observer or do you see yourself being in the image?
What is the size of the image (relative to life)?
Is it 3D or flat? Close or distant?
What is the location in space?

Auditory:
What is the number of sounds? Where are they coming from (your ears, head, outside – inside, other parts of your body)?
What is the volume (loud, faint)?
What is the tone, pitch and pace?
Do you hear it in more in one ear than another?

Kinesthetic:
What is the location of the feeling in your body?
What is your breathing rate?
Skin temperature?
Do you feel any tactile sensations?

Olfactory & gustatory
What was the taste you felt (sweet, sour, salty or bitter)?
Did you feel any smell (fragrance, essence pungence)?

The issues and reasons behind decision making are of great interest to me. I have written many articles on the subject over a long period of time. The below article looks at decision making from an economic point of view. If you wish to read some more of my articles please visit ITS Tutorial School website at http://www.tuition.com.hk/links.htm .

How do individuals and businesses in society make decisions? From the viewpoint of an economist there are three basic assumptions. Rationality, maximization and costs & benefit analysis.

Rationality: Economists start by assuming that economic decision makers act in a rational manner. What this means is that decision makers act according to reason, rather than in any odd way. For instance, if a person wanted to increase his or her income, it is assumed that he or she would try to work longer hours, rather than shorter hours. Equally if there were two identical products of washing detergent on the supermarket shelf, one price at $5.00, the other on sale at $3.00, it is assumed the shopper would buy the cheaper packet.

Maximization: A second economic assumption is that economic decision-makers attempt to maximize. This means that they try to get the best out of any economic situation. If a person chooses to work for 38 hours a week instead of 40 hours, everything else being the same including the wage, then he or she will choose to maximize leisure time by working 38 hours. Equally, a business will prefer to earn as much profit as possible, rather than a lower profit as possible.

Costs and benefits: In order to decide what is biggest in any economic situation, a decision-maker has to asses the costs and benefits of any particular course of action. For example what would be the costs and benefits of a decision by workers to buy a factory that they worked for if it was about to close down? The costs would be the money they had to put up to buy the factory from its owners. However, costs could be even greater. If the factory started to make a loss, they could not only loose all their money they had put in the firm but may have to commit more money to keep it going. Another cost would be the lost opportunity to find a new job. The benefits would be that they would still be in a job. They would get a salary. What s more if the company were successful, they would get a share of the profits and see the value of their initial capital investments increase.

These costs and benefits relate to the individual workers who are making the decision about weather to buy the factory. The economic model of decision maker than assumes these workers would decide to support buying or not buying by weighing up these costs and benefits and making a rationale decision about how to maximize their individual utility. This is the basis of an economic decision making model.

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Decision making is not an easy process. It requires well-planning, strategic understanding, and thorough insights to complete a process and to yield the desired results. In this article, we’ll talk about top five levels of leadership involvement when taking a worthy decision to accomplish a desired goal:

Level One: Leader Makes the Soul Decision:
The best thing about being a leader is that they possess the ability to take individual decisions in case of any emergency situation where immediate action is required. These people do not require additional support, others input, and immediate compliance to get the things gets done.

Level Two: Leader Count Opinions of Key Stakeholders:
In a team building activity, often a leaders needs to have inputs just to cover blind spots and increase the productivity of the work along with the insight understanding of the issue to be tackled. A good leader always seeks important information and detail from key stakeholders just to make a solid decision.

Level Three: Leader Initiates Consensus Formation:
In a corporate event, a leader needs to establish consensus in a team just to ensure a fruitful decision to be carried out for the accomplishment of the final goal. He possesses skills and ability just to convince others to get the benefits by approaching a particular process.

Level Four: Leader Delegates the Right Decision to Others:
In a team building activity, a leader carefully delegate the responsibility and authority of decision to others. He needs to act as a bridge between the whole team just to produce the desired results.

Level Five: Clear Understanding:
The duty of a leader is to judge the pros and cons of a situation, he then informs other team members about the prospective situation. He usually delegates the decision to a group.

Decision making is a intellectual process and requires thorough understanding, excellent communication skills, and other abilities just to make the working of a team truly profitable.

Not sure what to do? Try the following seven step decision making process the next time you need to make up your mind about something important. And take notes!

1. What are your immediate intuitive feelings?

Make a few notes about your immediate "gut reaction." For example, if you're not sure whether to take a particular job, ask the question, "Should I take this job?" Then jot down whatever comes to mind and how you feel about it.

2. Analyze your intuition.

Even the most intuitive people can't trust their intuition all the time. At best, intuition is the use of all the unconscious information and experience you have. At its worst, it is just feelings based on faulty thinking, greed or fear. Look for these other motivations before relying too heavily on intuition. You want the intuition that is simply an efficient use of your unconscious resources.

