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Decision Making Skills In Business Environment

1578 words - 7 pages

Decision making can be defined as a mental process of making choices among possible alternatives to make a practical decision (Reason, 1990; Wang, 2000). From selecting what items to buy in a supermarket to deciding which television channel to watch, we often have to make decisions in different conditions, particularly when we are facing uncertainties and trade-offs. Admittedly, decision-making skills have become increasing important when it comes to the highly competitive and ever changing business world. In view of that, a variety of models have been developed by the scholars from all around the world in an attempt to conceptualise the decision making process and maximise its potential output. In this paper, we will look at the role of the Carnegie and the Incremental decision models in explaining the decision making process in the business environment and how they differ from each other.

Carnegie Model is the brainchild of several researchers associated with Carnegie-Mellon University, for which the model is named after. This model helped formulate the bounded rationality approach (an approach which states that managers are unable to follow ideal procedure in decision making) to individual decision making, as well as provide new insights about organisational decision (Daft, 2010). In this model, consensus is strongly emphasised through the formation of a “coalition” consists of interested parties like managers and stakeholders to decide on the final decision. For instance, when the goals for a certain task is ambiguous, different managers tend to have different priorities on which problem to be solved first. As such, they have to bargain about the problem and build a coalition to address the problem. Another reason for the existence of a business coalition is attributed to the limitation on the ability of a manager. This can be explained by the fact that a manager is constrained by his or her cognitive abilities such as time, energy, resources and ability to address an issue. These limitations then lead to the coalition-building behaviour where managers tend to discuss with one another to gather information and reduce ambiguity (Daft, 2010). In short, agreement between different stakeholders is the deciding factor of an ultimate decision in Carnegie Model.

Although a consensus has been reached with the agreement of different stakeholders and parties, some critics pointed out that this will lead to a greater problem which they term it as “satisficing”. Satisficing means an organisation accepts a satisfactory rather than optimal approach to maximise the performance. In layman’s term, it means the final decision made by the coalition is just satisfying the stakeholders sitting on the board but that solution may not be the best one to optimise the performance of an organisation. Secondly, managers are concerned with immediate problem and short-run solutions or what Cyert and March (1963) termed as “problemistic search”. Problemistic search...

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