BRITISH COLUMBIA INSTITUTE OF TECHNOLOGY

SCHOOL OF BUSINESS

BUSA 7250

MANAGEMENT SKILLS AND APPLICATIONS

MODULE 2

Decision Making and Problem Solving

BUSA 7250 MODULE 2.DOC 03/21

REVISED BY: Leila Rahemtulla

DATE: June, 2007

REVISED BY : Christopher J Gadsby

DATE : May 2015

BUSA 7250 MODULE 2.DOC 03/21

 © 2021 by

British Columbia Institute of Technology

Burnaby, British Columbia

All rights reserved. No part of this module may be reproduced

in any form, without permission in writing from BCIT.

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 Decision Making and Problem Solving

Table of Contents
Learning Outcome ....................................................... 2-1

Learning Tasks ............................................................ 2-1

Decision Making and Problem Solving ......................... 2-2

Introduction ............................................................ 2-2
Definitions .............................................................. 2-2
Problem Types ...................................................... 2-3

The Rational Decision-Making Process ....................... 2-4

Emerging Issues in Decision Making ........................... 2-6

Types of Decisions ....................................................... 2-8

Personality Types .............................................................

Three Models of Decision Making .............................. 2-10

Decision Tree Theory ................................................. 2-11

Individual Versus Group Decision Making.................. 2-13

When to Make Individual Decisions ..................... 2-14
When to Make Group Decisions .......................... 2-14
Advantages and Disadvantages of Group
Decision Making .................................................. 2-15

Groupthink ................................................................. 2-15

Signs of Groupthink ............................................. 2-15
Overcoming Groupthink ....................................... 2-16

Brainstorming ............................................................. 2-16

Problems with Problem Solving ................................. 2-17

Impact of Decision Making on Others ........................ 2-19

Conclusions ............................................................... 2-20

References................................................................. 2-21

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 MODULE 2
Decision Making and
Problem Solving

T his module introduces a variety of decision-making models

and approaches and enables the selection of the appropriate
model and approach in making managerial decisions. The
module also explores related problems and risks and provides
suggestions for overcoming such problems.

Learning
Outcome Use a variety of decision-making models to maximize organizational
performance.

Learning
Tasks • Apply a disciplined approach to decision making.

• Use creative decision making.

• Describe three models of decision making.

• Determine the impact of personality in decision making

• Use individual or group decision making, as appropriate.

• Recognize and overcome Groupthink.

`
• Understand the value of Brainstorming.

• Solve problem-solving problems.

• Appreciate the impact of decisions on others in the organization.

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Decision Making
and Problem
Solving Introduction
The effectiveness of managers is definitely measured in terms of the
effectiveness of their decisions. When it comes to important
decisions, making one great decision can let the manager be a hero
while making a wrong one he or she can be seen as a failure. This is
can more easily be observed in military or emergency situations.

Example: Then New York mayor Juliani’s response to the 9/11

tragedy was viewed as decisive and immediate, and
resulted in increased perception of him as a great leader.

Decision making is an integral part of management and it permeates

all four management functions. Managers make decisions when they
plan (they decide on goals and objectives), when they organize (they
decide on how a job should be designed), when they lead (they
decide how a motivational problem should be solved) and when they
control (they select a particular management information system).

Decision making is also an important part of non-management

positions in today’s workplace. More and more decision-making
authority is delegated to staff members — with mixed results. Some
employees enjoy the added challenge, while others dread the added
responsibility. Group or team decision making is also employed
more extensively today, as opposed to a single person making the
decision.

Problem solving and decision making are examined jointly in this

module as they are closely related, although differently defined.

Definitions
Decision making can be defined as the process of selecting one of
several possible alternatives.

Example: You decide to hire candidate A from a roster of three

candidates because you feel that she/he is the best
candidate for a particular position.

Problem solving entails changing a currently unsatisfactory situation

into a satisfactory one, and it may involve making more than one
decision.

Example: You have a problem of high turnover. A series of

decisions may have to be made, such as first identifying
the cause(s) of high turnover, then dealing with it, and,
after that, deciding what other areas may be affected by

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this decision and what preventive measures may be

established for the future.

