Individual Differences in Decision-Making
Critically discuss the individual differences and organisational constraints that constrain decision-making in organisations.
The term decision making can be defined as the selection of a course of action from the probable alternatives for the purpose of arriving at a resolution for a given problem (Pettigrew, 2014). The process of decision making is a consultative affair performed by the experienced and higher level management for the purpose of better functioning of the organization. Organizational decision making is a complex process. An important role is played by effective decisions in in managerial and organizational activities. Such decisions are made with the purpose of sustaining organizational functioning and business activities. The process of decision making is an indispensable and continuous component of the management of business activities and the entire organization. Each and every level of management is required to make decisions for ensuring the achievement of business or organizational goals (Brunsson & Olsen, 2018). Constraints are also an essential element of the decision making process. Such constraints create hurdles in making decisions with mutual understanding. Moreover, it further results in the creation of unnecessary delays in getting to a conclusion and sometimes often leads to incorrect decisions due to which the organization suffers for a number of years. Decision making in an organization suffers from individual differences and organizational constraints.
Dissimilarity is considered to be the principle of nature. No two individuals are similar in all aspects. Such differences are named as individual differences. Organizational constraints cover the broader aspects of the organization and include the factors which cause delays or hurdles in the process of decision making.
Decision making is bounded by common biases, rationality and errors along with the use of intuition. However, a deviation from the rationale model is created by individual differences. The important individual differences affecting decision making in an organization include personality and gender. The escalation of commitment is affected by the personality of an individual. There are two facets of conscientiousness namely achievement striving and dutifulness which affect the escalation of commitment. There is more probability of achievement striving people to escalate their commitment as against the dutiful people. This is due to the fact that the people who are achievement striving hate to fail and therefore escalate their commitment. On the other hand, dutiful people are more persuaded to perform the tasks which are considered to be best for the organization (Cooper, 2015). Secondly, achievement striving people seek to justify the appropriateness of the actions performed by them as they are more inclined to the hindsight bias while dutiful people are resistant to the hindsight bias. People having high self- esteem are particularly vulnerable to the self- serving bias. The reason behind it is that they are strongly motivated for maintaining their self- esteem so they make the use of self- serving bias for the purpose of preserving it. They take the credit of the success and blame others to be the reason behind their failures. Therefore, the decision making is affected in an organization due to the existence of different personalities (Chamorro- Premuzic, 2016).
Impact of Gender on Decision-Making
Another individual difference that influences decision making in an organization is gender. Rumination can be defined as reflecting at length. As far as the decision making is concerned, it means overthinking problems (Haslam, Smillie & Song, 2017). The engagement of women in rumination is more as compared to men. Therefore, the problems are more overanalyzed by them before making the decision. They also have the tendency of rehashing the decision once made. This has a positive side as it helps in considering the choices and problems deeply. But on the other hand, it can also result in depression, regret over the decisions made and makes the problems harder to resolve (Mishra & Novakowski, 2016). Moreover, the well- being and self- esteem of women is dependent on a great extent on what others think of them. Women are more understanding but are affected by the events that take place in the lives of other people. This further provides them a chance to ruminate about. When men and women are not same in these aspects, it makes difficult to develop a common understanding and come to a decision (Marroquin, Boyle, Nolen- Hoeksema & Stanton, 2016).
There are some organizational constraints that influence decision making in an organization. The decision makers are constrained by the organization and therefore, create a deviance from the rational model. Such organizational constraints are performance evaluation, reward systems, formal regulations, system- opposed time constraints and historical precedents. The performance evaluation criteria used for evaluation affects the decisions made by the managers. For example, it is believed by the divisional manager that the plants that operate under their responsibility are giving their best performance and there is no negative aspect than this means that the plant managers takes every possible step with the view to ensure that no negative news or information reaches the divisional manager. The rewarding system adopted by the organization also has an influence on the decision makers as it suggests the choices which are favorable with respect to personal payoff (Caniels & Rietzschel, 2015). For example, General Motors provided bonuses and promotions to the managers who made their best effort for the purpose of avoiding controversies and conflict in the organization and kept a low profile. As a result of such bonuses and promotions, the managers in General Motors started avoiding the tough issues and passed the controversial decisions to the committees so that their profile does not get affected. In other words, this means that the reward systems resulted in the constraint for the organization as the method adopted for the motivation of managers ultimately resulted in the avoidance of the tasks. Formal regulations also act as an organizational constraint (George, Howard- Grenville, Joshi & Tihanyi, 2016). When there are rules and regulations relating to every aspect involved in the performance of the task then there is no freedom of choice left. The program decisions are usually supported by the rules and policies which in turn bind an individual to act in the planned manner. And therefore the performance of the tasks in an intended manner, there is a limitation put on the choices of the decision maker (Robbins, 2010).
