Styles of Decision Making

Decision Making

While choosing the right alternative for a particular decision, opinions vary among different managers. Some choose to rely to analysis and data while coming to a decision, while others rely on their judgment and intuition. Different styles of management come from different psychological makeup of the manager, which also affect how he manages his staff and how he tackles problems. Some believe in the carrot and stick approach, while others create a more participatory environment. The personality of a manger can be deduced by the he manages those who are under him.

Commonly prevalent styles

Intuition or analyses are the two roads a decision maker opts to take while solving problems. Think about this for a while. If this was your first day as a new manager, how would you tackle your first problem? The answer lies in your personality. Research has shown that there are two types of thinking styles commonly prevalent among managers. These are:

• Linear thinking style: if you like to see all the data and research and pore over the facts regarding a problem in order to solve it, you have a linear thinking style. This is commonly chosen style by rational thinkers and logicians to come to a decision.
• Non-linear thinking style: if you prefer to go by your gut, depending on feelings and hunches to solve a problem, it is said to be a non-linear thinking style. Many managers choose to trust their feelings when making a decision.

The difference in styles though, cannot be used to determine their superiority. Both styles are recognized as valid and widely accepted in the managerial demographic.

Errors in management

Since time is of the essence in an organization, often there is no time for assessing all the information available before making the deadline. So, managers prefer their own heuristics to ease the job a bit. Using heuristics can provide a sense to complex, often ambiguous data available.

Although it is widely used, heuristics lead to biases and errors in judgment, causing a misinterpretation of the available information.

• If a manager holds himself in high regard and is supercilious, he shows the overconfidence bias.
• Some managers want instant rewards at almost no cost, exhibiting the immediate gratification bias.
• If someone chooses to ignore specific information and only makes decisions based on what they want to see, it is termed as selective perception bias.
• Sometimes managers tend to fixate on the primary conditions of a problem, and consequently fail to adjust to later development; thus, showing an anchoring effect.
• Those who just want rely on past information, discounting present contradictions, exhibit confirmation bias.
• Sometimes, wanting to remember good results clouds a manager’s objectivity, leading him to make estimates and judgments that aren’t in sync with the problem. They are a user of the availability bias.
• When certain aspects of a situation are highlighted while others may be omitted and de-prioritized, managers tend to use the framing bias.
• Sometimes, one sees similarities in two situations even when they do not exist, drawing analogies and assessing the problem based on this distorted vision. This is termed as representation bias.
• Most managers refuse the possibility of unpredictable and random events. Randomness bias is shown by managers who string together random events and try to derive some meaning out of it.
• There are some who try and hog credit for every successful decision, whereas they are known for playing the blame game too often when outcomes are unfavorable. This is an example of self-serving bias.
• Some decision makers cannot move past their previous incorrect judgments and tend to fixate on the past sunk costs instead of focusing on new ones. This causes an error in judgment termed as sunk cost error.
• Finally, there are managers who claim that an outcome was easily predictable, after they know of the actual outcome. These people exhibit the hindsight bias.

Heuristics can help streamline the decision-making process, if most problems are of a repetitive nature and the correct alternative can already have been established. But if not evaluated properly, heuristics distorts judgments, leading to disastrous outcomes. Most managers choose to ignore the cons of heuristics for the sake of better flow in the workspace. Self-assessment and feedback from peer group can help curb the bias-related errors in judgment.

To sum up: decision making for a manager

Choosing the best alternative and implementing it are the most preferred options for any decision maker. The feasibility and effectiveness of the decision made is crucial in determining its success, and is generally affected by five factors:

• Approach of the manager
• The nature of the problem
• Thinking style of manager
• Existent conditions affecting decision making
• Errors and bias in judgment

Every decision is shaped by one or all of the above factors. Whether the decision is to enter a new market, or quality control, it always comes out the number of factors affecting the outcome. The manager has to take all of these factors into account and assess it carefully in order to maximize output effectiveness.

Links of Previous Main Topic:-

• management and organizations a managers dilemma
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• How to make and implement decisions effectively
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• Strategic management
• Basic organizational design
• Adaptive organizational design
• Managing human resources
• Managing teams
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