TOSHIBA MANAGEMENT DECISION

MAKING PROCESS TO FACE

THE DIGITALIZATION ERA

Tony Setiawan (2019204807)

Kalbis Institute

Jl. Pulomas Selatan kav.22, Jakarta Timur 13210

Email: tony_setiawan@ymail.com
 Abstract

Toshiba is one of the electronics brands that has a golden period in Indonesia in the
90s. The brand was vacuum for several years. Now Toshiba is trying to return to Indonesian
market.

The conditions in Indonesia today are very different from the heyday of Toshiba in the
90s. The development of digital technology in Indonesia has been very rapid in recent years
and entered various aspects of life. This also greatly influences the customer's behavior in
daily life.

The management must be able to take the right decisions in determining the best
strategy in order to face the challenges of the current market.

A. Introduction
The development of technology into digital is currently growing rapidly in Indonesia.
The development of this technology has a very big impact on various aspects of life, this can
be seen from the changes in lifestyle and human behavior. The most visible change in the
current generation of humans is that they are very familiar with information technology. One
of its characteristics is the current generation has a dependence on gadgets or smart
communication equipment and internet connections.

While the Toshiba brand itself is a brand that was popular and its golden age in the
era of the 90s, where at that time the development of technology toward digital was not too
rapid in Indonesia, even the Indonesian generation at that time mostly did not really know
the name smart gadget or communication device and internet connection.

In the other hand for several reasons, the Toshiba brand was vacuum in the Indonesian
market. This is a challenge for new management to bring back the Toshiba brand back to
glory. The management must be able to take the right decision in formulating various
strategies to face the current digitalization era.
B. Theoretical Basis
In an organization, decision making is very important for the success of the
organization in achieving its goals. Decision making is one of the functions of company
management.

In general, decision making is done in order to solve a problem. According to

Suryabrata (1994) the problem is the gap between expectations (das sollen) and reality (das
sein), between needs and what is available, between what should be (what should be) and
what is (what it is).

Problem solving is a process of finding or found a way that bridges between the
situation being faced with the desired state (Suharnan, 2005). And according to Chaplin (2001)
in a complete dictionary of psychology states that problem solving is the process involved in
trying to find the correct sequence of alternative answers leading to one goal or toward an
ideal solution. According to (Solso, 1991) problem solving is also a thought activity directed
to find answers to problems that include the formation of responses and selection of various
possible responses.

As mentioned earlier, decision making is carried out to solve problems. Some

definitions of decision making according to experts are as follows:

• Decision making according to Simon (1993), is a form of selection of various alternative

actions that might be selected, the process of which is through certain mechanisms in the
hope that it will produce the best decision
• Decision making according to Terry (2003), decision making is the choice of behavioral
alternatives from two or more alternatives, actions to solve the problems faced through
the selection of one of the alternatives that allow.
• Decision making according to Suharnan (2005) is the process of choosing or determining
various possibilities among uncertain situations.
• Decision making according to Save (2006), is the selection of decisions or policies based on
certain criteria. This process includes two or more alternatives because if there is only one
alternative there will not be a decision to be taken.
• Decision making according to Wang and Ruhe (2007), is a process that selects a preferred
choice or an action from among alternatives based on the criteria or strategy given.
• Decision making according to Baron and Byrne (2008), is a process through a combination
of individuals or groups and integrating existing information with the aim of choosing one
of various possible actions.

According to Kast and Rosenzweig (1985) decision making is a necessity in every

organization so that the tasks of the coordinative strategy, and operations including at the
non-managerial level can be handled properly. The type of management activities can be seen
in the following management structure hierarchy:

1. Strategic Management
Is top management as a process of evaluating the
environment outside the organization, implementing
organizational goals, and determining strategies.
2. Management Control
System to ensure that the organization has
implemented strategies that have been established
effectively and efficiently.
3. Operational Control
System to ensure that each specific task has been
carried out effectively and efficiently.

The relationship between problem solving and decision making are two interrelated
things where problem solving requires decision making skills and decision making also has the
potential to cause other problems.

