Research Paper on Business Decision Making: The Key to Long-Term Success

Introduction

The business decision making involves an ongoing process of analyzing the business situation, identifying the options, and making the choices. The effectiveness of decision making ultimately determines the success of the company. It is, therefore, dependent on the availability of the right information to the relevant people (Nunnington, & Haynes, 2011). It is a crucial element in ensuring the company's success. Knowledge-based decisions steer the company towards long-term success. The concept of decision making involves choosing among the alternatives. The elements include the problem context, problem finding, setting the agenda, and problem-solving with the included alternatives. The process is categorized into individual and group decision making. A single individual takes individual decision making while a group of individuals carries a group process. Today's business environment has increased the complexity of the decisions that require to be made and the need for adoption of relevant decision making styles. The objective of this topic is to find how the individual and group decision processes aid or impede business decision making.

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Individual Decision Making Process

A single individual takes the individual decision making process. It is mostly adopted in small-sized organizations that are owned and managed by a single individual. The approach is also suitable for the day to day and the short term decisions that do not require expertise. Additionally, the individual decision making process is adopted in technical departments where technical expertise is required (Nunnington, & Haynes, 2011). The individual has the responsibility to think and make prompt decisions. Thus, the understanding of cognitive abilities of the individual responsible is dire to the effectiveness of the strategic decisions in the company. The course of action the individual takes ultimately moulds the future of the organization. Currently, most managers deviate from rational decision making approach to use experience and judgment in making decisions. The managers may also adopt various decision making styles.

The Decision-Making Procedure

The starting point of the process involves the identification and definition of the problem by the individual responsible. The problem may be explained as a question for and the accurate solution. In the step, the manager also identifies the critical obstacles in finding the solution. The individual then develops the objectives to be accomplished then seeks the facts of the problem (Onag, Tepeci, & Basalp, 2014). The data is analyzed systematically and classified according to the futurity, the impact and the qualitative considerations of the solution. The objectives have to be measurable.

The next step is developing alternative solutions. The manager goes across the creative and the basic solutions to the problem. The main aim of the step is to have the best possible decisions out of the alternative options. The manager then selects the best decision in the options available. They should consider the risk involved in each alternative, the financial effort, the timing of the solution and the available resources that support the decision. The next step is the implementation of the selected solution (Nunnington & Haynes, 2011). There is proper communication to the employees in the organization and the employee involvement to ensure acceptance for smooth execution of the decision. The manager should also consider the correct time to introduce the decision to handle change resistance. The last step is monitoring the decision. There should be a mechanism to support feedback and the periodic report for the success of the implementation. Adjustments should be made where there is a need.

Pros and Cons of the Individual Decision Making Process

The process is beneficial in that it enables quick decision making. There are minimal or no consultations. Additionally, the process is less costly. No resources are required to maintain the group meetings as only one person is responsible for making the decisions. It, therefore, helps in saving money and energy as individuals make prompt and logical decisions (Nunnington, & Haynes, 2011). The individuals responsible are also accountable for their actions and performance.

However, the procedure has disadvantages in that the decision made by an individual is less motivating to the company as there are no consultations with those with experiences. Moreover, it is difficult to evaluate whether the decision is likely to cause harm to the organization (Nunnington & Haynes, 2011). An individual applies their views and approach, which may limit ideas. The individual also fails to consider the members' interests.

Decision Making Styles

Various models and theories inform the decision making styles. They include the rational decision making model, which is based on rational calculations to make prompt decisions that are aligned with the individual's objectives. The model affects the organization in that it results in making choices that maximize the benefits and minimize the costs as the individuals are believed to have perfect knowledge of the choices (Noe, Hollenbeck, Gerhart & Wright, 2017). The model of bounded rationality involves making decisions within the limitations of the information available sand the mental capability of the individual. It affects the organization in that the rationality of the decision-makers is restricted by the information they have, the cognitive abilities and the amount of time they have.

