Observation Review of a Decision Making

Running Head: OBSERVATION REVIEW OF A DECISION MAKING 1

Observation Review of a decision making

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OBSERVATION REVIEW OF A DECISION MAKING 2

Summary of observation

The adaptation of new operational systems in an organization has the aim of improving

efficiency and reducing operational cost. Implementing operational changes in an organization

however suffers setbacks, if the management does not strategize on how to implement the

change. The introduction of new technology is among the major challenges affecting most

organizations today. The move from hardcopy file to soft copy files is aimed at reducing the

storage space needed and managing the staff size. The use of papers to store information is being

eliminated in many organizations today. The cost of stationary and filing space is being diverted

to improving the organization (Simon & Noblet, 2012).

The decision made in this case was to adopt a new IT system that allowed the

organization to reduce the amount of paper work. The decision was made by the CEO who is in

charge of making major decisions in the organizations. The CEO directed the manager to

implement this change. The manager used a slow pace to implement the change, as sudden

change of operational procedures would negatively affect the organization. The manager wanted

the staff to be trained first before implementing the changes ordered by the CEO.

The change from conventional to electronic applications may be driven by the need to

reduce operation cost. The use of modern technology to reduce paper work allows the

organization to store its documents in a virtual store. The organization does not need to have a

physical store, which is expensive to rent. The companys information is safe as virtual stores

can be backed up for safety purposes. Electronic applications are faster compared to the

conventional applications. This will enable the organization to improve its workload and increase

the revenue generated. Sudden implementation of change resulted to a disruption in operations.

The company hired more workers, which increased operation cost (Lawton, 1995).


Theory of bounded rationality

Decisions made by the top management may build or destroy an organization. Key

decisions needs to be researched and appropriate information used to make the final decision.

The management should have a backup plan to correct errors in the original decision. Decisions

are based on the information available, which may deceive come leaders into making the wrong

decision. The use of technology has been tested by many organizations. Technology improves

the way the organization operates improving on efficiency and cost. Managers often forget that

the initial cost for installing new technology is high. The staff in the organization needs to be

trained to understand new technology (Robert, Shepherd & Sharfman, 2011).

The theory of bounded rationality in decision-making evaluates decision-making limited

to available information, time available and the cognitive limitations of the managers. In this

case, the CEO does not take place in the daily operations of the organization. The CEO has a

general idea on how the organization works and how it can be operated. The information

available to the CEO limits his decision-making. The research by the senior manager covers how

organizations have benefited from the use of technology. According to Theory of bounded

rationality, the managers should research on the negatives implications of the technology. The

senior manager should also research the mode of adaptation of technology. This information may

enable the CEO to understand the managers reason for slow implementation (McKee, 2010).

The time available to make the change also forced the manager to make the change to

new technology. Time is a resource according to the Theory of bounded rationality. The decision

made by the manager to adopt the new technology was due to the pressure from senior

management. Pressure to implement the change limited the time available for the staff to adapt to

the new technology. The cognitive limitation in the CEOs mind was that it was time for the


organization to adopt new technology. The senior managers are responsible for key decisions in

the organization and determine the way forward.

Theory of bounded rationality focuses on major decision-making processes. Major

decision-making processes omitted in this case resulted to failure in implementing the change.

The first stage in the decision making process is the orientation stage. This stage was omitted in

the decision making process. The CEO should have visited the operation floor and interacted

with the workers and the managers. Interaction with the workers and managers could have

provided an insight into the ability of the workers to handle the new system. The CEO would

have understood that training needed to enable the workers adapt to the new technology (Nag,

Ganesh, & Pathak, 2001).

The decision making stage that the organization experienced was the conflict stage. The

slow pace of implementation did not please the CEO. He pressured his manager into

implementing the decision. The new change caused an increase in paper work that was contrary

to the goals of the CEO. The increase in the paperwork was due to the need for paperwork for the

conventional applications and the electronic applications. The organization ended up employing

more workers to handle the additional workload (Fitzgerald & Ayson, 2012).

The emergency stage of decision-making is where the management meets to decide the

way forward for the organization. This stage in the organization required the CEO to interact

with the staff members to understand why the change was not effective. This increases the

information available, the time needed to ensure that the change is effective and cognitive

limitation of the manager. The discussions between the manager and the CEO enabled the

manager to explain the effects of quick implementation of new systems. The increased period of


two years enabled the organization to realize the benefits of the new systems (Shaft, Albert &

Jasperson, 2008).

