Have you ever been taught decision making? When, where and for what reason?

What exactly is decision making?

What are the key steps in decision making?

What makes people take bad decisions?

What kind of decision maker are you?

2Read the article by Bob Dignen from Business Spotlight (6/2008).Pay special attention to and memorize the vocabulary in bold type.

TAKING THE PLUNGE

International business is a world of complexity, ambiguity and paradoxes. Decisions are often made on the basis of limited information, which makes risk management an essential discipline. And instead of the clear top-down decision-making structures of the past, organizations now expect individuals and teams to work autonomously at all levels. Greater cultural diversity has also widened the range of decision-making styles and processes, and increased the potential for conflict.

1What is decision making?

Most people would argue that we take business decisions to reach personal, team and organizational goals and that the art of decision making is simply to choose the right option from a range of possibilities. But, in practice, decision making is more complex.

First, the motivations behind our decisions may be less rational and strategic than we think: political loyalties, beliefs, environmental constraints, ethical factors and even irrational motives may play a significant role.

Second, decisions are not isolated events but part of a context of decision making.

2Key steps in decision making

To understand decision making better, it helps if we break down the process into various steps:

a)Decide to decide. The first step is to recognize that a decision needs to be taken to achieve a particular goal. This may be easier for some people than for others. Those who lack self-confidence ox fear risk may be indecisive, preferring to wait and see what happens rather than acting. Others may decide to act too quickly without thinking through the consequences, and so may be seen as impetuous.

Cultural issues may also be significant. In some national or organizational cultures, only those in senior positions can "decide to decide". In collective cultures, this decision may be a group process, which could require time to get a critical mass to support. This can be frustrating to those from a more individualistic culture, but rushing this process could lead to decisions that do not have wide acceptance.

b)Collect and evaluate information. Effective decision making requires reliable
information. But you should not collect so much information that you end up confused and paralyzed. Indeed, it will often be impossible to collect all the relevant information in the necessary timeframe. A certain information risk is often present. It can help to involve others in the information collection process to get as wide a range of opinions as possible. This provides not only better insight, but also potentially greater involvement in the implementation of any decisions.

It is important to set clear and relevant criteria to evaluate possible options. If a human-resources manager is to select training providers, price is an easy criterion to look at, but it may not be as relevant as quality criteria such as experience with similar companies, the ability to innovate or being able to deliver training in different languages.

Finally, you should know when not to take a decision. Resist the pressure to decide if you feel that waiting will allow questions to be clarified or new alternatives to emerge.

c)Decide on an option. A number of problem-solving tools can help you to compare the advantages and disadvantages of different options. On the basis of such tools and a certain amount of gut feeling, you should select the option that you think has the greatest probability of success.

Things may still stand in your way. A new turn of events may require you to rethink things. Unexpected resistance from others may necessitate a u-turn. You yourself may lack the courage to take an unpopular or difficult decision.

Fear of failure often prevents people from taking decisions. To make the right decision, you will have to manage your own fear of failure and risk. Remember the following:

Not taking risks limits opportunities for growth and improvement.

Risk is meant to be scary, so don't worry about being afraid.

We fear losing the familiar, so work hard to embrace the new.

Never be reckless: take calculated risks in a rational state of mind.

Accept a learning curve and don't try to succeed 100 per cent immediately.

When you jump, jump with 100 per cent conviction or you will hurt yourself when you land.

d)Implement the decision. Once you have made a decision, the real work starts. It is vital to

motivate yourself and others to accept the consequences of that decision and to support it with the necessary actions. If you simply announce decisions but fail to "sell and support" them, you risk resistance and failure. Effective decision makers proceed as follows:

They explain the reasons and positive intentions behind their actions.

They describe the benefits for those affected.

They have the mental energy, patience and communication skills to manage conflict.

e)Evaluate the decision. You will never improve your decision-making abilities without reflecting on the decisions you take. Analyze the extent to which key decisions achieve their goals and are supported by those around you. If they were unsuccessful, what was the reason? Remember also that it is possible to take good decisions that have a bad outcome. A decision is good if it is based on a clear goal, logical assessment of the available information and taken with the full commitment of the decision maker and others involved. If things don't turn out as expected, you can use that experience to improve your future decision-making performance.

3 Decision-making styles

Because people think and feel differently, it is not surprising that they make decisions in different ways. One interesting way of classifying decision-making styles is that of Rove and Boulgarides. In their work, they emphasize the importance of values, needs and preferences. Their model reveals four main decision-making styles, based on whether people are task-oriented or relationship-oriented and on how much cognitive complexity they prefer. The model also looks at the motivations behind decision making. The four types of decision makers are:

a) Directive decision makers. These people are task-oriented and have a strong need for power, wanting to feel they are in control of others. They also have a low tolerance for ambiguity and prefer to keep things pragmatic and simple. They tend to take decisions on the basis of less information, using fewer alternatives. They need to feel that the decision is theirs to make and no one else's.

Analytic decision makers. These people are also task-oriented. They need to achieve things and are highly motivated when dealing with a challenge. They are more tolerant of ambiguity than directive decision makers, and can tolerate higher information loads. They take time to analyze in more detail the various possible courses of action.

Conceptual decision makers. Such individuals also have a strong need for achievement. But they are people-oriented and less analytical. They are comfortable with high information loads but their data collection methods may be through talking to people, especially experts. They tend to be more creative than the more analytical decision makers and think about what can produce the best results in the long term.

Behavioural decision makers. These individuals have a strong people orientation. They tend to communicate easily, using simple and understandable messages(with low cognitive complexity). They consult with others, are open to suggestions and happy to compromise. They prefer a looser sense of leadership control. "I prefer everyone to "own" the decisions that are mine".

4 Finding your way

As we have seen, decision making is a process involving data collection and rigorous analysis. But it is also a psychological process involving human emotions and personal bias. The challenge is to develop your own approach to decision making so that you can make the most of your strengths and minimize your weaknesses.

When working internationally in teams with different mindsets and priorities, it is essential that you can incorporate these diverse perspectives into the decision making process. In this way, you will be able to increase both creativity and the team's commitment to decisions.

3Answer the questions:

What makes decision making so important today?

What definition of decision making can you suggest?

What affects decision making?

What are key steps in decision making?

What is the most essential for each step?

4Test your decision making

Look at the questions below and note down your options. Then see page .... for comments. Decision 1: A normal coin is tossed ten times and lands on heads each time. You have $1,000 to place on the next choice. Do you choose heads or tails?

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