Organizational Constraints in Decision-Making
Moreover, there are some system- imposed time constraints which prove to be a hurdle in effective decision making. Deadlines are imposed by the organizations on decisions and therefore all important decisions also have their explicit deadlines. Such conditions result in the creation of time pressures on the people who make decisions in the organization and make it difficult and sometimes impossible for them to collect the requisite information before making the final choice (Eschleman, Bowling & LaHuis, 2015). In cases where adequate time is available for making decisions and there is no deadline or time constraint then further expertise, knowledge and assistance can be obtained for making effective decisions for the benefit of the organization. Furthermore, the decisions have a context and are not made in a vacuum. Every decision affects a series of decisions. In other words, the decisions made in the past do not lose their effect and continue to influence the current choices made in the organization. Therefore, when an effective decision is not made, it continues to affect the organization for a series of years (Guo, Chen, Long, Lu & Long, 2017).
Therefore, it can be concluded that the individual differences and organizational constraints have a severe impact on the work outcomes and on the overall capability and productivity of the organization. The decision making is an important aspect of the organization and therefore should aim to minimize the constraints which influence them. The important individual differences affecting decision making in an organization include personality and gender. The escalation of commitment is affected by conscientiousness. The commitment is more in the achievement strivers. Dutiful people are more persuaded to perform the tasks which are considered to be best for the organization. Also, gender affect decision making as there is a tendency of rumination in women due to which they overthink problems due to which decisions are influenced in the organization.
Organizational constraints are performance evaluation, reward systems, formal regulations, system- opposed time constraints and historical precedents. For improving the performance the managers often decide to stay away from taking risks. The rules and regulations sometimes create a limitation for making decisions in the organization. Furthermore, the decisions have a context and are not made in a vacuum. Such decisions continue to affect the organization in future also.
References
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Caniels, M. C., & Rietzschel, E. F. (2015). Organizing creativity: Creativity and innovation under constraints. Creativity and Innovation Management, 24(2), 184-196.
Chamorro-Premuzic, T. (2016). Personality and individual differences. John Wiley & Sons.
Cooper, C. (2015). Individual differences and personality. Routledge.
Eschleman, K. J., Bowling, N. A., & LaHuis, D. (2015). The moderating effects of personality on the relationship between change in work stressors and change in counterproductive work behaviours. Journal of Occupational and Organizational Psychology, 88(4), 656-678.
George, G., Howard-Grenville, J., Joshi, A., & Tihanyi, L. (2016). Understanding and tackling societal grand challenges through management research. Academy of Management Journal, 59(6), 1880.
Guo, D., Chen, H., Long, R., Lu, H., & Long, Q. (2017). A Co-Word Analysis of Organizational Constraints for Maintaining Sustainability. Sustainability, 9(10), 1928.
Haslam, N., Smillie, L., & Song, J. (2017). An introduction to personality, individual differences and intelligence. SAGE.
Marroquín, B., Boyle, C. C., Nolen-Hoeksema, S., & Stanton, A. L. (2016). Using emotion as information in future-oriented cognition: Individual differences in the context of state negative affect. Personality and individual differences, 95, 121-126.
Mishra, S., & Novakowski, D. (2016). Personal relative deprivation and risk: An examination of individual differences in personality, attitudes, and behavioral outcomes. Personality and Individual Differences, 90, 22-26.
Pettigrew, A. M. (2014). The politics of organizational decision-making. Routledge.
Robbins. (2010). Essentials Of Organizational Behavior. Pearson Education.
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