Business Essays – Successful Decision Business

impact problem-solving perspectives and outcomes. Recognizing these differences helps identify appropriate problem-solving techniques within the framework of rational decision-making.

The process of solving complex job and decision concerns through rational decision-making is crucial in various contexts.

The influence of an administration's culture and structure shapes the nature of decision-making. Theoretical models can be used to develop this process. However, decision-making is not limited to management; it is a daily task for everyone. From choosing essential home items to preparing family dinners, decision-making is a part of everyone's routine. To understand how decision-making functions in an organization, three theories should be emphasized: descriptive, normative, and behavioral theory. In this case, the focus will be on these theories in relation to business and management issues, specifically on their technical, organizational, and institutional or behavioral aspects.

Decision making is not simply choosing an option randomly, but rather a cognitive process or deliberate procedure to achieve rational decisions. Individuals at all levels of an organization make decisions. While not all decisions are diverse, they impact job security as well as the organization's interests. A successful decision-making process involves logically analyzing the problems to achieve the most efficient choice that will suit the situation.

According to Berret's (2005) research on decision making, the belief is that rational individuals will analyze information, consider potential outcomes, and evaluate the associated costs in response to their environment. The decision making process consists of four components: data collection, information processing, interpretation, and selecting a course of action. While this process varies across different levels of management, they all share the common responsibility of making rational choices that align with specified constraints (Berrett, 2005).

Currently,

the decision making process has become crucial for organizations as it serves as the foundation for competitive advantage and value creation. In an era where markets provide equal access to resources and competition drives businesses to adopt world-class practices, the quality of decision making can become a significant factor of differentiation. Additionally, problem solving is an integral part of the decision making process for addressing business and management issues. It involves perceiving and resolving a gap between the present situation and a desired goal within the organization, with potential obstacles blocking the path towards achieving that goal.In broad terms, the state of affairs is one that has not been previously encountered or where there is no known specific way out based on past experiences.

In contrast, the determination choice procedure involves selecting one of several possible solutions to achieve a desired outcome. The steps in both problem resolution and decision making are often similar and sometimes interchangeable. Most theoretical models of problem resolution and decision making consist of four stages (Bransford et al, 1984):

• The input stage involves perceiving a problem and trying to understand the situation.

• The processing stage includes generating and evaluating options, as well as selecting a solution.

• The output stage encompasses planning for and implementing the chosen solution.

• The review stage involves evaluating the solution and making changes or decisions if necessary.

According to the Chartered Institute of Management Accountants (2007), the problem-solving/decision-making process (refer to appendix-1) is broadly described as starting with perceiving a gap and ending with implementing and

evaluating a solution to fill that gap.

The essay discusses the procedure for decision making, which is divided into sections with specific steps. These sections are supported by the theoretical model of deductive reasoning within the rational process of decision making. This primarily rational process benefits business managers in various ways, including aiding in making informed and systematic decisions, creating a shared vocabulary for communication, providing learning opportunities, and emphasizing a disciplined approach to decision making. By breaking down the overall process into a six-step procedure described in Shapiro's journal (2000), there is an increased likelihood of success and learning from each decision. This sequential process helps business directors assess situations and make well-reasoned decisions in a methodical manner (refer to appendix-2). The four steps can be seen as guidelines for the rational decision-making process, similar to William Edwards Deming's PDCA theory (plan, do, check, act).The following steps outline the process of solving complex problems and making decisions in business and management. These steps serve as a general guide for business managers to make rational decisions:

One important step is framing the decision. By putting the decision into a frame, it becomes more visible to directors, acting like a window. This also helps provide context to the decision by identifying the most critical aspects of the problem that should be emphasized.

The use of armored combat vehicles and missiles to kill mosquitoes is like making decisions without a proper context. Directors have the responsibility of providing context for each decision, establishing the scope and priorities. For example, an executive with a technology background tends to view decisions as technical problems, while a marketing executive tends to

view the same decisions as market issues. This approach is the most effective way to address the direction issue. Effective frames for most business, public, and management sector decisions must consider resources in terms of people, market, financial, managerial, and technological factors. It is also crucial for directors to be aware of their frames in order to assess them against the situation's demands and explain why it is the right frame for a particular decision.

Their frames should be wide enough to cover important business issues and precise enough to provide clear direction, otherwise there is a chance of being unclear.

Information Assembly

Once the manager has established the framework, the gathering of information can be assigned. It is crucial to uncover hidden assumptions as these assumptions can dangerously hide important information that can be useful for making rational decisions. Additionally, future trends are also crucial for collecting information that can be derived from PEST projections (political, economic, social, and technological factors) found in every marketing plan to identify potential areas of change in the future.

However, overestimating the importance of assumptions can result in failure to gather essential information.