Problem solving and decision making are two-dimensional

processes: they consist of gathering information and then
manipulating it.

Problem Types
Logical or Structured
This type of problem is clearly identified and has a logical structure.
As a result, you eventually get to the solution by following a set
route, as is used for solving a mathematical problem. The previous
example of candidate selection presents a logical, or structured,
problem. You know (at least you should know) what type of a
person you are looking for and what the selection criteria are. One of
the candidates meets all the requirements. Therefore, the selection is
easily made.

Elusive or Unstructured
This problem is often difficult to define in the first place, and, once
defined, the solution is not apparent. Following a logical approach
does not necessarily lead to a solution.

Example: You head a political party that did extremely poorly in

the last election and you have no idea why that happened
or how to turn the party around, since public surveys
conducted on the matter have produced inconclusive
results.

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The Rational
Decision-Making
Process There are eight steps involved in the decision making process:

1. Identify the Problem

First, it is important to uncover the problem behind its
symptoms. Problems seldom reveal themselves clearly. What
usually attracts attention is a symptom or symptoms. Without a
proper investigation, just the symptoms can be dealt with and
the problem itself may remain unsolved.

Example: Taking painkillers for a migraine headache may just

treat the symptom. It may not solve the problem if
the headache is due to a serious physiological cause.

Once the problem is uncovered, you can identify and classify it

by asking the following questions: Is it a crisis demanding
immediate attention? Is the response reactive, that is, has the
problem already occurred? Or is it anticipatory, that is, it may
occur in the future if action is not taken now? How urgent or
important is the problem? Are there opportunities arising from
it, such as when a garbage problem becomes a recycling
opportunity?

Next you set clear objectives for solving the problem. What
desirable situation is sought? Do you, for example, want high
staff morale or do you want to balance your budget?

2. Identify Decision Criteria

Criteria are the factors that are relevant to a decision—what is
important in choosing a solution.

Examples: For the selection process you may set competency as

the sole criterion; seniority is not a factor.
In selecting computer software programs, you set
low cost and speed of delivery as the criteria.

3. Allocate Weights to the Criteria

You may set only one criterion or several. If there are several
criteria, a hierarchy must be established according to their
relative importance. In some cases, one criterion could be set as
the deciding factor when all other criteria are equally met.

Example: According to a union contract selection clause,

seniority may be the deciding factor when two or

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more candidates equally meet competency and

efficiency requirements
.
4. Develop Alternatives
The alternatives are the available means of making a decision
and solving the problem. In the employee selection example, the
alternatives are the candidates; in the second example, the
alternatives are the various software programs. You may
research existing options, identify how others have addressed
the problem or brainstorm new alternatives.

5. Evaluate Alternatives
Compare the alternatives (such as the candidates in the
example) on the basis of the preset selection criteria. Does one
candidate meet all criteria unequivocally? Is there a tie? If so, is
there a deciding criterion? Do some candidates meet some
criteria, but not others? Remember the weights allocated to the
criteria.

Example: Candidate A receives a 9 out of 10 on competency,

candidate B receives an 8 and candidate C a 9.
Since there is a tie, what is the deciding criterion?

A useful checklist for evaluating alternatives may include the

following:

• Risk
• Timing
• Economy
• Resources
• Implementation
• Contribution to objectives

You may find, for example, that a certain attractive alternative

is simply too risky, or that another one is beyond the capability
of your resources.

6. Select an Alternative
This step should be fairly easy, provided that the process has
been smooth up to now. It should simply be a matter of
selecting the alternative that obtained the highest score during
the previous step and meets the evaluation checklist. If, in the
earlier selection example, it was decided that the tie would be
resolved by making continuing education courses a “tie-
breaking” second criterion, candidate A, who happened to be
enrolled in the BCIT degree program would receive the
promotion.

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7. Implement the Alternative

A decision is worthless until it is implemented, and
implementation may involve other people and their cooperation
and commitment. It also entails effective communication,
coordination and monitoring.

