Part II The Basic Skills and Processes of Management

• Making Wise Decisions

Decision Making: The key to Management

• The primary source of control taking an organization from planning to the fulfilling of objectives

• The act of making up one’s mind, reaching a conclusion, passing judgment on an issue of consideration when alternatives are present

Director: Primary Decision Maker

• Decision making is not the entire job

• Not many decisions, but key decisions

• Made slowly and with wisdom

• Most issues resolved with a policy, procedure, standard practice, or rule

• May just implement an established action Guide

Action Guides

• Principles

• Rules

• Policies

• Generalizations – An action guide is a generalization that is applicable to other situations

Factors Determining Choice

• Cognition

– Gathering, analyzing and interpreting information

– Separating information into facts, circumstantial evidence, opinion, beliefs, and inclinations

• Convictions

– Strong belief reinforced by feelings

• Courage

– To move and to act even if it means offending some

• Values

– Principles, standards, or qualities considered worthwhile

– Our response to any issue is affected by personal, political, educational, or moral values

• Truths and Facts

– Truths are statements that conform to knowledge or logic; relating to honesty, sincerity, and integrity

– Facts are statements that are objectively verifiable; often facts are not available at first

• Unsubstantiated Information

– Truths and facts are not always available

– Opinions, circumstantial evidence, beliefs, and inclinations have not been verified

Four Approaches to Decision Making

• The Immediate-Response Approach

• The Precedent Approach

• The Logical Approach

• The Problem-Solving Approach

The Immediate-Response Approach

• Based on an instinctive response to some given stimulus.

• Very little thought goes into the decision

• Reactionary

The Precedent Approach

• Judgments based on how decisions were made in the past for similar situations

• May have worked in the past but may not be right for the current situation

The Logical Approach

• Obviously based on reason and logic

• No structured procedure, but simply a mental arrangement of all the known elements or circumstances pertaining to the situation and then make a decision

• Reasons are then listed justifying the decision

Problem-Solving Approach

• More thorough than the others

• Characterized by a prescribed routine that is thoughtfully and meticulously followed.

• Discussed later.

Fundamental Elements of Good Decision Making

• Humans are decision-makers and problem solvers

• There are five basic elements of good decision making

1. Distinguishing Common for Uncommon Issues and Problems

• Does this problem usually occur under similar circumstances? Or, is this problem confined to this local, immediate situation?

• If it has occurred somewhere else under similar conditions, it is a common problem, but unique if no precedent has occurred

Common Problems

• Can be handled by decisions or action guides

• These guides may be principles, policies, standards, procedures, or rules, and should appear in the operations manual of the organization

• If a problem occurs once or twice it is no longer considered unique, and should establish an action guide to handle it again

Unique Problems

• Cannot be handled with an established policy, standard, or rule

• Since it is unique it should be handled by the director, who will undertake research, time, thought, argumentation, meditation, and prayer.

• Director may delegate the problem to a committee, and the deliberations of the committee are reviewed by the director who makes the final decision

2. Satisfying Peripheral Conditions

• Not only satisfy the primary purpose but the conditions surrounding it

• Often there are winners and losers in a decision, and satisfying those opposed to the decision may help to strengthen the position of the director

3. Allowing Acceptable Compromise

• Sometimes seen as weakness

• May be helpful in some circumstances

• Values, truths, and principles should not be compromised

• But many other issues can be compromised.

• Often people are more readily accepting a decision where they don’t get everything they want if they agreed to it.

• Agreement may make things work

• An effective decision satisfies the central purpose and peripheral conditions without requiring unacceptable compromises.

4. Putting Decisions into Action

• Identifies what needs to be done, who will do it, and how it will be done

• Communicates the decision through the proper channels to the person(s) who will implement the directive

5. Getting Feedback

• To monitor the effectiveness of the decision

Principles Relating to wise Decisions

1. Decisions require alternatives

vDecisions are usually choices between 2 or more alternatives

vGood decision making requires developing alternatives

v“a choice between almost right and probably wrong – but much more often a choice between two courses of action neither of which is probably more nearly right than the other.” Peter Drucker

vMust avoid an unacceptable compromise

2. Wise Decisions result from disagreement

vNo decision is necessary if there is no disagreement

vDissent sometimes not allowed

vDisagree without being disagreeable

vEmotions controlled and criticism properly handled if the leader is to benefit from their ideas

vDrucker’s 3 reasons why disagreement is necessary:

vOnly safeguard against a the leader becoming a prisoner in the organization

vIt provides alternatives

vNeeded to stimulate imagination

3. Critical Decisions Require time

vBig mistake for the director to rush the process

vDelay as long as possible without procrastinating to give those time to get all facts out and ideas expressed

vLeader makes a decision and writes down every detail of the decision

vFor the next few days after the decision is made and writes down any variation from the original decision, and puts it into action if there are no variations for three days.

4. Decisions necessitate change

vChanges are inevitable when decisions are made.

vChange creates resistance

vLeader needs to relate to the resistance and to those resisting in order to be successful

vIf resistance results in the inability to adjust to change their may need to be resignations, retirements, or firings

Improving Decision-Making Skills

v Practice on the simple decisions made every day using the following problem-solving steps

v Define and clarify the problem

v Identify the decision objectives – what do I hope to accomplish by solving this problem?

3. Identify the hurdles that may hinder the solution

Physical – lack of skill

Emotional - fear

Social – community mores

Intellectual – expectationsList, analyze, and categorize all relevant information

5. Brainstorm for alternatives

vselect a group leader who understands the technique

vWork in groups of 5-7 people

vSelect an isolated meeting place free from interruptions

vTape record the meeting

vMay warm up the committee with a simple question

vEncourage the members to say the first thing that comes to mind

vNo judgment of the ideas during this step

vPrevent time lags and finish on agreed upon time

vList the alternatives and keep the most plausible ones

6. Analyze the list of alternatives, retaining only those that are viable, and present to the decision maker.

7. Make the decision and put it into action