The relationship between problem solving and decision making according to Kast and
Rosenzweig (1985) can also be seen in the following process:

1. Activities identify and diagnose problems,

2. The activity of looking for various alternatives for solving the problems,
3. Activities assessing various alternative solutions to problems and choosing the best of the
various alternatives,
4. Implementation of alternative solutions to problems that have been selected,
5. Activities maintain, monitor and review the problem-solving program.
 Activity numbers 1-3 are included in decision making. And in problem solving activities
include numbers 4 and 5.

The basics of decision making as explained by George R. Terry (1960) are:

• Intuition
Decision making based on intuition or feeling has a subjective nature so it is easily affected.
• Experience
Decision making based on experience has benefits for practical knowledge, because a
person's experience can predict the state of something, can be calculated profit and loss
for the decision that will be generated. People who have a lot of experience will certainly
be more mature in making decisions, however, past events are not the same as events that
are happening now.
• Fact
Decision making is based on facts. Fact-based decision making can provide healthy, solid
and good decisions. With facts, the level of trust in decision making is higher, so people
can accept the decisions made well.
• Authority
Decision making based on authority is usually carried out by the leadership of subordinates
or people of higher position to people of lower rank.
• Logic
Logical decision making is a rational study of all elements on each side of the decision-
making process. In decision making based on rational, the resulting decisions are objective,
logical, more transparent, consistent to maximize results or values within certain
constraints, so that they can be said to be close to the truth or in accordance with what is
desired.

The type of decision making itself if based on the decision-making structure can be
divided into 3 categories:

1. Structured Decisions
is a decision that is repetitive and routine, so that it can be programmed. Structured
decisions occur and are carried out mainly at lower level management.
2. Half-structured decisions
 is a decision that can be partly programmed, partly repetitive and routine and partly
unstructured. This type of decision is often complex and requires detailed calculations
and analyzes.
3. Unstructured decisions.
is a decision that doesn't happen repeatedly and doesn't always happen. This decision
occurs at the top level of management. Information for unstructured decision making is
not easy to obtain and is not easily available and usually comes from the outside
environment.

Types of decision making if classified on the basis of decision making can be divided
into 2 categories:

1. Auto-generated Decisions
Decisions like these are taken quickly and pay less attention, considering data,
information, facts, and field data.
This auto-generated decision is not good, because the risk is high
2. Induced Decisions
Induced decisions are made based on scientific management, so that decisions are
logical, ideal, rational to implement and the risks are relatively small, only the decision-
making process is slower.

In making decisions for problem solving, we must be careful with some hidden traps
that can affect the decisions we make. The various types of traps as explained by Hammond,
Keeney, Raiffa (1998) in the Havard Business Review are:

1. The Anchoring Trap

When we consider a decision, our mind unconsciously gives an incorrect portion of the
information we received in the first place.
2. The Status Quo Trap
Instinctively someone usually wants to maintain something that is familiar. When we are
required to choose new alternatives besides something that already exists, most people
will choose something that already exists. Why? Because the more alternatives, the
greater the effort that must be made to choose and to run something new.
3. The Sunk Cost Trap
 It is our tendency to make choices in ways that justify past decisions, even when the latter
is no longer valid. This often happens when we don't want to, consciously or not, admit
mistakes.
4. The Confirming Evidence Trap
Leaders sometimes look for information that supports their current instincts or point of
view and avoid information that conflicts with it. This trap affects where we go to gather
evidence, and how we interpret it.
5. The Framing Trap
The first step in making a decision is to frame a question. This is also one of the most
dangerous steps, because how you frame the problem can greatly influence your choices.
Problems with a bad framework can ruin even the best decisions.
6. The estimating and forecasting trap of overconfidence, over-prudence and recallability
There are 3 traps when we make estimates and predictions:
• Overconfidence Trap
When we are too confident of the judgment or accuracy of our predictions.
• Prudence Trap
When we tend to make estimates and predictions too carefully, secure positions, or
doing "the worst-case scenario" analysis.
• The “Recallability” Trap
When we make estimates and predictions because we are not too confident and
wise, we only based our predictions about past events.

To overcome all the traps in decision making and to be able to produce the best
decisions and can solve problems with the most appropriate solution, management must
analyze all data and facts in full in advance and with the help of experience that is complete
there is already a decision making process expected to provide the best results for the
organization.

