The Importance of Effective Decision-Making Inadequate information, data, and knowledge. For rational decision-making to be accurate, reliable, and complete, information about various aspects of the problem under investigation is necessary. Possible future trends can be estimated with the help of such information. This facilitates rational decision-making. However, adequate and reliable information may not be available at the time of decision-making. As a result, the decisions may become defective or irrational or may prove faulty in the course of time. This is how decisions become irrational. Leader’s choices and actions are the result of the leader’s experiences (Bennis & Goldsmith, 1997). Leadership in organizations is driven by uncertainty. How leaders make decisions based on that uncertainty determines the performance of an organization (Hatch, 1997). Decisions are made on the basis of information available about various environmental variables. However, the variables are many and complex in nature. They may be related to political, economic, social, or other unknown variables. It is not possible to study all such variables in depth because of inadequate information or data. This leads to inaccuracy in decision-making. Two variables that drive uncertainty are complexity and speed of change. Both contribute to the state of current and future business environments (Nonaka & Takeuchi, 1995). When practitioners apply academic decision-making theories and styles in
Leadership is, and always has been, a vital aspect of social and economic constructs. It is essential to the survival of societies, industries, organizations, and virtually any group of individuals that come together for a common purpose. However, leadership is difficult to define in a single, definitive sense. As such, theories of leadership, what constitutes a great leader, and how leaders are made have evolved constantly throughout history, and still continue to change today in hopes of improving upon our understanding of leadership, its importance, and how it can be most effective in modern organizational cultures.
17. Environments exist when decision makers lack complete certainty regarding the outcomes of various courses of action, but they are aware of the probabilities associated with their occurrence
It feels as if we rarely have situations with sufficient data to make decisions clear and absolute. Maybe those situations do occur frequently, but because they are obvious, we don’t even register them as decisions. Leadership hinges on effective decision making and judgement calls. That includes gathering information for analysis when available, but also recognizing how not to be caught in analysis paralysis. Effective leaders constantly evaluate the situation, recognize the benefits, risks, and constraints and move forward. Nothing impedes an organization more than inability to commit to a path forward.
Information theory is the modern theory of organization that views organizations as requiring constant input of information in order to continue functioning systemically and productively; assumes that a lack of information will lead to chaos in organizational operations (p.165). Decision making includes making a choice to alter some existing condition, choosing one course of action in preference to others, expending some amount of organizational assets or individual resources to implement the decision, and acting with the expectation of gaining something desirable (p.194). Things that are important to the decision-making process includes increasing potential gains, monitoring the ongoing decisional process, and reducing the resource expenditure, uncertainty, and risk involved in achieving whatever gains are made (p. 195). Through every carefully thought out decision the government makes on behalf of its citizens there are risks involved. A risk involved in routine decision making is that decision makers may fail to perceive a need to reconsider existing policy or program assumptions on which routine decisions are based (p.195).
Businesses also have a variety of different leaders controlling the organization. Some executives attain a high-level position, placing them in a leadership role. However, there are many leadership positions that do not actually “lead” a team. A leader does not decide to be a leader overnight. A leader possesses a particular set of qualities and
Information theory is the modern theory of organization that views organizations as requiring constant input of information in order to continue functioning systemically and productively; assumes that a lack of information will lead to chaos in organizational operations (p.165). Decision making includes making a choice to alter some existing condition, choosing one course of action in preference to others, expending some amount of organizational assets or individual resources to implement the decision, and acting with the expectation of gaining something desirable (p.194). Things that are important to the decision-making process includes increasing potential gains, monitoring the ongoing decisional process, and reducing the resource expenditure, uncertainty, and risk involved in achieving whatever gains are made (p. 195). Through every carefully thought out decision the government makes on behalf of its citizens there are risks involved. A risk involved in routine decision making is that decision makers may fail to perceive a need to reconsider existing policy or program assumptions on which routine decisions are based (p.195).
J. (2004). Uncertainty during Organiational change: types, consequences and management strategies. Journal Of Business & Psychology, 18(4), 507-532
Leadership is a process of influencing activities of a particular group of people with the aim of attaining certain stipulated goals. In defining leadership there is need to consider a particular group, the common goals and the duties that are allocated to specific members of the group depending on their abilities (Fiedler 1976). Leadership therefore cannot successfully occur unless members of the group are given different considerations in terms of personality, traits and responsibilities. In considering leadership, it is important to look at the leader, the group or organization they are leading, the members as individuals and the situation; these are
The topic of leadership evokes curiosity about our leaders and their approaches in decision making, leadership styles and the effectiveness of their leadership. At time leaders are critiqued for their actions or views on different business affairs. In today’s working environment leaders set the tone, vision, and goals of any organization. Leadership has a huge impact on the culture of an organization and how people communicate within the organization (Northouse, 2009). The actions of leaders should inspire and positively impact their followers. The approach of leaders in handling adversities highlights many features of their character.
The topic of leadership evokes curiosity about our leaders and their approaches in decision making, leadership styles and the effectiveness of their leadership. At time leaders are critiqued for their actions or views on different business affairs. In today’s working environment leaders set the tone, vision, and goals of any organization. Leadership has a huge impact on the culture of an organization and how people communicate within the organization (Northouse, 2009). The actions of leaders should inspire and positively impact their followers. The approach of leaders in handling adversities highlights many features of their
The rational decision-making model describes a series of steps that decision makers should consider if their goal is to maximize the quality of their outcome. In other words, if you want to make sure that you make the best choice, going through the formal steps of the rational decision-making model may make sense. The following are the steps taken to come to a rational decision: 1. Identify the problem, 2. Establish decision criteria, 3. Weigh decision criteria, 4. Generate alternatives, 5. Evaluate the alternative, 6. Choose the best alternative, 7. Implement the decision, 8. Evaluate the decision.
Leadership is not an easy task. This is mainly because in every situation, the leader is expected to make some decisions that determine the direction that his company takes. As such, if he makes a mistake, there is a very great possibility that the whole organization will be misled (Charnes, Cooper and Rhodes 2). As such, the leaders need to be very effective in their decision making skills. This is mainly because if they. An indecisive leader is an ineffective leader there is no way that he can lead the organization to success. A leader needs to be very decisive so as to rally support from his staff (ubalt.edu
Organizations depend on the management and leadership skills of individuals in order to be successful. Leaders do not have to be managers but are equally important. Leaders are individuals who possess traits, behavior and abilities to influence others to accomplish tasks and other needed objectives for the company. Leadership is defined as “the ability of an individual to influence, motivate, and enable others to contribute toward the effectiveness and success of the organization. . . .” (House et al., 1999, pg. 184).
Many times when faced with a hard decision to make or one that involves many different factors or consequences the executive tends to look for “an educated guess” or “take a calculated risk” but no real calculation is done nor any education is obtained to deal with uncertainty concerning the decision.
The decision is to select an action among a number of actions that solves a given problem, that prevents a problem from happening, or that forces to apply new ideas for development. The need for understanding decision making process is increasing because the complexity of modern organizations is increasing, and because the modern organizations' effectiveness depends on the decisions made by the managers. The question is how to select the most appropriate action to solve the problem satisfying all stakeholders.