Abstract of Judgement & Decision Making Topics
Reading 1. 3 (Jackall, R. (1988)) : Looking Up and Looking Around In every corporation the crux of a manager’s charisma is his decision making prowess. Though there is an abundance of scientific theories and myths related to decision making, generally decisions are made in a highly rationalized context. A manager would prefer taking decisions that are based on well-formulated and generally agreed upon strategies rather than evaluating all the possible solutions to the problem in hand and then taking a well reasoned decision.
In contrast, managers are highly uncomfortable when faced with situations in which there are no specific procedures. Managers vouch for their own safety, safety in terms of reputation and therefore tend to look around and see what others opinions are, the perspective of their superiors. In situations where their reputation is at stake, or huge sums of money involved, or even the company’s goodwill is at stake managers tend to hesitate and wait for an opinion not due to lack of experience but due to fear of failure.
Another aspect why managers tend to look around is the accusation or blame time after a problem occurs because there is no means to track down responsibility. As a result of bureaucratic structure higher authorities can easily sneak out of such situations leaving the subordinates hung out to dry. A negative aspect in an organization would be milking a plant which is generally performed by a top level authority in order to maximize gains. The negative aspect in this is of course the organisation bears the brunt of it, moreover at the end of it all, the person assigned the charge of the milked plant eventually becomes the scapegoat.
Another aspect is that if focus remains on short term profit it may not be the key to lasting achievements though it may be profitable for a short duration. Likewise individuals look out for their own interests instead of the organisations when there are immediate personal benefits. Experience: In my experience this occasion has occurred a number of times when my manager tends to avoid the risky or rather sticky situations. As a newly appointed sales engineer in a trading firm my manager used to pass on a number of sales quotations to me for processing and finalizing the deal.
Since I was fresh to the field of sales I didn’t realize that he was forwarding me these sales orders just because those orders were from clients who weren’t credible enough. Though I managed to get a couple of orders, two of the orders went kaput in terms of payment for which I was held responsible. My manager washed his hands of me accusing me with not consulting him before I plunged to seal the deal. Though on the other profitable orders he too had a take on the credit but the blame only fell on me.
Reading 4. 3 (Wildavsky, A. , and Dake, K. (1990)): Theories of Risk Perception: Who Fears What and Why? This article mainly focuses on the outlook of different kinds of people, outlook such as the perception of risk of different products and practices, the diverse effect of a particular practice or event on these different groups, the intensity of the effect on these groups and the varying concerns on an individual basis to a diverse range of risks so as to understand the patterns of risk perception.
Fundamentally an individual perceives a hazard as a risk with greater anxiety if his wellbeing is likely to be in danger. If the hazard doesn’t seem to affect him or his beliefs in any way it wouldn’t be of any concern to him though it might be of ample concern to someone else who will be directly affected. By classifying people on the basis of social relations such as hierarchical, egalitarian and individualist, along with the cultural biases that support them, turned out to be the best way to account for the perception of risk.
It was found that people who support egalitarianism would be more inclined to risk taking individually but as a social group would be more risk averse, whereas those who favour hierarchy tend to be the opposite. An individualist would be risk taking when it comes to technology as they see an opportunity for growth. These observations were in respect to technology and environment but in terms of personality structure there is no evidence as to variation in risk perception.
In spite of these observations one cannot presume that risk taking is preferred by cultures of individualism and hierarchy neither can one presume that egalitarians are always risk averse this is because as risks pertaining to technology and environment are feared by egalitarians in a similar way social deviance is feared by hierarchists and the risk of war is feared by individualists. In conclusion, depending on the object of attention risk perception also varies. Experience: During my tenure in a shipping company as a procurement executive I had once the task to procure water pump for eight ships.
Since this was a high priority requirement and involved huge costs I made sure I had researched the market well and decided on a particular brand (Grundfos) even though there was another pump (Davey) that perfectly suited our requirements. The reason was that Davey’s technical support was really bad. So I forwarded the research report to my MD who called for me and told me to go ahead with the purchase of the Davey pump telling me that it was profitable and worthwhile to get our own technicians trained since we could use more of their pumps.
To me it seemed like a big risk especially since it involved a huge cost but to him it didn’t seem a risk at all. Reading 6. 1 (Lindblom, C. E. (1959)): The Science of “Muddling Through” The author compares and contrasts two different approaches to policy making – Rational comprehensive method (Root) and the Successive limited comparisons (Branch) and explains why branch method is a better approach in formulating policies. The root method starts from the fundamentals, improving on the past only if included in a theory.
This method cannot be used for complex problems simply because the facts needed require a gigantic compilation of observations. Whereas the branch method continually springs up from the present situation in a step by step manner, varying in small degrees and is more appropriate for complex problems because facts requirements are small and are relevant to the policy. In the root method, initially values or objectives have to be clarified before the alternative policies are examined. Disagreement is unavoidable even when objectives are clearly stated.
Another difficulty is ranking of conflicting values since objectives may not have the same relative values. Whereas in the branch method values and policies are selected simultaneously and only incremental values are focussed on making it simpler. Secondly, in the root method, ends are initially chosen in a means-end relationship and means are then developed whereas in branch method means as well as ends are simultaneously chosen. Thirdly, in the root method decisions are termed “good” if an objective is achieved even when the decision hasn’t been described.