C. Research Method
The method used in this research is descriptive quantitative method.. Data collection
is carried out through surveys that have been carried out and statistics that have been
published by various sources about the phenomenon of technological developments and the
era of digitalization that is happening in the world and Indonesia today. Furthermore, the
authors conclude the findings of these data and summarize them into a suggestion for
decision making considerations.

D. Discussion
Before making a decision in developing a strategy to face the current era of
digitization, management should analyze the technological developments that occur in
Indonesian society first, especially the development of the internet.

The history of the development of internet in Indonesia for commercial began around
1994 where the emergence of the first commercial Internet Service Provider (ISP) in
Indonesia, namely www.indo.net.id. The internet was originally used for work using an email
system. But entering the era of the 2000s, Indonesian people began to understand and
recognize the presence of social media, to how to download videos, listen to music and so on
until now. According to a survey conducted by the Indonesian Internet Service Providers
Association (APJII):
The development of internet users in Indonesia from 1998 to 2019 has increased by more
than 300% from around 0.5 million users in 1998 to 171.17 million users in 2019. And if
calculated from the total Indonesian population the penetration has reached 68.4%.

According to data released by Hootsuite as of January 2019 are as follows:

Hootsuite data shows that the average internet usage of Indonesian people is around 8 hours
36 minutes per day, and around 79% of internet users in Indonesia access the internet every
day.

From the data above shows the internet user market in Indonesia is very large and growth is
very fast.

The following data is about e-commerce in Indonesia:

As many as 86% of internet users in Indonesia make online purchases and this percentage is
the highest among other countries. Activities carried out on e-commerce platforms are 93%
to find out about products or services to be purchased, and as many as 80% buy goods or
services online.

All of these data indicate that the development of the digitalization era in Indonesia is
developing rapidly and creating changes in customer behavior which is currently more
information about goods and services online.

To be able to face the current digital era, management must make good decisions and
the right strategies. The decision making process in the face of the digitalization era is a
function that must be carried out by top management, because it carries out a process of
evaluating the environment outside the organization which is the development of the times
that occur in Indonesian society and the world.

To achieve the organizational goals of making the Toshiba brand famous again in the
current generation of Indonesian society, the management can take the following steps:

1. Identify the problem. That is the current problem is the lack of brand awareness
in Indonesian society because it had a vacuum of several years.
2. Looking for alternatives to the problem. Namely to increase brand awareness is to
do marketing activities. Some marketing activities that can be carried out are
placing advertisements on television, placing advertisements in newspapers,
conducting exhibitions in malls and certain events, placing advertisements
through online media.
3. Choose alternative solutions to problems. Choosing to advertise through online
media. The consideration is because nowadays many people have accessed the
internet to find information about a product, in addition to conducting digital
marketing, the bias is directed according to the desired target market and the cost
is relatively cheaper than conventional advertising rates.
4. Implementation of alternative solutions to problems that have been selected.
5. Monitor and review the problem-solving program if it has been effective.

The basis of this decision-making must be based on available facts, namely the data
from survey results by trusted institutions regarding internet penetration in Indonesian
society. And must be based on logic that in the future the development of the internet will be
much more rapid and customer behavior will increasingly leave traditional transactions and
move to digital transactions.

Decisions taken from the structure are unstructured decisions because they are
influenced by external factors and are carried out by top-level management. If viewed from
the basis is an induced decision because it is taken based on scientific management, so that
the decision is logical, ideal, rational to be implemented.

The decision trap that may occur is the status quo trap because the company's
management is afraid to enter sales through e-commerce because there is no experience in
dealing with complaints from traditional chain stores that assume the company is leaving
them and trying to sell themselves to end customers.

E. Conclusion
Era will continue to change with time. Which is now entering the era of digitization.
An organization if it wants to survive must be able to adjust the changing times, for that the
management must always be open-minded and analyze the events around him. That way the
management will be able to take good decisions and formulate the right strategy.

Considering the current condition of the digitalization era, Toshiba management must
already have to start carrying out promotional and marketing activities digitally as well, they
can take advantage of digital marketing features such as SEO, GDN, social media, and e-
commerce to increase visibility and brand awareness to always remember and become the
top brand of mind in the generation of Indonesian people today and also in the future.

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