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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.


April 30, 2011

Groupthink

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.

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 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. 


Decision Tree

Among the tools that we used for the mini-project, I found that Decision tree is the most convincing tool when it comes to presenting to board of directors. the systemic and systematic ways that decision tree show both quantitatively and visually can make more sense for the receiver. 

its strength over some of the other tools, the grid for example, is that the logic behind it appears to the surface and it is not as debatable as others. human mind was educated to deal with systems that can be split into parts and it seems that it is ready to understand and accept such approaches more that others.

Decision tree was used in all presentations which indicates its rationale and user-friendly nature. moreover, while there were no issues in applying the approach except for taking another routes or assumption, we could indicate unjustified or inappropriate use of other tools.

although all tools are important when they are used in the right context, decision tree seems to appear in every sophisticated  decision making.


Decision Making Tools Selection

It was interesting to know that such a big number of decision making tools exist in the business environment and the literature. while every tool has its significance, I think that this significance comes from the user judgement and rationale behind using a specific tool. here again come bias to play a role even before using the tool. 

many people tend to make their decision more robust by using sophisticated tools rather than using the appropriate tool. there is no correlation between complexity and effectiveness and robustness. users who tend to forget this reality tend to use many tools to confirm the result of using previous tool; or even to justify using a specific tool.

I think that it is better to use the simplest tool that does the job. all tools has bias involved in them. accordingly, trying to justify a bias with a bias does not make sense.


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  • The sale man is indeed important for the organization in a short time. But he will impact on organiz… by on this entry
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