8. Monitor and Evaluate the Decision’s

Overall Effectiveness
At this stage, questions include:

• Has the problem been solved?

• Has the undesirable situation become a desirable one?
• What has been done well?
• What could have been done better?
• What can be done to correct any problem arising out of the
decision?
• How will a similar situation be handled, in the future?

If you discover that the process has not solved the problem, or it
has created other problems, you may have to trace your steps,
analyze and even begin the process once more!

Emerging Issues
in Decision
Making In recent years the decision making model has undergone some
important revisions in areas such as health care and risk
management.

For example, Health Canada and managers in the area of health care
have recently revised the decision making framework in the face of
critical scrutiny of decision making and the management of Canada’s
blood supply.

As a result of the consultations, a few of the key changes in the

revised approach are that it:

• Broadens the base of information used for decision-making

including taking into account determinants such as culture,
gender and other factors which may impact the decision.

• Provides transparency and clarity in terms of the process

followed, information used, and decisions made including
uncertainties, assumptions made and their impacts.

• Provides sufficient flexibility to address a range of risk issues

and situations.

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• Clarifies the roles, responsibilities, and accountabilities of

participants.

• Provides greater opportunities for the involvement of interested

and affected parties and provide them with the information they
need in order to participate in the decision making in an
informed way.

Health Canada's Decision Making Framework is a process for identifying and managing risks
to health. These risks may arise from diseases, hazardous substances, food, medical devices,
drugs, tobacco and consumer products.
The Framework consists of a series of inter-connected and inter-related steps.These six steps
may be grouped into three phases:
• Issue identification (identify the issue and put it into context);

• Risk assessment (assess risks and benefits); and

• Risk management (identify and analyze options, select a strategy, implement the strategy and
monitor and evaluate the results).

Decision Making Framework

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Generally speaking, the process begins at the top of the diagram, and proceeds clockwise
through the other steps. The process is flexible in that one may move back and forth between
steps or revisit steps based on available information. For example, a previous step may be
revisited when new information becomes available and needs to be considered.

Source: Health Canada Decision-Making Framework for Identifying, Assessing, and Managing Health Risks. (2014
August ).

Figure 2.1
Revised Decision Making Framework

These changes have implications for other disciplines in that the

recommendations recognize the central importance of involving
stakeholders in all steps of the decision making process. Specifically,
organizations are learning how to support the involvement of all
people impacted by the decision, including the impact of gender,
culture and other factors on the decision making process and the
enriched outcomes for organizations in supporting inclusion.

Types of
Decisions Business decisions fall into two categories: programmed and non-
programmed.

Programmed decisions are reserved for routine, reoccurring and

logical problems.

Example: When a customer returns defective merchandise to a

store, the store owner honors the “money-back”
warranty.

The tools used in making programmed decisions are the following:

• Policies include a store’s “money-back” policy in the above

case, or an organizational policy to promote from within.
Policies are expressions of intent or overall guidelines and they
may be written or unwritten.

• Procedures are outlined series of steps used to arrive at a

desirable outcome, such as an emergency building-evacuation
procedure, or the procedure involved in sending a fax.

• Rules are concise statements of what should or should not be

done, such as “No smoking in all interior areas” or “All
expenses over $1,000 must be approved by the comptroller.”

As you can see from the above, programmed decision tools assist the
manager in making routine or reoccurring decisions by speeding up,

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simplifying and even altogether replacing the decision-making

process.

Example: In granting compassionate leave to an employee whose

parent has passed away, you simply consult the relevant
policy that states the conditions when such leave is to be
granted and how long the leave will be. The decision has
been made for you.

Non-programmed decisions are made when the problem is unusual,

unique or elusive, such as when the manager searches for the best
way to advertise a product, or for ways to increase customer
satisfaction.

Example: You are faced with an employee’s request for one week’s
compassionate leave to arrange and attend the funeral of
an aunt. At first glance, this request cannot be granted
because the organizational policy specifically states that
such leave is reserved for “immediate family members
only” and an aunt is not considered immediate family.
On careful investigation, however, you discover that the
aunt raised this employee since his mother died when he
was four, although she did not legally adopt him, and
that she lived alone and had no other living relatives.
Your policy obviously does not cover such complex
circumstances and at this point you will have to make a
non-programmed decision.

