What Is Decision Making? Essay

2623 words - 10 pages

Decision-making may be defined as the act of choosing among two or more alternatives, the outcome of which is not perfectly known, for the purpose of solving a problem. The success or failure of most business concerns has to do with the quality of decisions made or not made.Decision makers are often faced with various opportunities or problems that require that a decision must be made. Decision-making is often a great test of the managerial capabilities of managers and how effective they have been in their managerial positions.Decision-making today places a premium on speed to a degree unprecedented in world history. The need to act in e-time is testing the limits of the command-and-control model that has dominated commercial and military leadership for generations. To maintain a bias for action and stay centered on the appropriate goals both realms are coalescing around and emerging leadership model that rebalances traditional attitudes toward two crucial decision factors: risk and control. In the corporate world today, decision makers need to have a higher tolerance for, and comfort level with risk. Multi month task forces are the buggy whips of leadership. Today, failure to decide and act quickly can pre-empt options altogether.However, business decisions are frequently made on input information that are either biased or manipulated. Input bias is defined as the systematic misuse of input information in judgments of outcome quality. While researchers note that the quality of a decision is often "positively related" to the quantity of the inputs used to make that decision, the relationship between input quantity and output quality is not automatic. In many cases, inputs are misused, misrepresented or even negatively related to outcome quality.Other common flaws noticeable in decision making include:a) Poor Framing: This involves allowing a decision to be "framed" by the language or context in which it is presented. Often times, in making a decision, the whole system or situation surrounding the problem or opportunity needs to be carefully analyzed. For example an opportunity that arose from a visit to one's village should not necessarily translate to the decision being centered only in that village. It may even be that the decision to provide a service in that village is transferred somewhere else since the success guarantee in higher in another location.b) Recent Effects: Making decisions based on recently seen information. It may also be known as availability bias. A careful analysis of that information may have eventually proven not very useful for the type of decision to be made.c) Primacy Effects: once people develop an opinion about something of a frame of reference for analyzing an issue, it is often difficult for them to move out from that position. The effect is that wrong judgements may trail certain decision-making situations they come up.d) Overconfidence: Both experts and the general public tend to be overconfident about the...

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