"Decisions made about people are the most important decisions that an executive can make." Alfred P. Sloan.
Introduction
In a large number of opportunities in our existence, individually or in a group, and in the face of dissimilar situations in family, social or work life, we face moments in which we must make a choice, from: what are we going to do on the weekend, what to buy in the market, how we will approach the problem to our collaborators, what we will tell our boss about the idea we have, and thus we could express multiple other situations.
We can express various meanings of the word decide: resolve, make a fixed or decisive determination; form final judgment about something doubtful; solution expressed in relation to a specific fact; resolve an indeterminacy; or others.
Now, in our case, the study will be focused on decision-making in organizations, that is, in our working life, so we will study some fundamental aspects related to the subject.
General and fundamental aspects
Before delving into the process and other elements of decision-making, let's see some aspects, which will not only serve as support to continue the study, but will also be very useful for a deep understanding of the subject.
In a general sense, a decision is a choice in the face of certain alternatives, where in many cases we are left in doubt, that is, whether or not we make the most correct decision.
The definition of decision-making will be presented as follows:
"It is a process where the best actions are identified, valued and selected, based on the alternatives evaluated, to solve the problems or difficulties presented or to take advantage of opportunities."
As we appreciate in the definition, we do not always face the same situation, sometimes we must solve problems or difficulties presented in the organizational activity, which requires that we restore the situation to its original or previous position, in other cases the decision must give us the possibility to allow us to take advantage of opportunities to exceed the programmed objectives.
These aspects, problems or difficulties, and opportunities, require a precise identification since they are not only different by definition (as we saw in the previous paragraph), but they also provide a different scope.
Sometimes it is easier to identify a problem than an opportunity, reaching the first through criteria expressed by third parties, whether they are clients or employees of the organization, due to non-compliance with work plans or in relation to previous periods.
In this regard Pounds, W. (1969) cited in Stonner, JF (2004) expresses the following.
“ The problem identification process is usually informal and intuitive. There are four situations that generally indicate to managers the existence of possible problems: when there is a departure from past experience, when there is a deviation from the established plan, when other people present problems to the manager, and when competitors act better than the organization of the administrator in question ”.
If the identification of problems is important, which is sometimes not a simple situation, it is more important to take advantage of opportunities, due to the scope of the latter.
According to Peter Drucker (1993) in Managing for Results, there are a group of realities in organizations, among which the following stand out:
"Results come from exploiting opportunities, not solving problems."
"To get results, you have to match resources to opportunities, not problems."
"Focus resources on critical opportunities"
Decision-making characteristics
Not all problems arise under similar situations, so in some cases the decisions taken must be structured and in others unstructured, let's see what each one consists of and how to approach them.
We know that problems can be simple or complex, of greater or lesser importance, repetitive or isolated in their occurrence.
Taking into account the above when problems are recurrent, whether they are simple or complex, and we are in a position to have control over their composition, being able to project ourselves with foresight and certainty, we can develop procedures, policies, rules that allow fast and safe decisions to be made, in this case we are facing a structured decision making.
On the contrary, the problem presented is not recurrent or its complexity, importance or implication is such that it does not allow the use of previously elaborated means, so a specific reasoning must be made for it, we are facing an unstructured decision making.
Elements to observe for correct decision making
With decision making we pursue an objective, then it is not a matter of deciding "at all costs and at all costs", as is sometimes expressed, but rather that the decision allows us to achieve an expected result, and that it is rational and logical according to samples needs. To do this, we must observe certain elements that we will present below some of the most significant:
- All problems or situations are not, nor do they have the same magnitude, urgency or other characteristic, so we must prioritizethe solution of those that at a given moment are adequate for the moment we are in. Not to try to solve all problems by itself, but to analyze and carry out a correct decentralization towards our collaborators, as well as to elevate our superiors What is not within our reach to resolve, that is, the responsibility of other areas, although be careful with the latter and raise only what is strictly necessary, since if this is not fulfilled our image before the superiors would be affected, and could show signs of incompetence or accommodation Obtain as much information as possible about the problem or difficulty and about the opportunity and making the most of it. Do not limit ourselves, inform us by the different routes, as much as possible, act without haste,but as soon as possible since an unnecessary loss of time could constitute the failure to take advantage of an opportunity or the failure to solve a problem or difficulty.Our approach should not only be towards solving the problem or taking advantage of the opportunity, but also trying to analyze the consequences on the parts or the whole in question. Security in the decision and in the results to be obtained is fundamental, so we must take into account the risks and the level of certainty, or not, that we can achieve.but trying to analyze the consequences on the parts or the whole in question. Security in the decision and in the results to be obtained is fundamental, so we must take into account the risks and the level of certainty, or not, that we can achieve.but trying to analyze the consequences on the parts or the whole in question. Security in the decision and in the results to be obtained is fundamental, so we must take into account the risks and the level of certainty, or not, that we can achieve.
