many uncertainties when applying this model to make decisions due to the
following type of information constraints imposed up people:[9]
. Limited attention
. Limited memory
. Limited comprehension
. Limits to communication
These, plus other factors, have given rise to the notion that rational
process indecision is bounded. Herbert Simon, in this regard, has proposed
that, “within bounded rationality, individuals and groups often base their
decisions on satisfying the search for what is good enough in the
circumstances, rather than optimizing.”[10]Often, managers have to face
vast number of information and required to make a decision in a short time,
it is impossible for him to analysis each problem and weigh each
alternatives from the limited mental capacity. [11] Therefore there is a
limit to how rational a manager can be.
Many models are built upon the uncertainty of the solution searching steps,
while in all actuality managers are not making the decision in a vacuum.
They can use formulas or models to aid their decision making process.
Therefore, it is important for an effective manager to pay attention to the
following points when making the decisions:
The intuitive decision-making process always plays an important role in
combination with the rational process. Managers build up long experience
with organizational issues, which provides them with a gut feeling or hunch
about the correct response. The large organizational decisions are not only
complex, but also ambiguous. In such a situation; previous experience and
judgment are needed to incorporate intangible elements. Most of the time,
without solid proof that problems exist, the intuition will tell the
managers that there is or could be a problem that requires him to act
before he is able to sit down and analyze the problem.
An effective manager knows how to cooperate with the internal and external
resources. Of course, as decision-makers, the manager should not become an
“autocrat”. Voice from internal will be listened, and sharing the opinions
and having joint discussions to reach the interpretation of the goals and
problems accordingly the agreement will be easier to reach and find
solutions to the problem. External comments or reactions have great
impact on decisions makers. On one hand, managers are easily misled by the
hypothesis given from the external environment and can forget to look
broader and further. On the other hand, proactively utilizing the
external resource can help managers to see better and further; therefore,
objective evaluation of those opinions will be helpful to generate wide
range of the problem solving approach.
Creativity is vital to search for more alternatives during the crisis
moment. When there are few possibilities to solve the problem, people can
easily stick to the first seeming possible solution and start to convince
themselves that there is no other better ones. Therefore they are stuck in
the corner and forget to look for the other alternative. Dynamic thinking
and radioactive mentality will help the manager to look the situation from
a different view, there fore create the new approach.
An effective manager will not only look to the short-term profit. He sees
further. He must be able to judge where the future business will be lead
to from the decision made today. Those decisions, which bring profits today
but will undermine business tomorrow, will be dropped.
The difficult decisions are always accompanied by the ethical issues. The
best solution for the company’s profit might not be the right ones
according to the laws or regulations. On making decisions, the ethical
dilemmas cannot be neglected, and the outcomes of unethical behavior can
affect reputations, trust and career path. Results have been as severe as
loss of employment, physical harm to individuals, corporate bankruptcy and
even impacts to the economy.
The scandals of 2002, including Enron and WorldCom, resulted in
regulations having created a cultural shift particularly in financial
fields that has renewed emphasis on ethical business behavior. What
distinguishes mediocre level managers from the truly effective managerial
leader is an ethical dimension. There exists different moral stages that
guide people in their everyday decision-making. Those people in the
“principled level…make a clear effort to define moral principles apart from
the authority of the groups to which they belong or society in general”[12]
Learn from the formal fail experience is very important. Managers are apt
to stumble down the same failure-prone path over and over again without
learning. Learning is thwarted when leaders do not tolerate mistakes. In
such an environment, people conceal bad out comes. Consequently, people in
the same company, or the same person in different period will repeat the
similar mistake. A good manager will see the mistakes as an education and
correct himself constantly according to the new situations. Generally
speaking, to be an effective decision maker, managers need to work closely
with their team and “integrate their faith, values and business practices”.
[13] In the presentation we will use the case from “Nestle Company” to
show why bad decisions had been made and what the consequences are. [14]
2. Conflict Management Skills
According to Jean Miller from TIG (Taking It Global) “Conflict is the
source of all growth and is an absolute necessity if one is to be
alive.”[15] An effective manager must be able to manage conflict and also
learn from it to help the organization to grow and be challenged. Conflict
is not always negative but can prove to have some positive outcomes as
well. The effective manager can balance this delicate relationship and
works hard to handle conflict with care.
As further stated in the article, conflict can be viewed as something to
manage or something to resolve. John Burton, one of the world’s leading
scholars in the field of conflict resolution commented “…resolution means
terminating conflict by methods that are analytical and that get to the
root of the problem.” Miller explains that “conflict management is a multi-
disciplinary, analytical, problem-solving approach to conflict that seeks
to enable participants to work collaborately towards its management.”[16]
Conflict is not easily avoided in any organization; therefore, an effective
manager is prepared by knowing how he will approach certain issues before
they happen. There are many books and articles written that address this
topic in great detail. An effective manager will consult these items and
use his or her own judgment in taking the advice of these publications.
According to James Cribbin, there are three basic kinds of conflict as
follows: Approach-Approach, Avoidance-Avoidance, and Approach-
Avoidance.[17] Approach-Approach would seem to be the most straight
forward type of conflict as there are two alternatives that are equally
feasible. If an employee is not being productive in the company this
affects how the manager’s boss views that department. The manager wants to
please his boss but also stay on good terms with his employee. In each
case the manager needs to approach the other person with open communication
and deal with the situation.
Avoidance-Avoidance is very difficult because whatever decision is made to
have negative consequences. If a manager knows that his boss is cheating
the company financially, he must make a decision. Tell on his boss and
suffer the wrath, or stay quiet and sacrifice his ethics. He would like to
avoid the conflict on either side, but staying quiet may not be an option.
The last type of conflict according to Cribbin is Approach-Avoidance. He
gives a clear example of a manager put in a situation in which he must make
a decision that will affect himself and his family. He wants to approach
the situation but also avoid it completely. He is given a great promotion
in the company but must move his family from his nice comfortable town to a
large metropolis city. Cribbin has outlined the options he has and
portrays what a difficult situation this could really be:
1. Accept the position and move
2. Accept the position, leave the family in the small town and visit them
on the weekends.
3. Bribe the family to make the move.
4. Ask the family to try to the new city for a year and then assess the
situation.
5. He can refuse the promotion.
6. He can try to stall in making the decision and hope that something
different will turn up.
7. He can try to convince his superiors that he can take the promotion
and contribute more from where he already is.
8. He can get another job.[18]
While this is a personal conflict for this manager, the skills a manager
uses to deal with personal conflict must be transferable to the workplace
environment involving other employees as well as superiors. If a manager
knows that there are always several options in dealing with a situation, he
will be more open to choosing one that will work for that unique conflict.
As mentioned earlier, consistency is an important part of an effective
manager and can be applied to conflict as well. A good manager is
consistent in executing rules and regulations with his employees. He will
not let close relationships with employees cloud his judgment and rationale
for making a decision. When conflict arises, the employees will know that
each person will receive the same treatment regardless of who they are.
According to Robbins, “Consistency can relate to an individual’s
reliability, predictability, and good judgment in handling situations.
Inconsistencies between words and actions decrease trust. Nothing is
noticed more quickly… than a discrepancy between what executives preach and
what they expect their associates to practice.” People want to be able to
