May 31, 2011

Much Information to Make Decisions

There is always an emphasis on the importance of collecting as much information as possible to make a robust decision. however, what happens if there are too much information that make it confusing to make a decision?

many would argue that among this information there is useful and relevant information and irrelevant information that must be excluded from the decision making. this argument leads to another decision to be made, that is decide which is the useful information. the complexity here is obvious especially for complex situation.

other argue that the best solution to avoid such dilemma is to ask very focused questions that require limited information to answer them. this would help in avoiding the huge amount of information and in categorise them to relevant and irrelevant.

The above is ideal and is relative depending on the uniqueness of every situation. however, it worth thinking of especially in the reality of the increasing information that is result of the technology development and establishing knowledge management systems.

SSM and Bias

this blog might be a repetition of another one. well, it might be something that deserves to be thought of.

Robust decision are described as the ones that involve the minimum bias possible. one of the decision making 'tools' that were introduced in the literature is Soft System Methodology (SSM). for me those might involve some contradiction.

people interpret things differently depending on their experience, knowledge, and other factors. the SSM methodology emphasises the importance of capturing all interpretations because human knowledge and experience is valuable and cannot be ignored. the solution that will come at the end represents all participant thoughts about the problem.

in bias people tend to interpret, prefer, prioritise ideas and things depending on their knowledge, experience, and the way the see the world. in decision making tools are created to decrease these trend rather than gathering them and try to form a holistic picture.

there might be some weaknesses in my argument because it can be relative. however, in a size of a blog the idea is to stimulate some ideas that help thinking out of the box regarding some decision making situations.

Ethical Decisions in Business

The decisions that we had to make in RDM so far is related to choosing among financial, marketing, or other alternatives. A manager in an organisation can be put in a situation where they have to make ethical decisions. Here there is a problem-how much ethics weigh? I will give an example and then question it.

If you are a sales manager and you have a sales man who is very bright to a degree that his sales figures is significantly high. This guy plays the main role of your organisation profitability. However, he is a "ladies guy" who brings his behaviours into the organisation. You can see him flirting with women in the office and might come to touch them. Many women complained about it. His behaviour continues although you have warned hem many times. If continues like that you are afraid of harassment lawsuit but firing him has a big impact on your business. How to decide?

Some might say that some tools like OMI can serve in such cases. I think that ethicality evaluation is much complicated than putting it into a tool. What about the bias involved too?

Some researchers, however, suggest other tools that can be used in ethical decision making in business. Never have the chance to read them in detail.

May 28, 2011

Maintenance Classifications

literature classifies maintenance approaches to Preventive (PM), predictive (PDM), total productive (TPM), reliability-Centred (RCM), and others. however, careful reading leads to a conclusion that many of them are integrated. researchers say that PM is part of PDM. they also say that to have a good TPM you should be applying PM and PDM in the first place. this can sometimes create confusion for managers that are not interested in academic research.

my personal conclusion of this is that there is one maintenance approach which is the latest that approves success. other maintenance approaches should become practices that are included in the latest approach. what is the value of having all these classification if the aim is to practice? for example if I am fully applying PM, someone can just suggest that I am 50% applying TPM. and this can be true for other approaches too.

I think that the most important thing in maintenance is practice rather than having theories. one approach is enough if it is annually updated to include all the practices that prove beneficial. 

Intangible and Tangible Assets

the main areas in intangible assets are people and the knowledge they produce. while some writings study both separately, others refer that both are becoming interdependent or even integrated.

while EFQM does not refer to this relation in its model, I think that this integration is the significant issue of assets management. all assets now are connected to technology and depend on information and data that is entered in. accordingly, the separation of the two assets management will not be valid in the near future.

EFQM and Competitive Advantage

it is intersting that EFQM does not refer/ recognise clearly knowledge as an asset. while manageing knowledge and informatin is mentioned under resources in section 4, this managemnt was focused on sharing information and gave a big focus on innovation. 

recent writings about knowledge consider it as an asset that must not only be managed but effecintly collected. implicit knowledge is the most source of information which cannot be formally collected. implicit lnowledge is also what really builds the competitve advantage of a company. I think that collecting implicit knowledge is the key for knwledge management taking into consideratin that implicit knowldge becomes explicit after it is collected and documented.

arguably, all new organisations are knowledge based and their competitive advantage is knowledge. while many recognise knowledge and try to manage it, the majority cannot collect and manage implicit knowledge which creates the competitve advantage.

