It is becoming quite apparent that businesses, big and small, need to understand how decision-making affects their entire operations. When making decisions, managers in organizations apply either a programmed or a non programmed decision-makings process. Both processes are affected by the culture of the society in which the decision is being made. For example, mangers in countries with relatively low tolerance for ambiguity, such as Japan and Germany, avoid non programmed decisions as making. Operating manuals in organizations in these cultures tend to be relatively thick. In contrast, mangers in countries with relatively high tolerance for ambiguity, such as the United States and Norway, seek responsibility for non-programmed decision making. The secrets of effective decision making lie in the balance between rational and intuitive thought. The following strategies provide a useful framework for making effective decision.
- Determine the problem and identify the goals to be accomplished by your decision.
- Engage your intuition. Get in touch with your instant feeling on the situation and make note of it.
- Collect data. Don’t be too obsessed with researching every piece of available information.
- Identify the actions needed to accomplish your established goals.
- Develop a list of pros and cons for each possible action (each pro and con need not be weighted equally). Monitor your emotional reactions to each option.
- Enlist the opinions of others and then make an intuitive judgment about the best action to perform.
Programmed and Non-programmed Decision-Making:
The programmed decision-making process, which is by far the most commonly used in organizations, entails making decisions based on precedent, custom, policies and procedures, and training and development. An advantage of this approach is that the basis for a decision can be pretested for efficiency, which reduces risk and stress for decision makers (“I followed the procedures manual”, “I did it the way it is supposed to be done, or “I did it the way it has always been done”). A disadvantage of this approach is that when the organization’s environment changes, the programmed bases for decision making often become obsolete and ineffective, which can lead to decision-making ineffectiveness. Of courses, some of the advantages and disadvantages are culturally determined. For example, people in some cultures do not like too much challenge; they prefer a structured environment that provides certainty and become frustrated in ambiguous, challenging situations. People in other cultures prefer challenge and become bored in an environment that provides too much structure.
The non-programmed decision-making process analyzing current data and information, obtained through a systematic investigation of the current environment, for the purpose of identifying and solving problem. Two approaches to this process are rational decision making and satisfying decision making.
1. The Rational Decision – Making Process
Rational Decision-Making has long been thought of as the predominant method to strive for in making smart decisions. This process includes identifying objectives, gathering facts, analyzing the alternatives and mapping the most efficient course of action. In Western Culture, the steps in the rational decision-making process are as follows:
- Define the problem.
- Identify a set of minimum criteria on which to base the decision.
- Identify multiple viable choices.
- Quantitatively, evaluate each viable choice on the basis of each criterion.
- Select the optimum choice, the one with the highest quantitative value, and
- Implement the Choice. In Western cultures, the “ideal” decision model thus presumes an optimum choice among valuable alternatives.
2. The Satisfying Decision-Making Process
The satisfying approach assumes that there is in incompleteness of information; that is, decision makers do not possess the information necessary to optimize. Therefore, they satisfied; they select the first choice that meets some minimum criteria, that is, the first choice that is ‘good enough.” They do not identify multiple viable choices. An advantage of satisfying over the rational approach is that it is quicker and thus less expensive. A disadvantage is that you may be foregoing a better solution.
The Impact of Culture on Non-programmed Decision Making
The validity of the non-programmed decision-making process as a prescription for decision-making behavior is affected by culture. Culture has been defined as “the interactive aggregate of common characteristics that influence a group’s response to its environment” Since the characteristics vary from group to group, people in different cultures are likely to have different preferences for a certain state of affairs, for specific social processes, and for “general rules for selective attention, interpretation of environmental cues, and responses”. As such, people indifferent cultures view and react to problems differently. What is rational in one culture may be irrational in another, and vice versa.
Source: Cross Cultural Business Management Notes-MGU