FREE ESSAY ON DECISION MAKING

DECISION MAKING

INTRODUCTION
The purpose of this paper is to analyze the decision -making process that was involved in
appointment of company president, in the company where I personally worked. Mr.Zutshi,
the company president faced a very critical decision making situation while appointing
new successor for the company, after his retirement. A Chief executive officer's decision
has considerable impact on the performance of the organization. Decision-making is one of
the most important recurring responsibilities facing managers in organizations. A
high-quality decision helps an organization accomplish its strategic goals and also meets
the needs of the organization's employees, executives, stockholders, consumers, or
suppliers. In his book called Decision Making, Paul Moody (1983) defines decision  as an
action that must be taken when there is no more time for gathering facts. The Problem is
how to decide when to stop gathering facts. The solution varies with each problem we
attempt to solve, for gathering facts costs time and money.
RELEVANT RESEACH
Peter E. Druker (1967), lists five elements of decision process in his book, The
effective Executive:1) Clear realization that the problem is generic and can be solved
only through a decision that establishes a rule, 2) Definition of the specifications of
the solution, or the boundary conditions, 3) Derivation of a solution that is  right,
that is, one that fully satisfies the specifications before attention is given to the
concessions needed to make the decision acceptable, 4) The building into the decision of
the action to carry it out, 5) The feedback that tests the validity and effectiveness of
the decision against the actual course of events. Druker goes on to explain that a
decision is a judgment and, as such, is rarely a choice between right and wrong. At best
it is a choice between  almost right and  almost wrong.
Paul Moody (1983), has written in his book, Decision Making, that, if a company has a
long-standing policy of acting in a certain situation in a particular way, then it is
easy to make a decision that is consistent with past history. However, if an organization
is very volatile and a historical pattern has not been established --or if the nature of
the decision is such that actions are highly dependent on the factors known to only
higher-level personnel in the organization--then the decision assumes major importance.
He further adds that, where the human impact of a decision is great, its importance is
great. This is particularly true when the decision involves many people.
Paul C. Nutt (1989), states in his book, Making Tough Decisions, that,  the best that a
decision maker can do is follow steps that's increase the prospects of understanding
foreseeable risks and prepare for possible outcomes. Most decisions have uncertainty,
ambiguity, and conflict. Uncertainty and ambiguity arises when key elements in a decision
cannot be characterized. Conflict can stem from ambiguity, or it can result from the
disagreements among key parties with stakes in the decision (Freeman, 1983).
In the book called Decision making at the Top, Gordon Donaldson & Jay W. Lorsch (1983)
state that, strategic decisions are not the product of simple economic logic alone.
Because these decisions often depend on forecasts of the future events, they involve
considerable uncertainty and ambiguity. Corporate leaders' desire to assure the survival
of their company provides the driving force for their initiatives and strategic choices.
James G. March (1994) has written in his book, A Primer on Decision making, that,
Organizational decision making is a combination of talk and action. The making of
concrete decisions in an organization is an exercise of practical, contextual judgment.
Decision making normally presumes commitment, the willingness of decision-makers both to
devote time and energy to deciding and to accept responsibility for the uncertain
consequences of their actions.
ANALYSIS:
Case: At 60, Mr. H L Zutshi, the company president, decided he would retire before the
mandatory retirement age of 65. He did not reveal his decision to anyone until he reached
62, and at this time he confided to his best friend and the most powerful board member
that he would retire imminently. Mr. Zutshi proposed that Mr.S K Kherr, Vice President,
Administration, a very able and experienced executive, succeed him as president. Mr.
Zutshi's friend vehemently opposed Kherr's candidacy, and forcefully argued that S N
Mathur, vice president of manufacturing, was the best qualified to be the new president.
This case presents a situation where the decision-making process has completely failed. 
Analysis: The selection of the president is one of the most important decisions a board
of directors makes. Not only does a president have an enormous impact on the fortunes of
a company, but the very process by which the executive is picked influences the way
employees, investors, and other constituencies view the company and its leadership. In
short this decision will effect the whole organization.
Considering that Mr. Zutshi was approaching the mandatory retirement age, and that a
significant difference in opinion between Mr. Zutshi and the most powerful board member
as to who should be the new president, it is clear that the board (the president is
almost always a board member) was extremely derelict in its duties. The decision-making
process was greatly undermined, with huge ramifications for the organization. 
In the Indian way of decision-making, the single most important element in solving such
problems is defining the question. Because the Indian system is very time consuming and
involves many participants (higher level managers) from various functions within the
organization, the Indian system is suited to big decisions. A change is president is one
of the most crucial events in the life of a company, and it is an event in which the
board of directors plays a central decision - making role. Because the new president must
be chosen soon, it was already too late to make an effective decision. The decision
process will inevitably be marred by politics and compromises, resulting in a weaker
organization and lower morale. 
A successful succession process requires that the board members first define the
question: Always view the problem from different perspectives. Each board member should
have an independent point of view. Board members should be open-minded. Every board
member should seek information and opinions from a variety of people to widen his/her
frame of reference. Board members need to be active players in shaping the company, and
one of their key responsibilities is to oversee the entire succession process. 
The Company has an effective management development program for the entire organization.
It is comprehensive and its part of basic personnel program for the whole company. It is
well understood by everyone throughout the organization. It tracks managers' assignments,
identify their development needs, and establish the career paths that will prepare them
for higher responsibility. The board draws on information from the management development
program to evaluate each manager in relation to the qualities that everyone has agreed
are important for the president. As Paul Moody (1983) mentions in his book, Decision-
Making, that, given that a number of methods can be used to arrive at a decision, how can
we determine which one to use at a particular time? Obviously, this problem relates to
the importance of the decision. Hence a decision related either to the selection of an
individual for a major management position or to a significant capital expenditure would
require significant prior research.
It is important that the board make sure that the succession process begins about four or
five years before the president is expected to step down. This time frame gives room for
maneuver if necessary, and that is important. The board has to identify candidates who
could be moved to the top of the organization. If there is only one real candidate to
succeed the president, the president needs to go out and bring new people into the top
ranks of the company - to get the pool of successors up to three or four strong
candidates. Getting these new people established and reviewing their performance takes
time, so the board needs to insist that the process start early. This requires great
communication between board members, which does not seems to exist in this case. Often
times the effective decision-making process in undermined because the board is passive,
and board members are friends with the president. Mr.Zutshi, did not reveal his decision
until he was 62, leaving almost no time for the board to select new successor.
There are many pitfalls in making an effective decision if the question is not examined
from all perspectives. Certainly Mr. Zutshi and his friend on the board had strong
opinions as to who should be the next president, and a strong difference in opinions is
not unusual, and in some cases, it can be healthy. It is very possible that both Mr.
Zutshi and the board member got caught in the confirming evidence trap because it is so
insidious. As Paul C. Nutt, (1989) notes in his book, Making Tough Decisions, that,
barriers to improving decision making stems from clashes in interest, which can produce
divisiveness and conflict. Decision-makers caught in such a trap find it impossible to
systematically seek out and consider information that reveals what decision is about, let
alone mingle chance information about future conditions with objective information to
carefully compare alternative courses of action.
It is critical to the whole organization that the president makes sure it is the smart
choice. So Mr.Zutshi should put his decision to the test:
* He should check to see whether he is examining all the evidence with equal rigor and
should avoid the tendency to accept confirming evidence with equal rigor and without
question. 
* Get someone he respect to play devil's advocate, to argue against the decision he is
contemplating. Better yet, build the counter argument himself. 
* Consider the decision with an open mind. Is he really gathering information to help him
make a smart decision, or is he just looking for evidence confirming what he think he
would like to do? 
A first step in making a decision is to frame the question. It is also one of the most
dangerous steps. A poorly framed problem can undermine even the best-considered decision.
When others recommend decisions, examine the way they framed the problem. Challenge them
with different frames. The process should include all parties that are affected by the
decision. When a consensus is reached, the decision can be easily implemented because
people implementing the decision were intimately involved in the decision-making process.