In the organization context, most decisions made by supervisors and

managers at the lower organizational levels are programmed, while,
as one ascends the organizational ranks, the number of non-
programmed decisions increases accordingly.

Personality
Types
Problem solving, as noted, is a two-dimensional process of gathering
information and manipulating that information. A person’s
personality may impact how he or she approaches a problem.
Personality types may provide further insights on how individuals
approach decision making differently.

The Meyers Briggs Type Indicator (MBTI) is one form of

personality assessment that may shed some light on these
differences. The basic premise of the assessment is that individuals
differ on four main dimensions. In each dimension, there are two
types and typically most people have a preference for one type over
the other. There is no right or wrong way to be, rather different types
that help explain differences in personality.

The four dimensions and associated types are as follows:

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1. How does the person energize? It can either be

Extroversion (E) for those that draw their energy from
others or Introversion (I) for those that primarily draw their
energy from within.

2. How does the person take in info? Does the person prefer
clear, tangible data as a Sensor (S) or does the person prefer
more abstract, conceptual, “gut feel” info Intuitor (N)?

3. How does the person make decisions? There are some

people who prefer objective, logical and analytical processes
as Thinkers (T). Compare these to individuals who prefer to
make their decisions with their “hearts”, keeping harmony
and paying attention to impact and values Feelers (F).

4. How does the person prefer to organize their life? Is

he/she interested in having things well planned and laid out
as a Judger (J) or can he/she “go with the flow” and be
more flexible and adaptable as a Perceiver (P)?

Although many individuals would probably identify with both sides

of each dimension, research suggests that most individuals do have a
preference. These preferences can show up in a total of 16 different
combinations e.g. ENTJ or ISFP.

Although all the dimensions quite likely impact an individual’s

decision making skills, the 2nd and 3rd dimension are particularly
important. Because there is no right or wrong preference, decision
makers can reflect on their personality to type to see if their own
preferences have biased the process, and who (someone with the
opposite preference in a given dimension) might be able to shed
some light on a different perspective or approach. E.g. A Thinker
may want to find out how a Feeler considers an ethical dilemma. An
Intuitor may want to find out what information a Sensor has
considered. This allows decision makers to make more balanced and
qualitative decisions.

For more information about the Meyer Briggs Personality Indicator

see http://www.personalitypathways.com/type_inventory.html.

Three Models
of Decision
Making In making a decision, people tend to believe that they are using the
rational decision-making process and are aiming at the optimum
decision. Most would deny that often they knowingly, or
unwittingly, deviate from the set process and take shortcuts that do
not lead to the best decision.

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There are three models of decision making:

1. Optimizing: This model represents an idealistic presentation of

rational and logical decision making at its best.

Example: You are convinced that you have correctly followed

all the steps in the rational decision-making process
of selecting new electronic equipment for your
workplace, including examining and evaluating all
alternatives.

2. Satisficing: This model is used when the first or most obvious

alternative is selected instead of the best solution.

Example: In selecting the electronic equipment, you choose

after making the first phone call, instead of going to
the trouble of making several calls.

3. Implicit favorite: You preselect a favorite alternative; then you

set out to confirm your choice. Continuing with the example
above, you intend to purchase from your personal friend’s
supplier, so you set out to prove that that particular equipment is
the best choice. It is important to note that such preselection
may be conscious or unconscious.

You may have observed the three decision-making models at work in

your workplace. You may feel that there is a place for the satisficing
and even the implicit-favorite models. After all they tend to be less
time-consuming that the optimizing model, and some decisions do
not warrant the extra time spent on them. It is probably correct that
there may not be serious repercussions if the decision is totally
unimportant, but there may be high risks in using the other models
when one is faced with important decisions.
Examples: A pharmaceutical company launches a new drug without
correctly evaluating the risks of side effects.

An airplane engine manufacturer ignores a technical

defect.