April 30, 2011


Groupthink is a phenomenon that refers to the preference to follow the group consensus over the personal logic and reasoning. this can happen in any group even the good ones. there are many reasons for group thinking such as:

  • strong, persuasive group leader.
  • A high level of group cohesion.
  • Intense pressure from the outside to make a good decision.

to avoid groupthink, the team leader should understand and explain the groupthink phenomenon, build an environment of encouraging ideas and criticism, and to follow a decision making process that is clear and involves validating decision before and after they are made.

decision making tools, such as brainstorming and  risk analysis, can also help in avoiding or minimising groupthink effect.

During meeting a team leader should:

  • always look for signs of groupthink.
  • if signs are identified, the team leader should discuss the issue with members and make it clear.
  • assess all risks involved in any decision to be made. if risks are high, the leader should seek more validation for the decision.
  • can ask for external information and validation.
  • use decision making tools and techniques to avoid groupthink in the future.

Technology and Knowledge Management

Although effective leadership, culture and structure are important for successful companies, managing the firm’s assets are occupying a significant position in achieving strategic strategies and sustaining competitive advantage (Hitt, Keats, & DeMarie, 1998).

Assets management for acquiring competitive advantage focused on the physical assets in the past since it was functioning in the post-industrial revolution era. The importance of intangible assets such as people and information is increasingly taking a special importance. EFQM (2010) emphasises that excellent businesses should have the up to date technology and to effectively manage their knowledge and information. Therefore more theories and practices about managing knowledge appear in literature and in practical researches.

however, the integration of the two is the key for building the competitive advantage and achieving the desired returns. in maintenance for example, it is crucial to have a computerised system to manage the amount of data and information generated. new generation will, arguably, enhance performance and cut costs for its development is based on lessons learned from businesses experience.

April 27, 2011

Human Assets

Human intellectual are the source of knowledge, innovation and creativity which are the key for a successful company. Moreover, human capital is the most difficult asset to imitate and hence it is the one that builds the unique competitive advantage.

Therefore, managing human assets is essential. This management depends on strategies for obtaining creative, highly skilled, and experienced people and create a culture that rewards and motivates them and builds their loyalty for the company. 

all other physical assets depend mainly on human knowledge and decisions. having the human capital healthy and well managed is the way to guarantee that success of any physical asset management system.

Intangible assets and Competitive advantage

Increasingly, companies are trying to get competitive advantages that make them different and unique in the market. However, without having a sustainable competitive advantage a company would be threatened with loosing these advantages in such global, technological and competitive business environment that generates huge amount of knowledge.

While the trend after the industrial revolution was to focus on tangible assets, such as buildings and equipment, to create competitive advantage, the technological revolution made it clear that intangible assets are the most important competitive advantage for companies.

Microsoft and Apple are examples of this importance. Microsoft’s success and value are based on the knowledge, creativity encouraging culture that produced superior software programmes, and the creative marketing abilities that helped in building a huge customer base. Recently the significant importance of intangible assets has been under research in the light of the declined shares prices of Microsoft coupled with the rise of its competitors’ shares Google and Apple.

April 16, 2011

A video about Asset Management

could not insert the video here but here is the link to it. 

April 15, 2011

Things to Consider when Outsourcing

Some Idea to consider while outsourcing:

1-  Understanding what to outsource depends on understanding where the competitive advantage of the company comes from. the company's competitive advantages should not be outsourced if possible.

2-  Outsourcing is not about cutting costs only. The cost might increase but there will be an increase in the revenue too. Moreover, it might result in cutting some other costs.

3- It is important not to lose complete control over the outsourced activity because the client might not have the ability to control or effectively manage the vendor.

4- When an activity is outsourced, it is important to assign some mangers to handle the vendor.

therefore many researchers suggest that a exiting strategy should be established in the contract to handle any issues with the contract, security, or the quality delivered. this exiting strategy allows the company to switch the vendor without any damage.

Developing Markets for IT Outsourcing

some might argue that the major aim of out sourcing is to get the best possible quality in the lowest possible price. taking this concept as a way of work for IT services, it is interesting to know that  India is number four on the top five list of customer satisfaction in a survey done in the UK’s top IT spenders. Last year the percentage of UK companies that outsource IT services in India jumped from 47% to 57%. Moreover, the experts are expecting the Indian outsourcing market to grow in the next ten years and that new IT outsourcing markets to grow in the future such as the Egyption market.

businesses are becoming more globally managed. the physical location of a company is run by people from all over the world. 

Outsourcing 1

outsourcing is recommended by EFQM as it helps the organisation to focus on its core functions, cut the costs, and might help in getting better services.

I think outsourcing has proved a success in many organisations and its failure was usually related to managing the contracts and monitoring the quality or choosing the suitable resourcing provider.

it is recommended therfore that these aspects should be taken into consederation when out sourcing:

1- choosing resourcing providers and negotiating the contract conditions must me done by a team that involves all the departments affected by outsourcing such as financial, HR and others.