3. Gather information.

With or without any intuition, you should always gather information before making a decision. Take notes. Even for a decision like where to go for vacation, you can write down the costs of the various choices, and what things you'll be able to do at each destination.

4. Look at the pros and cons.

What is good about each possible choice, and what is not so good? Write these things down. For any uncertainties, good or bad, write a note about whether the risk or possible reward is "not very likely," "likely," or "very likely."

5. Consider worst and best cases.

For each possible choice, consider the worst that could happen, and the best that could happen. Which is more likely? How do the various options appear when considered this way?

6. Revisit with intuition.

Review the information you have gathered, and everything else that you have considered. Then make a few notes about how you think and feel about your choices now. This is an important next-to-last step in the decision making process.

7. Choose and act immediately, then adjust course if necessary.

You can be slow about gathering and analyzing information. But at this point - after your second intuitive assessment - it's best to make a decision quickly. Any decision making process should lead inexorably to a decision, or else you are actually training yourself to be indecisive - which isn't very useful, and can be very stressful.

Once a decision is made, you should also act immediately, even if this is some small step. For example, if you decide to write a book, you should turn on the computer and write the first line, or put the pen and paper on the desk. Immediate action trains your mind to treat your decisions as meaningful, and not just wishful thinking. It is an important part of the whole decision making process.

Plan for the long term!

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It has been observed that many borrowers tend to prepay their home loans in as little as eight years or so. But most borrowers seek long tenures of 18 to 25 years, as online guaranteed instant decision loan would be unaffordable otherwise. But a span of two decades is a very long period. Varied financial needs and commitments may spring up at varying points in one’s life. Adding to this are medical emergencies and other unanticipated expenses that can crop up anytime.

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Avoid other new debts like vehicle loan during the initial period of home loan with instant decision guaranteed. As the years roll by, your salary is bound to increase. So if the current EMI is 30% of your salary, in the next few years it could be only 25% of your take-home. It is only then you should consider other new loans.

Cut expenses

For those who are deep in debt, there are certain luxuries in life that they can live without. Spending money prudently till you’ve paid back all the borrowed money is the only way to prevent defaulting.

Define goals

Do you want to save enough money for your retirement needs? Then invest regularly. Keep inflation in mind before you choose an investment product. Ensure that your rate of return on investments is greater than the rate of inflation. Set aside money regularly in instruments that you can easily make liquid in case need arises. Invest early, regularly and with a long-term perspective. Seek help online for guaranteed instant decision loan.

I used to be afraid of making decision. Why? This is because I am afraid to make the wrong decision. When a situation arise that require my decision, I will procrastinate and drag to make the decision. As time goes by, this becomes a bad habit. In fact, this habit nearly endangered my life a few times.

When I started to learn driving, I carried this habit of indecisiveness on the road. In one of the situations, the car in front of me suddenly stopped at a distance. I needed either to slow down and stop or to change to another lane. While I was struggling to make the decision, my car was still moving at the same speed. Luckily, I managed to realize that in the nick of time and quickly stop the car just before it had a chance to crash into the front car.

Indecisiveness is dangerous. Because of this indecisiveness, I was not able to clear the driving license test for the first three attempts. Finally, I cleared my test in the fourth attempt. Though I was very happy to get my driving license, I realized that I had spent a lot of money and efforts. If I could be more decisive right at the beginning, I would have saved considerable money and efforts.

Another thing that I have learned is that indecisiveness costs me opportunity! In the above example, if I had decided to change lane or stop my car, there would be no issue. But if I would to continue struggling with the decision-making and not paying attention to the slipping opportunity, I would have ended up crashing into the car in front of me.

Another example on how indecisiveness can cost you a gold opportunity. Imagine that someone had offered to exchange a $50 note for $1 coin to the audience. And you were part of the audience. Here was a golden opportunity to earn $49 by simply exchanging money. Would you be able to make up your mind quick enough so that you were the first one to exchange the money with him? Or would you delay making up your mind because it is too good to be true?

If the offer was true and you were still struggling to come to a decision, then you would loss a golden opportunity if someone else had made up his mind faster than you to capitalize on the opportunity. Thus, it is important that one must be able to make a quick decision while the opportunity is still there.

The idea that I will like to share with you:
Learn to make quick decision so as to capitalize on golden opportunity

* DISCLAIMER *
The author, publisher and distributors particularly disclaim any liability, loss, or risk taken by individuals who directly or indirectly act on the information contained herein. All readers must accept full responsibility for their use of this material.

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