Definition
Discuss about the Corporate Decision.
Corporate decision making is seen as one of the most important elements of a company and organizational management. Due to its essential nature, it takes place at every level of a company and is undertaken by every individual. Every person involved in the administration of a firm is tasked with making a decision that pertains to the running of the branch of a company under his control. The process of decision making is expansive and includes the implementation of those decisions. The purpose of this paper will be to provide for an analysis of three articles that address issues of organizational decision making and how it affects the general performance of or organizations. The articles under consideration are Brynjolfsson, Hitt, and Kim (2011); Velasquez, and Hester (2013); and Wong, Ormiston, and Tetlock (2011). The analysis of these articles will be looking at the decision-making process which includes the identification of problems, information gathering, synthesis of information, choosing among alternatives and implementation of the decision. It will also pay close attention to the different types of decision and their effectiveness. Similarities of perspectives and the application of the propositions of the articles will be considered.
Based on Wong, Ormiston, and Tetlock’s (2011) explanation decision making can be described as the process undertaken by a person in deciding about an important matter or element especially when that decision relates and affect the lives or the running of individual affairs in an organization. Popovi?, Hackney, Coelho, and Jakli? (2012) argued that involves choosing the course of action from more than one possible alternative, with the aim of solving a particular problem or attaining certain results. Wong, Ormiston, and Tetlock (2011) stated that from this point, decision making could be a consultative process that involves several individuals with the requisite knowledge on the issue at hand. Brynjolfsson, Hitt, and Kim (2011) explained that the decision-making process that involves several individuals can act described as the checks and balances put in place to ensure organizational growth in both linear and vertical states. Such decisions are said to be aimed achieve certain goals that have been set by the organization (Lunenburg 2011). Velasquez and Hester (2013) agrees with the formerly mentioned articles that the decision making process involves and starts with the definition of the problem and is then followed by the gathering of the relevant information and data; developing and weighing the options available and then choosing the best option (Hwang and Yoon 2012). The subsequent steps include planning and execution of the best choice, and finally making a follow up on the action taken. The need to follow this procedure makes decision-making process time-consuming due to the need for enough time to meditate on the effects of the action. However, Velasquez and Hester (2013) claims that the longevity of a decision-making process ensures that the best result will be achieved. It has to be appreciated that in an organizational setting they are need to develop a coherent, right and complete data that can be synthesize made sense of for a decision to be good (Colquitt, Lepine, and Wesson 2011).
Theoretical perspectives, similarities, and difference
Brynjolfsson, Hitt, and Kim (2011) state that it is important for any management team to have sufficient data that will aid them in making a decision on a certain problem. From their perspective, they explain that it is good to apply the information theory and the information-processing perceptions of organizations which provide that accurate information helps in reaching a proper decision. Based on this theory, decisions that are made upon reliance on enough data are more likely to increase organization performance when it comes to problem solution (Lunenburg 2011). Brynjolfsson, Hitt, and Kim (2011) established that a study of 179 public trade firms in the US that used data-driven decision making record high performance in financially, technologically and investment-wise. Such firm can make a proper decision for the long-term purpose (Colquitt, Lepine, and Wesson, 2011). Brynjolfsson, Hitt, and Kim (2011) found that about data-driven decisions in organizations were responsible for about 5-6% of the increases in firm output and productivity when compared to the traditional methods of decision making. The need for more information according to Blackwell (19530 as cited by Brynjolfsson, Hitt, and Kim (2011) is used in ascertaining the state of nature in an organization which is later used to determine the action to be taken.
Velasquez and Hester (2013) applied several theories of decision making that experts used. They explained the Case-Based Theory that provides that companies will make given decisions depending on the situation at hand. It encourages human preference-oriented predictions and the data-oriented prediction to ascertain the occurrence of a problem hence the ability to decide on how to solve it. There is the Fuzzy set theory which is based on the classical set theory that endorses solving problems by tackling imprecise and uncertain data. Unlike the information theory, it takes account of the fact there may not be enough information needed to solve a given problem hence utilizing few rules that solve complex problems. The acknowledgment of the fact that information may not be sufficient equips managers with the ability to tackle any arising issue promptly. Thichallengess theory is suited for the solving of short-term problems and challenges that are very agent yet there is little information on how they have been addressed in the past (Tzeng and Huang 2011). The other approach used by Brynjolfsson, Hitt, and Kim (2011) is the Analytic Hierarchy Process which heavily relies on the propositions of experts. This method seems to be in line with that of the information theory that is proposed by Brynjolfsson, Hitt, and Kim (2011). The AHP require that there should be sufficient information that is to be assessed by the expert for him or her to reach a proper decision. However, the MAUT is more data intensive and therefore highly compatible with the information theory.
According to Wong, Ormiston, and Tetlock (2011) researchers have found that the integrative complexity approach is good for making the decisions that are uniformly acceptable and practical to use in running organization. However, the integrative process is complex ant time consuming since much time is needed for one to reach a given decision. The requirement is that all stakeholders be involved in the decision-making process so as to ensure efficiency availability of data (Tzeng and Huang 2011). It presupposes that corporate social performance is a model incorporating the social responsibility and the entire process of corporate social responsibility as well as behaviour. The decision made based on this mode requires maximum consultation. It recognizes that decisions affecting a group of individuals cannot be made solely by looking at the views of a small group of people. All persons that relate to an organization are equally important. The basis of this theory is that is based on the ability to evaluate the differences among people and being able to accommodate them (Elwyn 2012). Like the MAUT, the Information Theory and the AHP, it encourages the gathering of sufficient information, and evaluation several outcomes before settling on a given decision.