2- Prepare the staff in the company by informing them about the outsourcing plans. this can save the company staff resistance in the future.

3- choosing providers should have a balance between price and quality.

4- the organisation's requirements should be clearly identified before negotiating any contracts.

the subject of outsourcing is wide and I think it deserves to be explored and developed becuase it can be an opportunity to build a new business environment were sharing and cooperation is the norm.

April 07, 2011

No Decision?

Discussing decision making is always about how to make a decision robust. However, what do we think of not making a decision at all?

not making a decision can be either good or bad decision. it is good when it is resulted from making a robust decision to not to take/delay action. this decision is based on information that support it.

on the other hand, it is bad when somebody thinks that nothing will go wrong if they do not take any decision/action. so they take a decision not to make decisions based on fear/psychological concerns. 

arguably, both involve decision making that result in not making decisions. Differentiating both is important to be aware of how robust our decision are. Moreover, it helps in creating self-awareness that can be a base for developing personal decision making skills.

Is it All about Tools?

Is making bad decisions all about using tools? Managers have to make lots of decisions on a daily basis that are very important because they affect productivity, time, relations, and other personal aspects and hence the work itself. these decisions are made in a second which does not allow a person to use a tool. 

in this sense, robust decision making can be a personal trait that can be developed as it is the case in leadership. to illustrate here are some of the bad decision that people make daily suggested by decision-making-confidence:

  • saying yes when you'd rather say no
  • doing things that you don't want to be doing
  • making decisions so other people think well of you
  • spending time with people you don't want to be with
  • making decisions so others can feel OK but you have to sacrifice in some way
  • allowing others to treat you poorly
  • letting others make decisions so you're living the life they want you to live

someone might think that these are related to personal and social issues. yes, but I would think that business is a social environment where people interact and many of the previous bad decisions can lead to failure for a manager who is perfect in using decision trees.

I think that studying decision making as a subject that is related to personal traits is as important as teaching decision making tools.

Robust Decision Consequences

After using decision making tools, one can think that they are able to make a decision (robust one) that guarantee good results. practically robust decisions do not guarantee any results. the universe is changing continuously and has its own plans. the benefit that these tools add are trying to anticipate some results in the light of the existing information. however, given that information accuracy is a function of time, the decision 'robustness' is defined by time it was made. the consequences of the decision does not define its robustness. i.e. very bad results does not mean that a decision is bad and vice versa. it is impossible to know all the possible consequences of a decision until you have made it.

March 27, 2011

Psychology and Leadership

Nearly all good leadership courses around the world aims at creating self-awareness more than going through leadership theories and techniques. having the ability to understand the self enables the person to adapt to many situations which is necessary as a leader.

understanding others behaviours and the expectation in different situations is also important to support the leader self-awareness. for example, understanding the reasons which make followers resist is crucial to be able to use self-strengths and knowledge to handle it. 

Having a clear and agreed-on vision is important but, in my opinion is not enough because it does not, as is the case for other leadership personal traits,  create sustainability. having a vision, charisma, self-awareness, enthusiasm, and communication skills can make a leader but it does not guarantee that this leader can lead in different situations which is the case in real life under the continuously changing environment.

Psychology in my opinion, although it is frightening word for many, is important to deal with multi-cultural people, change, and to make more robust decisions.

March 19, 2011

Simulation Bias

Simulations are widely used in companies and factories. it is argued that simulation is not a decision tool but it is a tool that can work out 'what if' analysis and then people have to decide among options. if we look deeply inside the simulation process, we can see that the system does many decisions and assumption before it gives the final options that we have to choose among. there many 'what ifs' going along a route before it going to a final result that we can see.

An example of that was the simulation that we have done in the leadership module. we had to make decisions and give some numbers and the system/software would estimate the profit. the software would not be able to make such decisions without being programmed with many human assumption that covers many situations. these assumptions are holding the programmers' bias.

In my opinion, simulation is an automated scenario analysis to a big extent. it is very useful and can predict future results and situations, but its accuracy is related to the bias used by programmers.

SSM as a Decision Tool

Introducing Soft Systems Methodology (SSM) as a decision tool was interesting. SSM is known as a sophisticated methodology that involves collecting perceptions of many people and takes long time to be applied. however, I am thinking of finding differences between perception and bias. Bias is the preference towards a particular perspective or idea because of objectivity or somebody's own belief. this belief and objectivity comes from experience in life and the knowledge that this experience generates in people's brains. But, is not this what SSM is trying to do? collect the bias from everybody? their bias describing the real world and their bias in designing conceptional models and then compare the two? is not it what decision makers try to avoid?

The literature mentions that SSM has proven to be very effective approach in the development of many organisations and businesses. but I am not sure that it can be considered a decision too itself or many decision tools are integrated within the methodology. 

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