Forum (Spotlight Weekly)

Decision making styles in management

By Dr. Niranjan Prasad Upadhyay

Management and decision making: Management without decisions is just like a man without backbone. In reality, nothing can be performed without decisions. Every aspect of management functions i.e. planning, organizing and insisting the individual for the fulfilling of certain act is related to decision-making in a distinct manner. Decision–making is a crucial to management activities. It helps to set definite objectives, prepare plans of action, determine organizational structure, motivate employees and launch innovations. Decision attributes i.e. perceptual ability, information capacity, risk-taking propensity and aspiration level - are sufficiently pervasive. Bureaucracy is a professional corps of officials organized in a pyramidal hierarchy and functioning under impersonal, uniform rules and procedures. Nepalese management researchers highlight that leaders, administrators and managers who control power and national politics in Nepal can greatly contribute to the area of decision-making, policymaking and implementation. Particularly, a decision is a daily work of every manager. The worth of decision-making affects the survival of the organization.

What is decision making?

Decision-making is almost universally stated as choosing between alternatives. In organizational practice, when a manager plans, organizes, and controls, he or she prolongs to making decisions. Especially, decision-making, problem solving, and judgment imply both thought, and action. Decision-making can be understood as the process of thought and action that culminate in choice behavior. Especially, all these decisions are finalized within organizational environment. Basically, organizations are regarded as an artificial entity where resources (human, financial, material, managerial, time etc.) are employed as inputs with a view to use such inputs effectively and efficiently for achieving the targeted objectives.

Usually, scientific decision-making encompasses the following steps: (1) recognize and define a problem that calls for action, (2) determine possible alternative solutions, (3) collect and analyze facts bearing upon the problem, and (4) decide on a solution. In fact, recognition of personnel problems calls for experience and background, which makes observing and synthesizing the cues and clues into patterns of probable cause and effect possible. Generally, “brainstorming” and other artificial creative stimulants are applied to deal with personnel problems on occasions. A process called brainstorming has been offered as a method of facilitating the production of new solutions to problems.

Nepalese bureaucracy and decision making style

Most of the powers of all the individual ministers are, in turn, delegated to permanent secretaries and through them to other senior officials. The decisions taken by any official in respect with any matter on which he is authorized to take decision in accordance with the delegated authority within the framework of conventions and rules are considered as decisions of HMG. Generally, in HMG Ministries and other government departments every supervisor from the top executive down the line is an important link in the chain of the decision –making process. Organizational communication appears to be in an identity crisis in developing countries like Nepal (Administration and Management Review, 2001). In the context of Nepalese bureaucracy, there is no open communication between the top-level executives and middle level managers. Consequently, Nepali bureaucracy faces problems in decision-making, agreement with donor agencies, program formulation, negotiation, seminar and trade and treaty agreement. At the same time, in day-to-day official proceedings, there is a lack of teamwork, participation and computer-based information systems.

Psychological Studies and decision-making

The first psychological studies of decision-making relied heavily on normative decision models, using them as a point of departure for measuring subjective utilities and probabilities in choice situations (Friedman and Savage, 1952). Edwards, W.et al. (1966) state that psychologists were often optimistic about people’s capacity for making rational decisions. It was taken for granted that human decision-making could be modeled by theories of rational decision-making. Organizational psychologists believe that decisions concern choices among alternatives. The result of a decision is that an individual intends to perform some action. Though, there is necessarily a link between decision and action in as much as decision always points to some action. By contrast, choices are not necessarily linked to actions. Particularly, they are related to preferences. If an individual chooses alternative “A” over alternatives “B”and “C”, he or she has indicated that he or she prefers “A” to “B” and “C”.

In normative as well as descriptive models of decision-making, it is typically assumed that decision is based on attractiveness of particular aspects or features that characterize each alternative. Taylor and Dunnette (1974) have empirically examined the relative influence of a number of psychological attributes on decision-making behaviors. At least, four such attributes i.e. perceptual ability, information capacity, risk-taking propensity and aspiration level - are sufficiently pervasive that they affect decision strategies applicable to each of the environmental conditions.

Certain forms of thinking call on one’s ability to assemble and organize information. The result of such thinking satisfies a defined goal in the achievement of an effective solution to a problem. A simple form of realistic thinking that lends itself well to controlled experimentation is inferred from information of one’s ability to discriminate discrete objects or items of information. The outcome is a judgment, and the process may be called decision-making. The general theory of adaptation level, the decision- making response is considered to be a weighted average of various stimuli: focal, contextual, and residual. Variations in one or more of these three types of stimuli shift in judge’s decision in one direction or another in relation to his or her immediately preceding judgment.

Individual differences and Decision-making

The social and group norms exert considerable influence on the style of the decision maker (Ebert and Mitchell 1975). A social norm is an evaluating scale designating acceptable latitude and an objectionable latitude for behavior, activity, event, belief or any other object of concern to members of a social unit. In other words, social norm is the standard and accepted way of making judgments. Likewise, cultural upbringing and various cultural dimensions have a profound impact on the decision-making pattern of an individual .For instance, in Japanese organizational system; a decision maker arrives at decisions in consensus with others. This style is culturally oriented and makes implementation of the decision much easier, since everybody participates in the decision making process. In America, on the contrary, decision-making style is highly individualistic in nature. Psychologically, due to the individual differences, the way of perception differs. Accordingly, their aptitude, attitude and interest will vary.

Conclusion

Successful decision-making requires a rationale selection of a course of action. Generally, people acting or deciding rationally are attempting to reach some goal that cannot be attained without positive action. They must have a clear understanding of alternative courses by which a goal can be reached under existing circumstances and limitations. The importance of a decision also depends upon the extent of responsibility. Predominantly, decision-making is at the core of planning. In addition, decision-making is constrained by environmental factors that may be governed by choice of action. At the same time, creative and critical thinking is crucial for making effective and distinctive decisions.

(Dr. Upadhyay is a joint secretary at the Public Service Commission)