VOL. 44, NO. 1 HEAD OFFICE: MONTREAL, JANUARY 1963

Decision Making by Management

MANAGEMENT is a decision-making process. Its specialfunction is to choose between alternative means ofmoving toward an objective.

None of the many changes brought about by tech-nology appears likely to diminish the opportunitiesopen to men who are gifted with skill in makingdecisions and trained in administration.

Doing business in an economy like ours demandsforesight and judgment besides resourcefulness andcourage. Only the person who applies all these quali-ties in making decisions advances his company’sbusiness.

The management principle is readily stated: thebusiness manager is paid to find and define the prob-lem, analyse it, develop alternate solutions, decideupon the best solution, and convert his decision intoeffective action.

The world is full of people who shun this sort ofresponsibility. Only a few seek it, and they becomeleaders. They know that there is a possibility that adecision they reach may be wrong, but they know thatthis chance may be minimized by following somesimple rules and procedures.

Many business decisions made from day to day areroutine and repetitive to the manager, but he must bearpatiently in mind that the problems are new to his staffand it is part of his duty to give guidance.

This is part of the leadership function of the busi-ness manager. Everyojae has a stake of the most con-crete kind in leadership, because the manager isaccountable for the success of his business or hisdepartment and for the continued employment of al!those associated with it and the satisfaction of thoseholding stock in it.

On a wall of the Engineering Societies’ Library inNew York we read this inscription: "Management isthe art and science of preparing, organizing anddirecting human effort applied to control the forcesand utilize the materials of nature for the benefit ofman." In carrying out this mandate, the manager hasto weigh the risks of every course of action against

the expected gains. Then, having decided, he must issueclear orders and put forth the drive to get things done.

Administration of a business is a network, in whichevery decision is connected in some way with otherdecisions which have preceded it, and will have abearing upon decisions to be made in the future.

Decision making has never been easy, even for thehighly trained man, but history is made up of thestories of men and women who were good at it. Busi-ness is complex, not only within its own walls butbecause of outside influences and pressures. A man-ager needs the qualities of a statesman, so as to see hisbusiness in all its relationships. He has to know hisfirm’s objectives and policies, what resources he cancall upon, the capabilities of those who will make hisdecisions effective, and then produce plans that takeall these into account.

A cardinal rule is that his decision must be adequateto the solution of the problem. There is no use inattacking a tank with a bow and arrow, and it iswasteful to shoot sparrows with a big game rifle.

Wide knowledgeDecisions on important matters are not within the

reach of men and women whose knowledge of factsand the forces acting upon them is small. There mustbe on hand a large store of memories of previous ex-periences and things learned which can be linked withthe current problem.

No reasoning can be done by our minds unless wehave units of comparison gathered through experienceand study. When we have many objects in our minds,our imagination ranges over them, assesses them, takesa little of this and a little of that, relates them signifi-cantly, and produces a decision. What is the faculty wepraise so highly as "good judgment" except this: theability to bring together a fact which we have justunearthed and a general judgment suitable to thepurpose long since deposited in the archives of ourmemory, and unite them effectively.

The business man must never stop adding to hisstock of knowledge and understanding, but this neednot be a burdensome task. If he is under pressure all

day long he will find it relaxing as well as useful tospend his leisure hours at something in which he mustbe deliberative: such as reading one of the classics(like the Thoughts of Marcus Aurelius or the Teachingsof Epictetus, which have many ideas useful in thinkingthrough to decisions) or watching documentary filmswhich broaden his horizons.

It is altogether foolish to think of the capable de-cision maker in terms of a cartoon stereotype--as a table pounder, a window gazer, a pacer of theoffice, an aspirin user or a man with a wet towel aroundhis head. One general belief may be given credence insome measure: the person who makes importantdecisions may not be sweet tempered. He is underpressure, he takes risks, he wrestles with the task ofgetting his ideas carried out, he has little patience withincompetency.

Some firms make no provision for the stress ofmanagement. Their managers are loaded with detailinstead of being relieved of all trivia so that they maydevote their special talents to important things.