Decision Tree
Theory The Decision Tree theory attaches a quantitative value to each
potential alternative, in order to overcome the degree of uncertainty
involved in non-programmed decision making. A simplified
demonstration of the Decision Tree theory is given in the following
scenario:

Imagine that you are an importer with an office in

Vancouver. You make a living by importing various gift
items from all over the world and selling them to local
retailers. One morning you receive an urgent email from an

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exporter in Asia, who is offering 10,000 jade ornaments for

the bargain price of $2 per ornament. You are certain that
you can immediately sell the ornaments to the local
retailers for at least $5 per ornament, and thus make a nice
profit of $30,000. You know that the same email may have
been received by hundreds of other importers around the
world, so you are eager to make a decision and snap up this
bargain. So far the decision appears simple: all you have to
do is accept the offer as fast as you can. Unfortunately,
there are complications. You have heard that, because of
dumping accusations, the Canadian parliament is about to
pass legislation banning jade ornaments from importation
into Canada. A member of parliament announces that, if
the law is passed, it will be retroactive to the last thirty
days; therefore, any order made within the last thirty days
will have to be cancelled. You note with apprehension that
the offer includes a penalty clause of $1 per ornament if the
offer is cancelled, for any reason, after it has been placed.
This means that, if the law is passed and you cancel the
order, you may have a loss of $10,000. You call your
member of parliament in Ottawa and enquire as to what the
chances are of this legislation passing. The answer is “50-
50”! Assuming that no other avenues are available to you
for bypassing the Ottawa obstacle, what would you do in
this situation? The graph below depicts how to use the
Decision Tree theory to assist decision making.

IMPORT .5 X $30,000 = + $15,000

OK

BUY

NO .5 X ($10,000) = - $5,000
PERMIT LOSS

DON’T positive outcome

BUY $0 + $10,000 worth the risk

Figure 2.2
Decision Tree

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As you can see, by attaching quantitative values to various outcomes

and to the possibilities that such outcomes may occur, you get an
indication of whether or not a particular alternative is desirable. You
multiply the chance factor (.5) with the potential profit or loss. In the
above scenario, it appears that a risk is worth taking since the chance
factor is 50% and the potential profit, $30,000. But bear in mind that,
if you change the chance factor or the profit figure, you may arrive at
a recommendation to avoid importing the jade ornaments.

Does the Decision Tree theory or any other quantitative approach

guarantee effective decisions? Certainly not! All it does is improve
your “batting average” in making good decisions.

Are there problems with the above approach? Yes. One is that the
recommendations will be as sound as the input into the process. If
you fail to consider all alternatives, or if you input incorrect
information, the recommendations will be worthless.

Example: When the late former Prime Minister Pierre Trudeau was
questioned about the uncontrolled borrowing and
spending of the early 1970s and 80s that resulted in the
subsequent huge national debt he replied: “We did not
know then about the upcoming globalization and about
Canada losing thousands of jobs to developing countries.
We thought then that the Canadian economy would
continue to grow at the same rate, therefore we would be
able to repay the debt.” Paraphrased from a 1996 CBC
television interview with Mr. Trudeau.

Individual
Versus Group
Decision
Making In some work environments supervisors and managers make all but
minor day-to-day decisions. This is autocratic management. In other
workplaces, employees are empowered to make a range of decisions
and are encouraged to participate in group decision making. This is
democratic or participative management. In the past, the Japanese
model of group decision making by consensus has also been hailed
as the most effective approach. Although empowerment and group
decision making are strongly recommended, there are always
exceptions to the rule and pitfalls in adhering to it. There are
organizations headed by strong individual decision makers. And
there are occasions when group decision making does not come up
with the right answer and so the group hampered, rather than
enhanced, decision effectiveness.

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Individual and group decision making fall along a continuum, as

shown below. At one extreme, the decision maker unilaterally makes
a decision by personally collecting and analyzing the information
needed. At the opposite end of the continuum the team works
together from beginning to the end and achieves consensus in
solving a problem. There are several degrees of group participation
in between.

Example: The group may participate in the information gathering,

but not in the final selection of an alternative.