Decision-making process
The decision-making process consists of several steps or stages that are:
- Definition and identification of the problems to be solved or opportunities to be exploited Diagnosis and analysis of the causes Determination of possible alternatives Analysis and evaluation of the alternatives found Selection of the best alternative Implementation and execution of the actions to be taken Follow-up and process control.
Definition and identification of problems to solve or opportunities to take advantage of
This initial step is extremely important, since if we do not define and identify the problem to be solved, or the opportunity to take advantage of, we would be working on a wrong basis and all subsequent actions will be distorted, not allowing us to achieve the necessary results. It is essential not to confuse the problem itself with the symptoms that it causes, an issue that occurs frequently.
Another aspect is the decomposition of the problem into elements, since in most cases it is complex.
Diagnosis and analysis of the causes
Once the problem has been identified and defined, it is necessary to carry out an effective diagnosis that allows an adequate analysis of the causes that cause it to be carried out, to determine the objectives to be pursued with the decision, which must allow us to reach a satisfactory solution.
Determination of possible alternatives
The determination of alternatives should not be limited, the more they are found, the more possibilities of finding the right one, we express this since on many occasions when one or two alternatives are found (sometimes even one) the tendency is to stop the search for the alternatives. We say this since, as we will see later, we even find alternatives that could provide a solution to what we need, but for certain reasons its application is not feasible.
Analysis and evaluation of the alternatives found
The group of alternatives found must be subjected to a rigorous analysis and evaluation since not all of those found meet the requirements to apply them with the necessary effectiveness.
For its analysis and evaluation we must see if there are possibilities for its application in terms of time, available resources, financial possibilities, personnel to carry it out in fact, if it meets the proposed objectives, what risks or consequences it could bring to us for the different areas of the organization or for it as a whole.
Selection of the best alternative
With all the elements previously provided, as well as others depending on the organization in question, we must select the alternative that most fully meets the proposed objectives.
Aspects that must be taken into account for this are: if the solution it allows is partial or total, level of risks, flexibility in the face of changes, level of certainty in the solution, cost-benefit ratio and others depending on the situation.
Implementation and execution of the actions to be taken
Once the alternative to be used has been selected, it is necessary to draw up a plan that includes all the fundamental aspects for solving the problem or taking advantage of the opportunity. This plan must contain the necessary actions correctly programmed, the cost thereof, definition of the people who must comply with it and the execution period.
Monitoring and control of the process.
It is not enough with the preparation of the plan and the goodwill of the filmmakers and executors, we must give adequate monitoring and control to the process not only to verify its correct execution and the disposition and state of mind of the executors, but also to make corrections in the necessary cases.
In the decision-making process there are two elements of great importance on which great attention must be paid, these are: the quality of decision-making and the acceptance of the decision by those who must carry out the actions.
There are various criteria on which of the two should prevail, with a not inconsiderable group that consider quality should prevail.
In the opinion of this author, both aspects are transcendental and of great importance, which is why priority attention should be given to both, since the effective development of a decision depends largely on the acceptance of the people who must execute them, not only of the quality of the same, however if under certain special situations it is essential to prioritize one over the other, this must be done while giving adequate attention to each of the aforementioned aspects.
Aspects that influence decision making
We carefully study the steps to follow for decision making, however in all cases it is not necessary, nor are they carried out in detail as we saw, only in cases of high complexity and importance are these faithfully followed. Human beings have resources and capacities that, together with their intuition and experience, allow them to make adequate decisions in a much shorter time and with satisfactory results.
However, some researchers have raised aspects of interest related to the subject, such is the case of Herbert Simon that, as expressed in Stonner, JF Administration exposed the term of limited rationality to indicate that:
“Decision makers in real life are faced with incomplete information about the nature of problems and their possible solutions, lack of time or money to collect more complete information, distorted perceptions, inability to remember large amounts of information, and the limits of their own intelligences ”.
Also exposed in Stonner, the researchers Tversky and Kahneman delved into the previous theory by stating that people make decisions based on empirical aspects, that is, from practice and experience, using elementary rules or procedures to identify and determine solutions. Raising this, three empirical processes for decision making:
“People often judge the possibility of an event by contrasting it with their memories. it is easier to remember events that occur frequently. Therefore, of the events that are more available in memory, it is thought that they will have a greater chance of happening in the future. human memory is also affected by the recent occurrence ”.
"People tend to weigh the possibility of an event by comparing it to a pre-existing category."
“People don't jump to conclusions from nowhere. In general, decisions start from an initial value and then adjustments are made to that value in order to reach a final decision ”.
The application of these aspects (limited rationality and decisions based on the empirical) have an essential utility in saving time in decision-making, but certain subjective judgments and the appearance of distorting elements are not excluded.
Techniques and methods for decision making
Decision-making can be done individually or in a group, in what has been discussed so far the focus has been related to the individual, so we will address some methods and essential aspects of group decision-making.
The most used methods for group decision-making are by majority and consensus.