The man who has to swim hard in muddy waters toget his head out where he can make an importantdecision may be plagued with "doubting folly." This isa state of mind in which a man cannot rememberwhether he did this or decided that or whether he didit in the best way. He is forever returning to see if hehas turned off the gas, locked the door, and the like.He calls back decisions for review.

When to be carefulIt is necessary in the convulsive scene of business life

to assign proportions to our problems and to set uppriorities. Clearing up mechanical difficulties is differ-ent from reaching a decision on a course of actionwhich involves people, budgets, and markets.

You need to give patience, time and thought todecision making when you are on unfamiliar groundor dealing with a strange subject. Decisions come easilyto the sales manager who has been twenty years on thejob so long as they involve only the factors to which heis accustomed. When a new factor is introduced, orthe manager moves into an area where he is a stranger,he must take time for orientation.

The power of deciding involves the danger of goingastray -- that is the essence of deciding. And goingastray involves some kind of penalty -- that is theessence of error. The consequences of a decision arepart of the total problem, and should be considered asfactors in it. We must balance risk against gain, andbe neither deterred by the one nor dazzled by the other.

This involves forethought. The manager is subject toone trial not common to the worker: he has the con-tinual feeling of incompletion. His job is never done.His energy drives him to consideration of the nextjob while this one is still in the works, and he needs tokeep his balance in both.

There is no necessary virtue in "planning" itself.Its value depends upon what the plan is for, what ends

it will serve, what difficulties it is designed to over-come -- difficulties arising from the caprices of fate,the actions of competitors and the quirks of humannature. Without a plan, fluid though it may be, wecannot reach decisions intelligently.

An umpire must call the strikes and balls as he seesthem, instantly. But mere speed in coming to decisionsmay have small relevance at the top business manage-ment level where a man’s contribution to the enterprisemay be the making of two or three significant decisionsa month.

This is not to say that we should debate and stewover every problem. We are probably too much givento sending out a man with a red flag in front of everynew idea as they used to do with steam locomotives.On the whole, it is wiser to make a decision promptlyand crisply after giving the matter adequate thoughtthan to linger over it and lose momentum and drive.

To make a sound decision it is not necessary to haveall the facts, but it is necessary to know what facts aremissing so that we may make allowance for the gapand decide the degree of rigidity to give our orders.

Some managers, in trying to avoid off-the-cuffmasterminding, make it a practice to take time to sleepon a problem. This can be useful if a tentative decisionhas been reached or workable alternatives outlined sothat the subconscious has something tangible to pusharound.

Very little that is good can be said about procrasti-nating. Any business will become paralyzed if thereare persistently long delays in the making of manager-ial decisions. They cause waste of time among person-nel, loss of team-work, and forfeiture of faith inmanagement.

Excuses for postponing a decision are not hard tofind. Recall the hesitancy of Hamlet. One moment hepretended that he was too cowardly to perform thedeed; at another he questioned the truthfulness of theghost; at another he thought the time was unsuitable,that it would be better to wait until the King was atsome evil act and then to kill him, and so on. Everyreason had a certain plausibility, but it would notstand serious consideration.

There are, of course, times for postponement, whena resolute determination to take no action until morefacts are available is a constructive contribution towise decision. The warning is against unwise or friv-olous putting off. We must keep in mind that to makeno decision is itself a decision, and must be justified.

Effective use of postponement was made by Penel-ope in Homer’s Odyssey. During the protractedabsence of her husband, Ulysses, Penelope was be-sieged by suitors for her hand in marriage. She putthem off for several years by telling them that shewould give her decision when the burial cloth on whichshe was working was complete. Then she undid bynight what she had woven by day, and so staved offdecision. Ulysses returned and drove out the suitors.

Computers and committees

The manager of today and the future will have tomake decisions involving an infinite number of con-siderations. While he will make all possible use ofelectronic equipment and committees, the final choicebetween alternatives is his alone.

Mechanical aids are widely in use. They make theassembly of data and the calculation of quantities easy.But, in a competitive market, the firm whose managersbest handle the qualitative factors which are indiges-tible to machines will have the edge in business success.

