Decision Making – Journey of Opportunity

Think of all the decisions, both large and small, that you make during the course of a regular day. Just as you must continually make decisions in your personal life, every stakeholder in an organization is also required to make decisions.


The decision making process as a manager can prove a daunting task should one lacks the necessary steps to make a decision. As a manger situations have aroused that have caused this student to utilize different decision-making techniques. Procurement of services, technology, hiring and firing of staff, restructuring of departments are just a few of the business and management decision this student has made over the last 10 years in IT.

The decision making process for this student involves utilization of models to determine the benefits of the decision. The first step for this student is identifying the problem. The understanding of a problem provides an insight to the true challenged faced and serves as a methodology to gather more data, prior to making a decision (Drucker, 2001, p.3). Once the problem has been identified this student then reviews the different alternatives to solve the problem. Once a resolution has been selected, it is applied to the initial problem.

Gaps exist in the process utilized by this student if compared to Drucker, 2001, p.2) sequential steps. The steps include classification, definition, and specifying answer, deciding what is right, building out action and testing. This model provides an end-to-end solution for the decision maker as it involves a true understanding of the problem and a stepping-stone in the decision making process (Druckter, 2001, p.2).


References:

Drucker, F. (2001). The effective decision. Harvard Business Review on Decision Making,
Harvard Business School Publishing Company, p. 2-3.

Problem Identification Art or Skill?

When a problem's root cause is not recognized, identified, or fully explored, the effectiveness of any proposed solutions will be negatively affected. The techniques for rational thinking and recognizing filters with which you have familiarized yourself this week can make you a more effective diagnostician of problems, and thus, a more effective decision maker.

Rational decision-making is a part of daily business for this student, and several situations can be selected to address this discussion post. As an account manager, dealing with quota’s, customer satisfaction and overall growth of business is a challenge. The scenario discussed in this post will focus on the decision around increase or decrease of margin on deals in order to gain gross profit.

In sales number define the success of an organization and adjustments are often made in scenarios to ensure profitability. This student recently was placed in a position to have to choose between being “overly” profitable or gaining a new customer. The disagreement existed between management and this student. The thought from management was that we would only have one chance with the customer to attain business, however this student felt this was a potential long time customer. The decision was do we charge higher prices to obtain the one-time business or lower prices to obtain a long time customer. Management was adamant about being a single transaction account. However this student stood against this, the strategy applied to this rational thinking was similar to that of Drucker (2001). This student looked at the problem and created different specifications that would help determine a route to deciding.

Creating a clear specification list of what would happen from the decisions made was a necessary requirement in making the decision (Drucker, 2001, p.9). The need in this case was to make this customer a long-term customer rather than a single transaction customer. In order to accomplish this, this student needed to remove the stigma with management about the potential of this customer. Through a study conducted showing the growth potential of this account from the single account done at a highly discounted rate, this student was able to show management the value of the account.


This judgment strategy of anchoring and (insufficient) adjustment was the filter utilized by management in making the decision to see this account as a single transaction account. The theory is a result of our limited attention to other options and the selective strategies that we have developed through our experiences in life (Hastie & Dawes, 2010, pg. 73). Management’s decision was a conscious one, as it has been applied on different accounts but this student chooses to stand apart from other account managers.

In making decision one must utilized rational thinking and follow guided steps that analyze the proper root of the problem. In the case of this student management insufficient data was used to draw a conclusion and those filters nearly cost the organization an enterprise account.

References


Drucker, F. (2001). The effective decision. Harvard Business Review on Decision Making,
Harvard Business School Publishing Company, p. 2-3.


Hastie, R. K., & Dawes, R. M. (2010). Rational choice in an uncertain world (2nd ed.). Washington, DC: Sage Publications

Theories and Models of Systems Thinking

Think about how paradigms form the structures of systems around you. What are these paradigms, and what assumptions support them? How are they formed, and how do they change over time?

This discussion will focus on the paradigm shift from traditional thinking to systems thinking within Information technology space. As a professional in this industry, understanding and seeing the system around me change over the years has been interesting. One of the topics that have proven to remain interesting in the industry has been the make versus buy decision around software. Traditionally organizations have been quick to develop applications internally rather than purchase packages off the shelf. The ability to have a “home grown” application that has internal developers providing support was primarily the methodology of thinking in the Software sector of IT. Studies show that 90% of applications within an organization are home grown and account for a majority of downtime faced by organizations (Dubie, 2007). This methodology has been resistant to change through time, even though it has proved disastrous to support.

Ledeen (n.d) stated that there is a paradigm shift in the decision-making process on how to acquire these new software packages. The author argues that the ability for an organization to purchase packages that are highly customizable and sophisticated has led to a paradigm shift in the decision-making process. Through the utilization of systems thinking methodologies, organizations now use a set of criteria to measure their decision making process for software acquisition. Two of the five criteria are:

Core versus Context – The ability to understanding what functionalities are parts of your organizations core competencies is leading to a shift in making versus buying. Historically organization’s just built entire application systems and managed all functionalities, with the utilization of outsourcing; there is a shift in the thinking of how organizations manage their core competencies.

TCO – Consideration has now been placed on the cost of ownership of these applications. Traditional thinking placed little emphasis on the cost associated with an in-house developer and the ongoing fee associated with the developer. The change in the decision-making process has lead to the consideration of an outsourced model, which places the cost as a less expensive operational cost (Ledeen, n.d).

Assumptions made historically in the technology field state that homegrown application developers often provide the best solutions. The author argues that the highly customizable packaged applications provide similar or greater features and functionalities. The shift in technology has been continuous in the software application space and as organizations apply systems thinking to their decision making, a steady shift will occur.

References

Dubie, D. (2007). Homegrown applications are prim culprits to downtime. Network world Magazine. Retrieved from http://www.networkworld.com/newsletters/nsm/2007/0702nsm1.html

Leeden, K. (n,d). Build vs. buy. A decision-making paradigm for IT applications. Retrieved from www.nevo.com/our-knowledge/whitepapers/BuildVsBuy.pdf