Velasquez and Hester (2013) explained that managers who use integrated complexity in their decision making had been observed to yield high-performance results for their organization. According to Lunenburg (2011), decisions that involve every individual will obvious touch on their interests and as such be able to address wider concerns. The result will be that every person in the organization gets satisfied with the decision made. Furthermore, integrative decision making acts as a tool for many employees. It gives them the spirit and feeling that they are part and parcel of the organization and thereby awakening a hard-work spirit. As a result, they get motivate hence better results for the organization. Giving a person a feeling of a sense of belonging may at times work a fire that fuels their commitment to work. Literary speaking, integrative complexity is all about decentralization of decision making. It presupposes that individuals at the different levels of an organization have the ability to make a proper decision that affects their respective areas of work. This helps to ease the burden placed on the top management and therefore making work easier and enjoyable. The only problem with decentralization is that it is time-consuming. Making a uniform decision becomes difficult because much of the information is scattered in different departments. Every organ of the organization is responsible for its duties and functioning. On the other hand, in a centralized decision-making system, the information is contained and therefore readily available if need to make a decision that should be common to all in an organization. The group involved in the decision making is also small hence reducing issues of conflicting ideas. It is easy to reach an understanding, especially where agent decisions are needed. This view can be seen to be in line with the Fuzzy set theory as explained by Velasquez and Hester (2013), especially on the issues of inaccurate data. However, where much information is needed the decentralized decision-making process is compatible with the information theory explained by Brynjolfsson, Nicklin, and Kim (2011).
The analysis of the three articles provides a mixed view. At one point, the position seems to be the same but different at another. Velasquez and Hester (2013)’s various theories of decision making seemingly address all the issues that are central to decision making. According to Zimmerman and Yahya-Zadeh (2011), a good decision should be made after having assessed all the risks and ensuring that the benefits of adopting it outweigh the downsides. Zsambok and Klein (2014) acknowledged that such decision and information needed to reach it would be reached after proper consultation as proposed by Wong, Ormiston, and Tetlock (2011); and Brynjolfsson, Hitt, and Kim (2011). A similar stand can be found in the integrative complexity approach proposed by Wong, Ormiston, and Kim (2011). The Case-Based theory as proposed by Velasquez and Hester (2013) is an acknowledgment that there is no uniform way that organization is used to reach the decision. It shows that there are situations where data may not be available and that the organizational problems are different at times hence the need to address situations as they arise. However, the proposition of Velasquez and Hester (2013)’s MAUT and Brynjolfsson, Hitt, and Kim (2011) information theory is highly compatible with the centralized approach of decision making. The three approaches agree that proper decision requires a lot of information.
As explained above, there are various areas agreements in the articles. The information theory, the MAUT and the integrated approach believe in the gathering of a lot of information for a proper decision on a matter to be reached. Decisions are seen as covering broad groups of people and therefore inclusive (Ford and Richardson 2013). As such, the kinds of decisions made based on these theories are long term. Colquitt, Lepine, and Wesson (2011) explained that not all theories could be used to solve all kinds of decision. Short term and agent decision are to be addressed by flexible approaches. The best examples of flexible theories are the Case-Based theory and the Fuzzy set theory. As explained by Velasquez and Hester (2013), these two are highly adaptable. Zsambok and Klein (2014) found that good decision should be ones that the employees can easily adapt and will not cause any unnecessary hardship. Such decisions can be made out of a decentralized system. Decentralized systems apply to large organization and are effective in making decisions on unexpected problems. These kinds of problems do not have to be considered by the top management team especially when they affect the functioning of a small part of the organization. According to Hwang and Yoon (2012), the mere fact that there may be no sufficient information on a certain problem does not mean that it should not be solved. The management has to adopt a system that best addresses the issue in question. Goetsch and Davis (2014) explain that it is the duty of a manager to make decisions and solve problems. Govindan, Rajendran, Sarkis, and Murugesan (2015) believes that the changing world is a recipe for organizational problems hence the need to adapt. Even though Brynjolfsson, Hitt, and Kim (2011) believe that sufficient information is needed to solve organizational issues, they submit that not all issues will be solved in the same way. Slotegraaf and Atuahene-Gima (2011); Bergman et al. (2012) explained that companies that have shown flexibility in their decision making processes record high profits particularly when the process is inclusive. Such practices help to fill the lapse of information that arises out of limited data availability.
Conclusion
In a nutshell, decision making is a multifactor process that requires the gathering and synthesis of information. Regardless of the agency required to solve a problem, one must first identify the problem then accumulate all the information necessary to solve it. The decision maker must also be adaptable because some lack sufficient data to solve them. There is no universal way of decision making, and multi-criteria approach should be taken in such cases. The three articles agree that every decision requires information, however, little it may be.
Reference
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