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Decision Making Across Organizations Published: Sunday, May 13, 2007 By: Dr. Manuel Ángel Morales

All my life, I have been fascinated with two organization theory problems: leadership and decision making.  Since I discovered these two organizational design challenges forty years ago, I have hold on to them, researching, structuring and applying these evolutionary concepts.

Decision-making is the essence of the leader’s job.  Every leadership task involves choosing among alternatives.  In planning, the leader must decide which strategy to follow; in organizing, which structure to adopt; in leading, which style to practice; in staffing, which candidate to select. 

Decisions change things, for good or bad.  The success of a leader depends in large measure on the consequences of his/her decisions.  As the late Chester I. Barnard instructed, the function of the executives is to decide well.  But as my beloved teacher Herbert A. Simon explained, decision making in many organizations has been heavily influenced by the application of formal logic to business.  The statement is that decision making operates (should operate) in sequence of steps.  1) Defining the problem. 2) Generating a range of potential solutions. 3) Applying systematic analysis to the potential solutions to predict which best will comply with predetermined criteria.  4) Choosing and implementing the best alternative.  These are the premises of traditional management thinking, defining decision making process as a linear programming, break-even analysis, cost and benefit feasibility studies, financial choices, and personal selection.  Even more, there are some professions or disciplines that pride themselves on the advocacy of the power of reason and logic, typically promoting and defending decision making on this basis.  However, life is full of contingencies, ambiguities and surprises, and sometimes it is impossible to follow a clear cut rationale. 

The work environment is full of ambiguous criteria or requirements. Not everybody understands the human elements that are present within all organizations.  Sometimes the problem is that what is the problem is not really understood.  There are many subjective components affecting the capacity to stick with the solutions or with the policies.  Often, there is no time to ponder fully every possible solution.

It is my experience that leaders work incrementally, moving toward a decision in small steps rather than performing a single powerful analysis.  They create heuristics (sorry I like word) it is simple rule of thumb which simplify the decision making task.  Leaders tend to satisfy, that is, they choose plausible alternative that they become aware of early, rather than continuing to look for the best alternative.  They procrastinate, they worry, and sometimes they avoid the decision altogether.  This means that leaders (as others human beings) are prompt to errors and in order to manage this condition they need by their side people who dare to speak truth to power and alert them about potential mistakes.  In the age of knowledge this private policy of speaking truth to power has to be welcome as a necessary routine for preventing mistake.  The more soundable and heterogeneous the knowledge base for decision making, the more rational they can get.

While discussing a potential decision, leaders should suspend, for the moment, their own belief in rationality (not to say ego defenses) as the basis for crucial decision making, and be mindful of the specifics affecting whatever is to be done.

The challenge is how to reinterpret rationality to accommodate habits and constraints that are an important part of the work environment.

Copyright 2007 QBS, Inc.
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