In the case of branch method where the objectives are defined only by the incremental values it is still possible to determine if the policy achieved the desired objective. Again in the root method it is impossible to take all factors into consideration due to limitations unless the complex problem is simplified whereas the branch method by limiting the policy comparisons to relevant ones only differing slightly from the current policy the problem is simplified. Finally policy is made and re-made endlessly in the branch method.
Nevertheless, branch method does have its disadvantages but is far superior for decision making in complex problems. Experience: In a new start up firm generally new policies are made often or even old ones are amended. During my work as a business development manager in a newly start up firm, I along with another colleague had the major task to formulate policies for my division. We decided to put together basic policies related to our past experience from similar jobs. This served as the base to us and the other employees of the division.
There were revisions to these base policies only when there was a need to amend it because it wasn’t working for us or when some mishap happened and a new policy was inevitable. But the fact was that the new policies didn’t vary from the old policies in such a large manner. So it wasn’t difficult for the employees to get accustomed to the new policy. And slowly we managed to put together a solid set of policies. Reading 7. 1 (McIntyre, R. M. & Salas, E. (1995)): Measuring and Managing For Team Performance: Emerging Principles From Complex Environments
The author of this chapter focuses on a fairly neglected but critical aspect namely teamwork that develops as teams mature over a period of time. The base for this research was military teams but due to the similarities between military and any organisation the findings can be extended to teams in an organisation too. The model formed for this research was The Team Evolution and Maturation (TEAM) Research Paradigm. The TEAM paradigm program observed and measured a number of tactical decision-making teams. Interviews were conducted, data instruments and self-report questionnaire were developed and employed to assist in the research.
The data analysed were scanned for evidence of behavioural trends that characterized team performance and the results were presented. Teamwork is the interactive behaviour between members of a team but depending on circumstance may include technical activities. Teamwork consists of four major factors-performance monitoring, feedback, closed-loop communication, back-up behaviour and also performance norms such as team’s self awareness and supporting interdependence among team-mates. Also effective teams modify their behaviour depending on the situation and do change over a period of time.
Another category that led to a better understanding of team performance was Team leadership. A team leader must be able to serve as models of teamwork in order to maintain the team’s effectiveness by engaging in teamwork and improving the team performance, being prepared technically, by listening and benefiting from the knowledge of team members, accepting and providing feedback but at the same time being cautious about his leadership style and the respect he commands. The role of each individual team member was also important in this context.
Team members should be individually competent so that effective team work can take place but at the same time be aware of the tasks of his team-mate. Also, a team member must not be dependent on an outstanding team member by evading responsibility. Experience: During my career in a software company a team was formed for every project. The team was formed depending on the requirement of the particular phase of the project, budget and duration. The team members were selected based on their experience. Meetings were conducted with the project managers on an individual basis as well as a team.
New ideas as well as difficulties faced by each team member were noted. Another method employed by the company was the team appraisal form in which team members rated their team mates in different tasks. At the completion of the project too a review of the performance of the team as well as the project manager was conducted. For the next project the outcomes of these reviews were specially taken into consideration to form another team. What I observed was as a team our performance improved and tasks were completed with less difficulty among team members.
Reading 5. 3 (Parkin (2000)): Expert Judgment This reading discusses about how the conceptualization of information can help in retaining information for longer periods of time and achieving expertise. It also classifies the characteristics of an expert and finally whether experts are better judges in their own domain. The short term memory in human beings can only absorb and process few chunks of memory and that too for a short period of time whereas to remember data for a longer period it is necessary to put them in long term memory.
Some recent findings have shown that in order to support the short-term memory, experts developed their long term memory thereby overcoming the limited capacity of the short term memory. But again the storage capacity isn’t what makes a difference between a novice and an expert. It is the ability of an expert to visualize and analyse as well as reason the patterns and data in such a way that it provides room for more planning that differentiates him from an amateur. In order to have this ability of an expert, practice seems to be the only solution.
Again being an expert in problem solving in a particular domain is not the only skill required by an expert but good planning skill too is critical. By deciding on the right methods and goals based on past experiences experts are more successful in predicting likely outcomes. Thus in order to facilitate quick retrieval of information from the long term memory it is necessary to conceptualize the largely disaggregated data that one acquires during education and training. Through a continuous series of trial, error and reliable feedback, information gets stored in memory and readily available.
But in spite of these characteristics experts may not be better judges also in their own domains. An expert’s decision would differ from another one based on his knowledge and experience. But again agreement cannot be the only criteria to judge an expert. Experience: During my career as a computer engineer I had done multiple projects. But I remember one of the projects in the early days of my career which was a fairly complex one. It was a complex one only because in spite of learning that programming language in my undergraduate course and also having been rained for it in the company I had to struggle through the coding because I hadn’t practised it actually. But the irony was that the project manager was quite an expert at it and had an extensive knowledge in that programming language despite the fact that this language came into actual practice long after his graduation. I later came to know that he had successfully completed a number of projects using this programming language. Thus practice and definitely the multiple projects he executed got him to this level of expertise. Reference 1. UTS November 2002, ‘Judgment and Decision making’, CN2118 Lectures & Reading Material.