The last stage in decision-making process is the reinforcement stage. At this stage, the

manager and CEO were able to evaluate the effects of the new technology on their organization.

Increased understanding enabled the managers to formulate tailor made solutions that addressed

issues affecting the company. Evaluation of the new systems also allowed the managers to

identify problems facing the organization and correct them before they adversely affected the

operations. Departments having a lot of paper work were able to reduce their workload.

Implementation of new systems in an organization requires the management to have the right

information and resources to ensure the success of the change (Tolbert & Hall, 2008),

Decision made in this situation

The manager was under pressure from the CEO to implement the new system. The CEO

had no experience working in the departments thus lacked an informed opinion on the mode of

implementation of the project. As the manager, I would use the Theory of bounded rationality,

assess the available resources, and implement the changes in steps. Making an informed decision

requires the manager to evaluate all the options available to ensure that the decision is successful.

The manager is answerable to the CEO so I would follow the CEOs directive to implement the

new technology in the organization. I would implement the changes using the departments in the

organization.

I would select a department and implement total change to the processes, and select

another department and implement gradual changes. I would consult the CEO to allow the study

to take place for a limited time before implementing total change in the organization. The study

would help improve the information available for decision-making and change the manager is


cognitive thinking. The CEOs time limit on the study will ensure that implementation of the

change is not delayed. Implementing the change in stages will enable the CEO and manager to

evaluate the effects of the change to the organization (Teale et al, 2003),

The decision making process used involves all stages. The orientation stage will enable

the senior management to interact with the managers and other workers in the organization. I will

be able to explain why I prefer a gradual adaptation of new systems rather than a sudden change.

The conflict stage of decision-making will be on a lower lever compared to the case study. This

is because the mode of application of the new strategy. Implementing new strategies using

department has a lower effect on productivity that overall implementation. Comparing gradual

and rapid implementation is also possible using two departments in the organization (Robbins et

al, 2012).

The effect of the emergency stage will also be reduced using one department compared to

the whole organization. The organization will not need to employ more staff as staff in other

departments can move to the study department. This will enable the organization to save on cost

of employing temporary staff. Training workers in stages is a benefit realized using the gradual

approach of system implementation. The organization will not have to halt its processes to

accommodate change in the organization. Training workers in stages will reduce the risk of

failure of the new system and reduce the cost to the organization (Burke & Church, 1992).

Using departments to implement change in the organization is the best way to implement

change. The managers can use a department as a case study to evaluate the impact of change on

the organization. Failure in the system can be addressed at a lower scale and precedent can be set

to deal with similar problems in the future. Gradual implementation of change does not strain the

organizations resources. The management will implement the change gradually within a shorter


time than the two years taken by the organization in the case study. Implementing change should

start with a department with a small paper work load expanding to other departments (Morrow,

2007).


References

Burke, W., & Church, A. H. (1992). Managing Change, Leadership Style, and Intolerance to

Ambiguity: A Survey of Organization Development Practitioners. Human Resource

Management, 31(4), 301-318.

Fitzgerald, M. & Ayson, S. (2012). (Compilers.) Managing under uncertainty: a qualitative

approach to decision making, Sydney: Pearson.

Lawton, P. (1995). Initiating and managing change in your organization. CMA Magazine, 69(7),

28.

McKee (2010). Ch.6 The Human Side of Planning: Decision making and critical thinking,

pp176-181

Robbins et al (2012). Ch.7 Decision making: The essence of a managers job, pp259-289.

Robert M, J. J., Shepherd, D. A., & Sharfman, M. P. (2011). Erratic strategic decisions: when

and why managers are inconsistent in strategic decision making. Strategic Management

Journal, 32(7), 683-704.

Teale et al (2003), Ch.1 Management decision making in context, pp 3-22.

Tolbert & Hall (2008). Ch.6 Decision making, pp110-120.

Morrow, I. J. (2007). Review of 'Global organization development: Managing unprecented

change'. Personnel Psychology, 60(3), 781-784.

Nag, G. C., Ganesh, S. R., & Pathak, R. D. (2001). Case Studies of Technological Change and

Organisation Culture. Journal Of Transnational Management Development, 6(3-4), 3-19.

Shaft, T. M., Albert, L., & Jasperson, J. (2008). Managing change in an information systems

development organization: Understanding developer transitions from a structured to an

object-oriented development environment. Information Systems Journal, 18(3), 275-297.


Simon, E., & Noblet, J. (2012). Integrating ERP into the Organization: Organizational Changes

and Side-Effects. International Business Research, 5(2), 51-58.

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Observation Review of a Decision Making