Moreover, the incremental view model involves splitting the decision making process into smaller steps. The organization has to handle the process one small step at a time then add another aspect. It is beneficial as it involves handling each step at a time. The organizational procedures view involves making decisions following the procedure laid out by the organization, including the norms and ethics. The model affects the organization in that the decision-maker has to pass through the stipulated procedures of decision making. The political view model involves the recommendation of small changes in response to the problem (Teece, 2010). It is opposed to making a set of many programs for implementation. It is important as it ensures the effective implementation of the plan. The garbage can model involves irrational decision making, where the organizational elements are mixed and matched (Nunnington, & Haynes, 2011). It is based on the assumption that the decision-makers are disconnected to the problems and the solutions. The individual differences perspective model suggests that individual differences affect the process of decision making as people have diverse views. The naturalistic decision making asserts that asserts that individuals make decisions through experience that enables them to categorize situations. It is dependent on the intuition, the perceptual skills and the mental models for making better decisions.

Group Decision Making Process

The decision making procedure comprises a participatory exercise where several individuals act collectively to analyze the organizational problem and develop the course of action ((Nunnington & Haynes, 2011). They analyze the problem and consider the alternatives available. They after that, select among the alternatives to generate the best solution for execution. It is prevalent in large organizations. The number of individuals, however, varies where they may be formal or informal. The process used to arrive at a decision may be structured or unstructured. In most organizations, many decisions that have consequences are made by the groups. The process is suitable for long-term decisions that are not technical.

The methods used may include brainstorming, which involves the group individuals verbally giving suggestions. Usually, the group members have a full understanding of the problem. The ideas are recorded then the process of analyzing the suggestions begins. The dialectical enquiry focuses on the courses of action. It divides the members into groups to discuss the utility of each option. The nominal group technique involves generating an extensive list of ideas in writing. The members are then asked to provide a suggestion then all the proposals are listed. The options are then ranked in order of their relevance to the problem. The Delphi technique is used when the group members are in separate locations (Nunnington & Haynes, 2011). They are selected according to their knowledge where their inputs are provided in the discussion room or email. At every step, the members ask questions, and the options are rated. After a discussion, the group then arrives in a consensus decision.

Merits and Demerits

The procedure is beneficial as it enables the generation of informed decisions as there is an aggregation of ideas. The model also combines the diverse strengths and expertise of its members to generate creative decisions. The individuals also offer different views that bring heterogeneity in the decision process. The groups also contribute to the acceptance of proposed solutions, as many people are likely to support it. It ensures a collective understanding of the decision made as most of those affected by the decision implementation has an input into the decision. It also promotes a sense of ownership in the decision made (Spanier, 2011). It also ensures a greater commitment towards the achievement of the set objectives, which makes the course of action successful.

However, the group decisions have a disadvantage in that they are time-consuming as several meetings have to be scheduled before reaching a solution. They are generally slow; therefore, it is hard to utilize them in problems that require urgent decision making. Several individuals can also dominate them (Jeston, 2014). Additionally, when the group leader dominates the group, the members may conform to their views without consideration of the risks involved. Moreover, they suffer from ambiguous accountability as it is not clear the individual accountable for the outcome. When the group lacks an agreed mechanism of evaluating the mechanisms, an incomplete decision may be considered.

Discussion

Both the individual and group decision making aid in the decision making process. The group decision making aids in that it combines diverse ideas from different members. It also ensures a critical analysis of the alternative courses of action to come up with the best decision. It is suitable for long term decisions. However, the decision making process is slow as every member has to be consulted. The individual decision making, on the other hand, involves rational decision making. It is convenient for problem resolutions that require urgency and the short term decisions that are technical. The decision is made in a short period. Besides, only one individual is responsible for the outcomes of the decision. However, it is less motivating to the group as the employees are not involved in the process. It also leads to the generation of limited ideas which could be attained in a group. During the decision making process, the individuals responsible have to follow each decision making step to ensure the effectiveness of the decision.

References

Jeston, J. (2014). Business process management: practical guidelines for successful implementations. Routledge.

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.

Nunnington, N., & Haynes, B. (2011). Examining the building selection decision-making process within corpora...