INDIVIDUAL GROUP

If you are uncertain as to which approach to decision making you

should use, you may find the following guidelines helpful. There are
advantages and disadvantages to both types of decision making and
the key is in selecting the one that is most appropriate in a given
situation, rather than in passively following trends.

When to Make Individual Decisions

• When there are time constraints

• When the problem is logical (structured) and you can use the
systematic approach

• When you possess the ability, expertise and resources to make

your own decision

• When you have the authority to make this decision

• When it is strictly your responsibility (e.g., disciplining)

• When the situation is confidential

• When the problem is unimportant and does not warrant taking

up the time of others

• When the decision does not affect others in a major way

When to Make Group Decisions

• When there is ample time

• When the problem is elusive (unstructured) and the decision,

non-programmed

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• When you lack the ability, expertise and resources to make your
own decision

• When the ability, expertise and resources of others exceed yours

• When you lack the authority to make this decision

• When the problem is important; hence it is cost-effective to

engage others

• When the decision affects others in a major way

Advantages and Disadvantages of

Group Decision Making
Advantages
• Collective brain power
• Increased acceptance of solution
• Increased legitimacy

Disadvantages
• Time-consuming
• Perception of abdication of responsibility or incompetence
• Minority domination
• Shared (reduced) responsibility
• Groupthink (see following)

Groupthink Groupthink is the tendency of a highly cohesive group to lose their

critical evaluative abilities and, as a result, to suppress disagreement
and arrive at the wrong decisions.

The proliferation of employing group decision making in the

workplace makes the importance of detecting and overcoming
groupthink more important than ever. This needs to be done to
preserve effective decision making.

Signs of Groupthink
Mind-guarding: One or more members block the presentation of
points of view that may create disharmony.

Illusion of invulnerability: Group members are led to believe that

nothing can go wrong.

Illusion of unanimity: Group members are led to believe that

unanimity exists, when some members disagree in silence.

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Active suppression of dissidents: Anyone daring to criticize or

disagree is swiftly brought into line.

Invoking a common enemy and stereotyping: Any outsider who

competes with or disagrees with the group objectives.

Group leader bias is clearly communicated. If a leader openly

expresses his/her opinions, it may influence the group’s thinking and
opinions as well.

Belief in inherent group morality: The group cause is presented as

right and just.

Self-censorship by members: Members hesitate to present a point

of view that is contrary to that of the majority or the leader.

Overcoming Groupthink
• Assign the role of critical evaluator to each member by using
anonymously submitted written critiques.

• As a leader avoid influencing the group by communicating your

biases.

• Create subgroups that, under different leaders, work on the same

problem.

• Have group members discuss issues with their staff and report
back on their reactions.

• Invite outside experts to observe group activities and react to

group processes and decisions.

• Assign one member to play devil’s advocate at each meeting.

• On key issues, hold second-chance meetings after consensus has

apparently been achieved.

Brainstorming Brainstorming is a group decision-making technique that allows a

free exchange of ideas within a structured format. The typical
brainstorming process is as follows:

1. Invite to the meeting all persons who can make a helpful

contribution.

2. Create and maintain a positive environment.

3. Set clear objectives.

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4. If the problem and the criteria are not yet clearly defined,
encourage participation in defining.

5. Collect all ideas; do not evaluate them at this point—focus on

volume of ideas. The facilitator may need to guard against
evaluation at this stage.

6. Evaluate contributions and arrive at definition.

At this point, you may have to evaluate whether your participants

have sufficient energy to continue with the problem-solving part of
the session or whether you must reschedule that session.

7. Collect all alternative solutions from participants; do not

evaluate at this point.

8. Evaluate solutions.

9. Select the best solution (or combination of solutions).

10. Thank your participants.

11. Implement solutions and evaluate results.

12. Give feedback to the participants.

Brainstorming is most suitable for solving unstructured or elusive

problems when creative solutions may be appropriate.

Examples: Deciding how to promote a new product.

Designing new computer software.
Deciding how to deal with the competition.
Brainstorming can even be used in such unlikely areas as collective
bargaining, when novel ways of dealing with long-standing problems
may be sought.