Examine the gathered Information

It can also be assigned tasks such as collecting and analyzing information or reducing the available options. Analyze the information considering its internal and external impacts including resources/people, market/financial, and technology. For example, making a product decision based on technological factors can be disastrous if the market is not prepared for it.

Or neglecting to adequately complete a product or project due to a lack of people is disregarding a crucial aspect of decision-making that could have serious consequences. In addition, the marketing concept of SWOT analysis

can be used to address internal factors (strengths and weaknesses) as well as external factors (opportunities and threats).

Ultimately, action must be taken.

This responsibility cannot be delegated, as it falls under the role of the manager to understand the comprehensive representation and utilize analyzed data to determine effective actions for the organization. Frequently, the analyst who gathers and analyzes information is an expert in a specific field.

It is the responsibility of the director to understand the context of the pudding stone issue or public concern. For example, only the director can decide if a technically feasible product with excellent market potential should be attempted when key knowledge workers are engaged in other important work that cannot be set aside. This decision-making process is typically delegated to professionals in engineering, manufacturing, finance, or other areas. Engaging in fair decision-making, according to Kim & Mauborgne (1997), fosters the trust and commitment necessary to succeed in the knowledge economy with respect to business and management issues. They outline three steps in this process: involvement (emotional decision), rationale (understanding behind the decision), and expectation (explicitly stating it) (kim et al 1997).

Every decision and action taken presents an opportunity for business managers or organizations to learn. Learning is dependent on feedback, which can be further understood by analyzing the rational decisions made and their subsequent effects within the company and the market. As the English saying goes, victory has many contributors while defeat stands alone.

If the organization does not effectively track rational decisions, it will overlook potential opportunities. Nevertheless, some argue that business managers should be held accountable for these rational decisions. It is crucial to

incorporate a strategy for collecting information and gaining insights from each significant decision. Succinctly put, rational decision making entails the following stages: Intelligence (identifying what needs to be decided and considering all possible courses of action); Design (evaluating the pros and cons of each alternative); Choice (examining the remaining options); Implement and Evaluate (making a decision, taking action, and assessing the outcome) (ibid).

The normative, descriptive, and behavioral models are the appropriate theoretical models used by business managers to manage the rational process of decision making. These models provide guidelines for business managers on how they can effectively manage a problem in terms of rational decision making. Among these models, the normative, descriptive, and behavioral theories are particularly relevant for business managers who focus on managing the rational process of decision making.

The descriptive model allows managers to understand how things currently are rather than how they should be. This theory is useful for making choices in a situation and views a decision as an individual event that is effective in solving a business decision problem. According to Teale et al. (2003), the descriptive decision theory is based on accurately describing the actual decision-making behavior of the decision-maker and how individuals make decisions as a means of self-preservation and avoidance of responsibility (Teale et al. 2003).

In relation to business and management issues, descriptive theory serves as a professional guideline for proficient directors. Their main focus is solving problems quickly and making short-term decisions. Business-oriented decision-making strategies used by these directors enable them to solve problems efficiently by analyzing different types of input and output data and manipulating the information according to set criteria.

Normative theory serves as a

guideline for business directors.

This theory prescribes how decisions should be made by business directors and leans towards a rational approach in decision-making. It is appropriate to employ a knowledgeable and rational individual to generate options that will lead to a successful outcome benefiting the organization in the long run.

It is said that the theory not only provides guidelines for business and management issues, but also carries ethical responsibilities in order to find optimal solutions. In today's business environment, teams are composed of individuals with diverse characteristics such as nationality, religion, caste, race, age, education, and socioeconomic status. Collaboration among team members is crucial for achieving organizational success. Various challenges emerge in areas like staff downsizing, resource utilization, changes in law and regulations, technology advancements, discrimination and racial issues, employee rights protection, and product quality assurance. These challenges are intricate and tough to resolve. Henceforth, entrepreneurial managers should follow normative theory as a guiding principle to make rational decisions based on their individual judgment when dealing with these complex business dilemmas.

The normative theory aims to describe how human decision makers behave by using rational and logical tools to make decisions. In relation to business and management issues, normative theory is qualitative and is closely linked with institutional directors who have a philosophical standpoint and rely on wisdom, experience, and philosophical insight to make important decisions and solve qualitative problems (Adair, 2007).

Behavioural theory as a guide for business managers

Behavioural theory deals with uncertainties and combines both descriptive and normative theories. It acts as a mediator between these two theories. Behavioural decision theory is constrained by the realities of the world, and decisions are made based on the

decision-maker's observation and perception of a given situation. According to Teale et al (2003), behavioural theory in the context of management issues is most commonly associated with the social system that focuses on the organization at the management level. This theory is suitable as a guide for organizational directors, coordinating technical and institutional directors' transactions as an intermediary.

Thus, the optimal course of action for an organizational director is to involve organizational viability when following the rational decision-making procedure (Teale et al., 2003).