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Importance of Decision Making

   

Added on  2020-03-28

17 Pages4285 Words150 Views
Part 1: Introduction:Decision-making is an important task of the managers in terms of maintaining theorder and harmony of the workplace. However, this assignment attains a differentperspective. As a matter of specification, the reference to Simon’s quote and conceptslike bounded rationality, system 1&2 thinking and judgement and decision-makingprocess shed light on the components essential for decision-making in workplace(McCain, 2015). The segment is divided into activities, the first one of which providesan insight into the summary of Simon’s quote. As a sequential step, the selectedaspects are briefly described. Therefore, the aim of this essay is to relate boundedrationality, system 1& 2 thinking and judgement in decision-making with Simon’squote. Using real life workplace scenarios in this context expands the scope and arenaof this essay.Summary of Simon’s quote:When a child is born, its mind is fully a blank sheet or tabula rasa, as proposedby philosopher, John Locke. However, with the attainment of maturity the childachieves an understanding of his surrounding world. This maturity is the initiationpoint of formation of complex theories and concepts. However, the surroundingwords entrap him within an ambience of stress, which limits his thinking skills (Tay etal., 2016). Herein lays the correlation with the limitation of the human mind, whichSimon uses in his quote in terms of forming and solving complex problems. This isapplicable mainly for the corporate world people, as they are entrusted with theresponsibility to expose rational behaviour for the execution of the business activities,especially decision-making (Anderson et al., 2015). Rationality is a crucial ingredient

for undertaking decisions and overcoming this limitation. Conscious approachtowards overcoming this limitation, irrespective of professional or personal life,reflects the true essence of objective rationality (Farrell, Goh & White, 2014). The aspect of limitation contradicts the projection of objective reality. It is at thisstage, where it can be assumed that the employees would attempt to undertake thecorrect decision. There are high chances the decisions undertaken at this stage wouldnot be the appropriate one. However, the decisions might reach to the level ofapproximation (Foss & Weber, 2016). Exposure of objective rationality is importantfor maintaining the balance between the personal and professional life. On thecontrary, if this balanced is destroyed, the individual attains the predicament similar toa handicapped person. For this, session wise lessons need to be incorporated into thelife of the individual, so that he gains an easy understanding of the events and blowsof fate (Farrell et al., 2014).Concept 1: Judgement and decision making processesAccording to Pettigrew (2014), decision-making is one of the crucial aspects forany company and organization. Involvement of the stakeholders and shareholders inthe decision-making process helps the personnel to understand the effectiveness andappropriateness of the proposed decisions. Proper, effective and judicious utilizationof the gathered solutions reflects the undertaking of appropriate decisions in case ofthe personnel (Kaplan, 2013). Aligning it with Simon’s theory, hard pressure and drabmonotony add to the complexities of the employees in taking decisions. Under suchsituation, rationality takes a backseat; where there are high chances of the decisionsbeing an ordinary one, with which the purpose gets served. Here, the limitations of themind results in improper judgment (Glimcher & Fehr, 2013). Evaluation of theproposed decision justifies the judgement undertaken by the managers. Maintenance

of frequency in the execution of evaluation helps the personnel to achieve the trust,loyalty and dependence from the customers in large scale. Confidence towards theeffectiveness and feasibility of the undertaken decision sheds off the aspect of error ofjudgment and enhances the efforts of the managers towards the betterment of theorganization (Zsambok, 2014). Therefore, it can be said that decision making andjudgement are interrelated. Application of rationality in thinking upgrades thejudgemental capacity of the employees. On the other hand, inability to overcome thelimitations of the mind and the surrounding circumstances attaches the aspect of“error of judgement” to the decisions undertaken by the employees. The secondsituation misbalances the personal and professional life of the employees. Here, evenif they are provided with various kinds of solutions for the issues, they would fail, asthey would be lacking the basic understanding of right and wrong actions (Rezaei,2015). Concept 2: System 1& 2 thinking:This concept is one of the major issues inside the organization and this has to bein line with applying into the organizational situations. Thinking is one of the mostimportant parts of a person’s thinking process and it constitutes of two processes. Thefirst part is about the mind’s fast, intuitive approach to a problem and the second oneis about the analytical and slow treatment of a problem by the experts (Pettigrew,2014). Theoretical thinking helps the managers to envision beneficial deals, tradesand transactions for the organization (Xu, 2015). Rationality in thinking is assistancetowards the achievement of loyalty, trust and dependence from the customers(Glimcher & Fehr, 2013). Certain circumstances limit the thinking skills of theemployees. These circumstances are- surrounding environment; problems; size of theproblems and the thought of the efforts, which the employees need to put in for

solving the problems. An essential component of these thoughts is rationality in termsof achieving effective solutions for the encountered issues. The problematiccircumstances compel the employees to fail in the application of system 1 thinking.This failure acts as an obstacle for the counsellors to apply system 2 thinking (Kaner,2014). Concept 3: Bounded rationality:Bounded rationality is also one of the major themes in the case of decision-making process for the organizations. This theory talks about the decision making ofthe individuals within an organization. The individual decision makers work as thepeople who will be able to satisfy the needs of the customers (Kaner, 2014). Therationality of the decision makers is limited by the tractability of the decisionproblem. There might be more than one solution but the best of the solution should befound in this case that would satisfy the needs of the customers (Rezaei, 2015). Theword “bounded” relates with the “limitations of the mind” as projected by Simons inhis theory. Limited capacity of the mind of the employees to solve the issues poses asan obstacle in the exposure of rationality. For practical application of rationality,employees need to conduct consistent evaluation, which would bestow upon them theopportunity to overcome this limitation. Conscious approach is needed towards thisevaluation, where rational thinking would definitely be one of the considerations(Kaplan, 2013). Summary of theory about the importance for management decision-making:The theory of rational choice is appropriate in terms of the managerial decision-making. This theory assumes that individuals always make logical decisions.Countering this, the word “always” attains interrogative parameter (Anderson et al.,2015). This is due to the fact individuals sometimes lack the basic understanding of

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