Organizational Behavior

Assignment Case Study – Critical Analysis

Decision Making Process at Steel INC

Prepared by – Ahmed Ali

Master of Business Administration - General

May 2019

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 Analysis of Decision Making Process

1- Which biases in decision making can be identified in the performance of both

Pieterson and gack?
- Jack Gack most of the time uses his intuition. His behaviors show characteristics of
escalation of commitment bias because even though his decisions made with
intuition fails he keeps using it. He will recolve a complex and complected problem.
- John Pieterson used rational economic model while making decisions, but recently he
changed his strategy to the bounded rationality model, because now he takes less
time, considers less information while making a decision and still makes a sufficient
decision. However this speed in the process leads to anchoring and adjustment bias.
He uses competitor's prices as an anchor and adjust the company's prices a little in
accordance to other companies.

2- How can the identified biases be overcome?

- In John Pieterson’s situation, we saw the anchoring bias. He was not taking so much effort to
make a logical and correct decision. Instead, he was using other companies’ offers as a
baseline. He was unwilling to take his time, had less energy for searching other alternatives
and finding the most fitting opportunity; in other words, he was jumping to the conclusion,
which called as anchoring bias. One potential way to overcome this bias would be talking
with his supervisors.
- In Jack Gack’s case, we observe the characteristics of escalation of commitment bias which
means being consistent about the intuitions regarding the decisions even they’ve caused a
wrong decision and continuing to rely on intuitions for the next decision-making process.
Jack’s case is actually different than the John’s case because in John’s case the organization
was okay with his performance, but in Jack’s case, this biased attitude of him effects the
company as well and because of that they’re not happy with his performance. So, in solution
process of Jack, the company also may have an effective role. They can provide a supervisor
for him to control and make suggestions for the decisions. Jack basically should spend more
time and make a deeper search while making decisions, so he may ask for help or time if he
cannot make it in the today’s conditions. Company would offer him a training that may
involve working with a more experienced and successful manager and observing his or her
strategies.

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3- Is rational decision making them intuitive decision making ? if so when?

- The benefits of a decision-making style depend on the situation. Rational decision-making

style is superior to intuitive style in conditions which allow the decision-maker to gather
information about all possible alternatives. On the other hand, intuitive decision-making style
is much more beneficial when there are time constraints and the decision-maker has a prior
experience with similar problems. Importance of the final decision should also be considered
while deciding which decision-making strategy to use. Indeed, when the final decision is of
critical importance for the organization, one should use rational style and think deeply about
all the possible alternatives. If a decision is not very important to an organization, an
experienced manager can rely on his/her intuition to make decisions.

4- Should top management change gacks decision style?

5- The top management should carefully evaluate the situation and conclude whether
Jack’s failure is caused by external factors, as implied by him, or not. As we noted earlier,
rational decision-making style, used by Pieterson, is not necessarily superior to Jack’s
intuitive style. The top management should keep in mind that these two employees work
in two different countries; hence in different job environments. Pieterson’s rational style
might not necessarily lead to positive outcomes in Finnish context. Therefore, the
decision on whether to change Jack’s decision-making style should not be influenced by
Pieterson’s success. We suggest for the company to check whether external conditions
of Finnish context negatively affect Jack’s success. If external factors were to be blamed,
then the management should strive to eliminate those factors instead of changing Jack’s
decision style. If Jack is responsible for his own failure, then there are two possible ways
to solve the problem. First, instead of changing his intuitive decision-making style, the
management might try to increase Jack’s expertise and knowledge through extensive
training programs. This solution might be both lengthy and costly, but at the end of the
training, Jack is expected to make more successful decisions based on his intuition.
Secondly, the management might try to change Jack’s decision-making style altogether.
In this case, Jack should be reminded about the vast possible alternatives which he needs
to think before making an important decision. The management should convince Jack
that a change in his decision-making style will prove to be beneficial for both Jack’s
success and organization. Giving up habits and regular practices is hard, so Jack should
be given time to adopt his new decision-making style.

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