Problems
with Problem
Solving
There are a number of issues that can come up during the decision
making process. It is important to guard against these issues as they
may impact the integrity of the process or the quality of the decision.

The Problem Chain

Identification of one problem leads to a series of interconnected
problems.

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You cannot solve your initial problem until you get to the end of the
chain.

The Problem Package

Several unrelated problems are conveniently grouped under a single
label.

Deal with each problem separately.

Constraints or a Closed Mind

When we make assumptions prior to problem solving as to what will
or will not work.

Free your mind of constraints in problem solving. Every time you

find yourself saying that something will not work, ask yourself,
“How do I know, if I don’t try it first?”

Dealing with the Symptoms, Not the Problem

The surface evidence masks the underlying problem.

Examine the symptoms and diagnose and uncover your problem.

Vested Interests
It is in someone’s interest to keep the problem unsolved because the
solution may mean a loss to him or her.

Uncover the vested interests and deal with them first.

The Decision Maker Lacks All Information to

Solve Problem
This may happen when the decision maker is unable or unwilling to
access such information.

Group decision making may be the answer.

Different Perceptions
• Is there a problem at all?
• What is the problem?
• How important is the problem?
• What are the available alternatives?
• Evaluation of alternatives

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Recognizing perceptual differences may help.

Impact of
Decision
Making on
Others From the examination of problem solving and decision making so
far, you must have concluded that decisions vary in importance from
minor to major. We all accept that major organizational decisions
have some impact on others within and without the organization.

Examples: A decision to close hospital beds results in layoffs and

reduced patient services.

A decision to deregulate the airline industry results in

reduced airfares and more choices for the traveling
public.

When it comes to minor day-to-day decisions, many dismiss the

possibility that they may have any impact on others. Minor
decisions, however, can have an impact as shown in the following:

1. Several minor decisions form a pattern that characterizes the

decision maker.

Example: Because of a series of careless decisions, the staff

sees the decision maker as uncaring.

2. Staff and others may copy the decision-making style of a

decision maker who is in a position of leadership.

Example: If the decision maker tends to be autocratic and

unwilling to cooperate with a team, the staff and
others may copy that style.

3. Minor decisions made in a department that has to work closely

with other departments are bound to affect the other
departments.

Example: Your decision to operate under flexible work hours

in your department, when all other departments,
because of workloads, schedule their
interdepartmental meetings in the early morning, is
bound to affect interdepartmental functions.

4. Not making a decision may label you as indecisive or a

“postponer”, or imply the problem itself as unimportant.

Example: You have been putting off a decision on schedule

changes for two months. Your staff may interpret

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this inaction as meaning that the scheduling is not

important.

5. There may be perceptual differences over the impact of a

particular decision.

Example: As a result of a move, you assign office space in the

new location on the basis of seniority, not of
performance, because you find it easier to deal with
the problem that way. High-performing staff may see
this decision as a deliberate slight.

6. There may be perceptual differences over the impact of a

decision; what you consider a minor decision may have major
impact on others.

Example: A minor change in procedures may totally unsettle a

staff member because of that person’s particularly
vulnerable state at the time (more on this topic in the
module on change).

Often people are unaware of the impact of their decisions on others.

For that reason, it is important to regularly seek and receive feedback
from the people affected by decisions and to make adjustments to the
decision-making approach.

Conclusion Decision making defines a manager; his or her competence is

measured to a large extent by the quality of the decisions made. In
today’s work world, a great deal of decision making is delegated to
the workers, and, in seeking answers, the team approach is used
more extensively than ever. Regardless of trends, it is important to
recognize that different decisions and circumstances call for different
styles of decision making. It is also important to realize that different
individuals may be more suited than others to making different types
of decisions.

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References McKenney, J.L., & Keen, P.W. (1974). How manager’s minds work.
Harvard Business Review, 52(3).

Robbins, S.P., Coulter, M., & Stuart-Kotze, R. (2000). Management

(Canadian 6th ed.). Scarborough, ON: Prentice Hall.

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