The results of massive computations depend uponthe knowledge, discrimination and intelligence of themen who feed in the raw data and assess the resultingreport. The machines cannot define the problem,determine the right questions to ask, set objectives orlay down rules. They do help in analysing the problemand presenting alternatives. They give facts instead ofguesses and generalities. They are tools for decisionmaking.

We recall The Sorcerer’s Apprentice, the greatsymphonic composition of Paul Dukas.The apprenticelearned his master’s secret for turning a broom handleinto a servant, and ordered the automaton to.take apail and fetch water. Then he couldn’t stop the crea-ture, which kept splashing water all over the room. Theapprentice, who hadn’t learned the magic words tobring the automaton to a standstill, seized an axe andsplit it in two: now there were two creatures busilycarrying water. Not until the magician returned werethe robots stopped.

Unless the manager of today knows the limitationsof machines, when and how to cut them off, and thefact that he himself must define, analyse, judge anddecide, he will be like the Sorcerer’s Apprentice, avictim of his own bag of tricks.

Decision by committee holds perils of another sort.There is no virtue in reaching a decision by yourselfwhen there is time and opportunity to consult otherswho have special knowledge. To do so would be towaste .available talent. But no business can prosperunder a debating society.

The function of a committee is to talk around asubject so that all its facets are revealed, to bring outthe facts and to spark thought. Then the manager mustjudge the relative value of what has been said, assessthe alternatives presented, and make the decision.

Making a decisionThe manager who wishes to build up the habit of

making decisions with wisdom and effectiveness mightdo well to consider these steps: (1) look at the situationgenerally and from it extract the problem; (2) pdt theproblem into words; (3) tidy up the problem; (4) the preparatory research thoroughly; (5) brush asideprebonceived ideas; (6) consider the facts; (7) thinkthrough to a solution.

The first job is to find the real problem, divestingthe situation of all irrelevant details. Masses of datamay look impressive, but only those facts which applyto the problem in hand are worth considering.

It is quite right to see the pattern of the total situa-tion and how the parts hang together, but successfulmanagers have the capacity to reduce the whole pic-ture to simple terms. Mendel, to whom we are indebtedfor the first effective work on hybridization, did notfollow his predecessors’ lead in taking only a summaryview, but examined every plant separately.

A problem only becomes intelligible when it is putinto words. There simply is no magic formula fordecision making, but the man who approaches thepoint of decision by setting out his problem in anorderly way stands a better chance of reaching the rightoutcome than one who relies on snap judgments.

In laying out an approach to decision making weneed to differentiate between tasks which demand onlythe application of known techniques and those whichhave unusual conditions that require clarification anddirected action. For example, the mail despatchingstaff faced with an unusual spate of envelopes knowsthat extra effort and perhaps extra time will see themthrough; but if there is an unusual number of com-plaints about wrong addresses, accompanied by amounting pile of uncompleted orders, then there is areal problem.

It can be solved if the person responsible grasps itsnature, gauges its true dimension, decides what todo about it, and takes immediate steps to cope with it.He breaks a big problem down into small, easily-tackled units, changing a vague difficulty into a specificconcrete form. He may go so far as to answer one"yes or no" question and then ask others until themajor problem is solved.

One method advocated by some teachers is "take itapart". You write down the problem about which youmust make a decision. In two columns underneathwrite down the points "for" and "against". When thisis done seriously and honestly you have a good ac-counting, and your decision will be based upon thebalance.

Tidy up problemsManagers may smooth their way by having all pro-

posals and problems tidied up before moving towarddecisions. Almost every problem needs to be exploredthrough such questions as these: Why is this necessaryor desirable ? What can it be expected to accomplish ?How can it be worked out ? Who will do it ? Who willbe affected by it? What harmful situations mightresult ?

Superiority in decision making rests on a solid basisof preparation, with a grasp of all the possibilities.When you reach a tentative conclusion, try to knockit down with dispassionate energy. Ask: "What willhappen if... ? Does this decision take care of A, B

and C possibilities ?" By proceeding in this way thebusiness executive will borrow a bit of the value of thescientific method and spirit: the resolute asking of thequestions: "What else ?"... "What if?"