The majority method is essentially used when the time we have is short or when the importance of the problem is not great, it consists in the fact that the decision adopted represents the criteria of the majority of the group. It is fast, although sometimes it can present some disadvantages when the minority does not feel committed to the decision made by having the same other criterion than the one taken, so it is necessary to treat and convince these people to obtain their understanding of the agreement adopted., the latter is very important for the achievement of the expected results.
The consensus consumes more time in its development, being used frequently for important decisions, it supposes that all the members of the group agree and assume the final decision as their own. It has certain characteristics such as: its use achieves a high participation, hence the level of commitment of all members of the group; It requires a high level of communication, where everyone who wishes to intervene does so being beneficial for everyone to express themselves, and above all with respect for all opinions.
There are several techniques for group decision-making, the most used being brainstorming and interaction, each with its specificities that we will detail below.
In both cases, there is a group of general principles for use such as:
- The objective of the meeting must be clearly conceived and must be the domain of the members of the group.The group during the meeting must be guided and directed by someone who motivates and guides them properly (a facilitator), who must have experience and mastery of the technique to be used. The facilitator should stimulate the generation of ideas, spontanely and without restrictions. All group members can freely express their criteria, which should not be criticized or refuted. The ideas raised are accepted. and not debated. The ideas presented should be collected on banners, blackboards or other means that allow visualization by all. The ideas are collected in a depersonalized way and with phrases that clearly express their content.
Brain storm.
Together with the above general principles, this technique has the following characteristics:
- Its greatest performance is in small groups. It is of great use and importance for carrying out diagnoses, that is, collecting information about difficulties, problems or others. During the meeting, the members of the group express their ideas related to the topic in question, what It is essential that there are many ideas, they are not discussed when they are presented by the participants even if someone does not agree.
Interaction technique
It has advantages over the prior art when the members of the group are from different specialties.
- As in the “brainstorming” criteria are issued and recorded, but in this case they are enriched or expanded, this is done with the consensus of the group. Once all the ideas are collected, they are reduced taking into account the that are part of others, or that there are repetitions which are eliminated. Once the list is reduced, the ideas are weighted by their importance, establishing priorities according to the criteria of the group.
Group decision making has advantages, but also disadvantages, so it should be used depending on the existing situation and not at all costs.
It allows among other aspects: to solve problems in the form of cooperation between group members; that the members express themselves with complete freedom of expression; that a rational and beneficial agreement can be reached in the end for the group or the organization as a whole; it is not to satisfy all individual desires; It is not to impose ideas of some member of the group or of people of higher occupational category.
Special situations in decision making
Our time is colored by a vertiginous development of technology or by profound economic changes, which is why sometimes special situations arise, decisions of very high complexity or importance, little-known issues, the intervention of a large number of variables, situations of great uncertainty. or turbulent changes, among others, so that the heads of the organizations are not in a position to make the appropriate decision, this requires the application of a more scientific approach using specialists with capacities and skills in mathematics, systems to be used in computers, not ruling out that these people use their intuition and other subjective aspects.
The joint work of these specialists with the heads of the organization should not be carried out arbitrarily, but rather through a process that guarantees proper execution and results in decision-making.
The process must guarantee: the identification of the problem, the preparation of representations or models on the events or work processes with difficulties, preparation of a prototype, determination of the solution that is considered the most appropriate and subsequently the implementation, monitoring and control.
For these special situations certain techniques are used depending on the specific needs and requirements.
Summary
We study how in a large number of situations in our existence, individually or in groups, and when faced with dissimilar situations of family, social or work life, we face moments in which we must make a choice.
A decision is a choice before certain alternatives, where in many cases we are left in doubt as to whether or not we make the most correct decision.
We saw that we are not always faced with the same situation, sometimes we must solve problems or difficulties presented, which requires us to restore the situation to its original or previous position, and as the decision on other occasions must give us the possibility of taking advantage of opportunities to over-meeting scheduled goals.
In the same way, problems do not appear under similar situations, so, in recurring problems, whether simple or complex, and if we are in a position to have a command over their composition, being able to project ourselves with foresight and certainty, we can elaborate procedures, policies, rules that allow decision-making, then we are facing a structured decision-making.
On the contrary, if the problem presented is not recurrent or its complexity, importance or implication does not allow the use of previously elaborated means, we are facing an unstructured decision making.
The elements that were exposed should be taken into account and carefully studied for correct decision-making.
The decision-making process consists of several steps or stages that we reiterate:
- Definition and identification of the problems to be solved or opportunities to be exploited Diagnosis and analysis of the causes Determination of possible alternatives Analysis and evaluation of the alternatives found Selection of the best alternative Implementation and execution of the actions to be taken Follow-up and process control.
Regarding the quality of the decision, as well as its acceptance, let us remember that both are transcendental and of great importance, so priority attention must be given to both.
Decision-making can be done individually or in a group, the most used methods for group decision-making are by majority and consensus.
The majority method is essentially used when the time we have is short or when the importance of the problem is not great.
The consensus consumes more time in its development, being used frequently for important decisions, it supposes that all the members of the group agree and assume the final decision as their own.
Study the characteristics and elements of each one.
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