The disagreement between Mr. Zutshi and the board member regarding who should succeed Mr.
Zutshi has sabotaged the effective decision-making process. It is highly unlikely that
the next president will be the best candidate, and politics will compromise the integrity
of the decision process. Naturally, there are enormous implications for the economic
health of the organization. 
CONCLUSION AND RECOMMENDATION:
In conclusion there are a multitude of factors affecting the quality of decisions made by
any given manager that include but are not limited to: personality characteristics,
experience, the context of the situation at hand, strategies used and critical thinking
and analysis. It is only a logical conclusion that the manager will implement decisions
with an enthusiasm and dedication that is equivalent to their belief they have selected
the correct action for the situation. If Mr.Zutshi follows some of the simple steps
outlined and avoids the pitfalls, he can and should have complete confidence in the
decision made.
Making decisions is a major portion of the manager's responsibilities. It is an aspect
that cannot be taken lightly nor can it be done in a hasty manner. Decisions that are
made with deliberation using different kinds of processes, however, can lead the
department or company to better and/or more profitable operations. When decisions are
indeed made in this manner, the manager should feel confident that he or she has made an
appropriate decision and is the best option given the information available at the time.
This does not mean to say that the manager will always make the correct decision; lack of
information or situational changes can lead to faulty analysis. However, if the manager
uses critical thinking and proven successful decision-making strategies, he or she can
and should be confident in whatever action they have decided is appropriate. 
Bibliography
Reference
Drucker, P.(1967). The Effective Executive. New York: Harper & Row Publishers.
Moody, P. (1983). Decision Making. New York: McGraw-Hill Book Company.
Nutt, P.C. (1989). Making Tough Decisions. San Francisco, California: Jossey-Bass, Inc.,
Publishers.
Donaldson, G. & Lorsch, J.W. (1983). Decision Making At The Top. New York: Basic Books,
Inc., Publishers.
March, J.G. (1994). A Primer On Decision Making. New York: The Free Press.