You need to pay attention to detail in the prelimi-nary stages, while keeping in mind the end purpose.Toscanini, the great orchestra leader, is quoted assaying: "In rehearsing a musical work, the importantpassages can frequently take care of themselves; it isthe supposedly unimportant phrase or line that de-mands careful consideration."

The manager needs suppleness of mind. He willdisplay enthusiasm, but not the sort of zeal whichblinds him to facts. He recognizes that his opinionabout a thing is only something that comes betweenignorance and understanding. It is knowledge in themaking. To change an opinion in the face of new factsis a sign of vitality and progress.

In the course of his deliberation he will have takenadvantage of subconscious thought. All creative think-ing, including scientific research, emerges from thesubconscious. The "passed to you for action" memowhich consciousness receives may be couched in vagueterms, and may have to be worked into shape. But thisis no mystical process: it goes on hour after hourthroughout our lives. It is, however, an advantage torecognize it so that fullest use may be made of it.

Last in this group of seven suggestions is the think-ing through of the proposed decision to its conclusion.This involves testing every step leading to the decisionas well as anticipating what may follow upon it.

When you have reached the point where you havegathered the facts and tested them, thought aboutthem and weighed the consequences, then make yourdecision. Here are two illustrations of the folly ofhesitating. Buridan, a French philosopher of thetwelfth century, told us about the ass which was placedmidway between two equally attractive bales of hay,and died of starvation because he couldn’t choosewhich one to eat. Robert Browning’s poem reminds usthat Saul, crowned king at a time when one swift blowwould have scattered his foes and united his friends,stood midway between his duty and his task, and in-decision slew him.

The end result

We have located and defined our problem, collectedfacts, weighed the favourable against the unfavour-able; we have listened to what can be said by experts,friends and enemies; we have checked the accuracyof our information and of our thinking; we haveanalysed the causes of our problem and the effects ofvarious solutions; and we have arrived at a decision.What do we do next ?

The fatal thing to do is pigeon-hole it. The onlyplace to put a good decision is into execution. An ideahas been born, it has evolved, and has been trans-

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formed into a decision. Now the manager must partici-pate in carrying the decision into execution.

It would be a mistake at this point to spend time ,blooking back to see if you are too far from shore. Youare obligated, having made the decision, to develop acertain amount of blindness to the possibility of failure.By that act you give confidence to those who must dothe work of implementing the decision: your juniormanagers, foremen and workers.

It would be wrong to cling to a course if some vitalnew facts in its disfavour become known, but don’tchange your mind merely because you are running intoobstacles. The road may be strewn with rocks, but thatmerely means that it is a rough road, not that it isgoing in the wrong direction.

Be sure that your decision is promulgated clearly.Unless you make order and relation for your peopleout of the unrelated ideas and facts with which youhave wrestled, they cannot be expected to respond witheffective action. They must know what change inbehaviour is expected of them, what change to expectin the behaviour of others with whom they work, andwhat change will be made in the working conditions.

This is the manager’s directional guidance. Heestablishes goals and shows how to reach them. Chil-dren reciting Longfellow’s poem "Excelsior" havewondered where the ambitious, sad, self-denying anddaring boy carrying his banner with the strange devicewas climbing to. Let’s not leave workers in the darkabout our purposes and paths.

Mechanical problems associated with your decisionare relatively simple compared with the humanproblems.

For example, your decision may change the apparentstatus of workers, and it is astonishing how infalliblya man will be annoyed and deeply pained by any seem-ing wrong done to his feeling of self-importance.

This is one reason for careful advance consultationof all those who are to be affected by the decision. Itwill give you the benefit of their experience and theirideas, and make them participants in whatever comesto pass.

Being a decisive manager doesn’t mean being trucu-lent or living apart. To be part of the working forcewas emphasized as a necessity of management byspeakers at the Duke of Edinburgh’s Study Conferencein Oxford. The manager must make the time to keepin touch with juniors and to visit the production linefrequently. Only thus can he appraise the spirit of hispeople, tap their interest, and assure their co-operationin carrying out plans upon which he decides. Humanmotivations and human emotions are involved asfactors in the solution of every problem.

Of this be sure: no decision can be better than thepeople who have to carry it out. Their enthusiasm,competence and understanding determine what ".neycan and will do.

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