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Decision Making Model Analysis

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Autor:  anton  20 November 2010
Tags:  Decision,  Making,  Analysis
Words: 1710   |   Pages: 7
Views: 388

Decision Making Model Analysis

Decision-making and critical thinking have a distinct relationship, it is a relationship where one is used as a support tool for the other. Critical Thinking ‘is ... conceptualized as a process of active critical and creative inquiry. It is viewed as a cognitive approach to an active, rational assessment of information... and is based on an awareness and understanding of a set of logical analyses that permit a rational evaluation of arguments.’ Decision making ‘is rarely a matter of picking up a single problem and disposing of it in expeditious step-by-step fashion… every problem comes with a context… it’s own history and the host of… problems that coexist with it’ it is more ‘a process, a sequence of behavior, that stretches back into the murky past and forward into a murkier future… it is a turbulent stream’

It is within this framework that decision making models can be applied to specific situations within work and personal life. Specific models that can be applied to work situations include the following:

1. The Seven-Step Path to Better Decisions

2. Rational Decision-Making Model

The Seven-Step Path to Better Decisions includes the following Steps that are to lead towards the conclusion of making a better decision

1. STOP AND THINK – think ahead. Stop the action for a time to allow for calm analysis. This is a powerful tool against poor choices.

2. CLARIFY GOALS – What are you short, medium, and long term objectives or goals. A decision that fulfills the immediate can prevent realizing your long term goals

3. DETERMINE FACTS – Have enough information to support a wise choice

4. DEVELOP OPTIONS – You know what you want to achieve and have made your best judgment as to the relevant facts; make a list of options, a set of actions you can take to accomplish your goals.

5. CONSIDER CONSEQUENCES – What does this really mean, what effect will this decision really have?

6. CHOOSE – Make your decision.

7. MONITOR AND MODIFY – Pretty much all hard decisions use imperfect information and "best effort" predictions, a percentage of them will be wrong. Ethical decision-makers need to monitor the effects of their choices. If they are not producing the intended results or are causing additional unintended and undesirable results, they re-assess the situation and make new decisions.

Secondly, the Rational Decision-Making Model which is based on the U.S. Military’s means of decision making in times of crisis. This rationalist decision-making model concludes (1) a set of possible outcomes is known; that an expected optimal outcome can be known to a high degree of confidence (2) calculations are based on similar past actions, assuming what affected past performance will similarly affect future performance. (3) Feedback causes corrections within the model for deviations to the plan. An assumption is that a great amount of information will lead to greater convergence or scenario likelyhood.

In other words, greater information lowers ambiguity and uncertainty can be reduced by gathering necessary information. This model relies greatly on the reliability of information gathered. (4) this model presumes to be objective. Criteria are established and weighted mathematically, and the factors are added up, thus reducing the chance for subjectivity to drive the decision

The specific outline of the Rational Decision-Making Model contains the following steps, as applied to scenarios outside of the military decision scheme:

1. Set Organizational Goals and Objectives

2. Develop Alternatives

3. Compare/evaluate alternatives using objective criteria and weights based on the leader's guidance

4. Choose among alternatives the one that best matches the criteria

5. Implement the decision

6. Command, lead and manage

7. Feedback loop-observe results and begin process again as required

Both of the models, Seven-Step Path to Better Decisions and the Rational Decision-Making Model seem very similar in their steps, but they are quite divergent in what is given more importance while evaluating the ‘correct decision’. The U.S. Military based Rational Decision-Making Model is driven from an overriding rationality were conscience doesn’t necessarily need to reside, but the Seven-Step Path to Better Decisions places this ethical need at the core of its foundation.

Primarily, my decisions at work are more aligned to the Seven-Step to Better Decisions model that they would be to the Rational Decision Making Model. This is fundamentally do to my own personal need to be ethically correct before corporately or organizationally correct.

Recently, I was faced with the task of allocating limited over-budget funding to our top tier reseller accounts. The objective of this over-budget funding by the RedRob Wireless organization allocated to the Roughstuff brand (for whom I work) was to help the Roughstuff brand attainment its Fourth Quarter 2005 customer acquisition targets. These top tier accounts range from large Roughstuff exclusive dealer companies (Salty Wireless, PagemeWireless, etc…) managed privately or owned by a small group of business-people to large multinational corporations (BestBigBox, Circuits, etc…).

If a cursory overview is taken and based strictly on the corporate success edict provided by the Rational Decision Making process there was no choice but to provide the additional budget to the large multinational corporations reselling Roughstuff’s products and services. There is a greater ability to achieve the corporation’s objectives as outlined with the extra funding with these partners, given the larger partner’s broader market appeal, leverage of their existing and upcoming Christmas traffic, and their massive advertising impact.

What the Rational Decision Making process didn’t allow to be accounted for, as it wasn’t included in the overall objective, is the financial stability and long-term profitability of Roughstuff’s exclusive dealers. Additionally, the directive did not encompass the impact that the larger RedRob Wireless Brand was having on these partners during the Fourth Quarter 2005. With the very aggressive RedRob Wireless marketing initiatives these Roughstuff exclusive dealers were finding it very hard to maintain adequate sales volumes to, at the very least, support their ongoing business costs.

It was through the analysis of competing decision making models that we were able to determine that the short term Rational Decision Making process was going to be ineffective in the long term health of our partners and was not going to be ethically correct. For this reason the Seven-Step to Better Decisions model not only provided for the morally or ethically correct decision to be made, but would also ensure that the Roughstuff brand would remain strong past Christmas, while gaining incremental productivity towards the Fourth Quarter 2005 objectives.

When applied, the Seven-Step to Better Decisions model provided a logical method of though, a financially acceptable risk and an ethically gratifying decision. As applied to this decision outlined, the process progressed as follows:

1. STOP AND THINK – what was actually occurring? Was it the erosion of Roughstuff’s market competitiveness? Were the sales, marketing, finance, or operational departments not working effectively together or executing the Fourth Quarter game plan?

2. CLARIFY GOALS – Although it is imperative for the Roughstuff brand to show its ongoing strength of customer acquisition in the marketplace, The Fourth Quarter 2005 (Q4-05) was not the end-all or be-all, it is just a period of time within the life of the Roughstuff brand. What was important? The primary goal needed to be the long-term stability of the Roughstuff brand within the USA marketplace, this is met through financially viable exclusive resale partners and the education of the broader organization to Roughstuff’s needs.

3. DETERMINE FACTS – Overriding facts were that (1) Roughstuff was financially better off in 2005 given the increased focus on a ‘better customer’ vs. getting every customer, (2) revenue generated by current subscriber base was among the best in the industry, and (3) Roughstuff would report (even if short in the Q4-05) one of its best years of operation (now as a wholly owned subsidiary brand of RedRob Wireless).

4. DEVELOP OPTIONS – Funding large partners with additional funds that only increase our costs related to these partners (e.g. an incremental $1 Million will net an additional 10,000 activations at BestBigBox) OR funding increased activation/sales compensation at Roughstuff’s exclusive partners (that same $1 Million will ensure that Roughstuff’s exclusive partners will survive well past 2006-2007 with only a marginal decrease in the overall productivity of Roughstuff’s sales at its large corporate resale partners)

5. CONSIDER CONSEQUENCES – Provide additional funding to large corporate resale partners = marginal overall productivity increases for Q4-05 OR provide additional funding to Roughstuff exclusive partners in Q4-05 = financial viability for the next 12-24 months with less probability to attain Q4-05’s targeted activations numbers.

6. CHOOSE – Provide additional funding to Roughstuff exclusive partners for Q4-05

7. MONITOR AND MODIFY - Roughstuff in Q4-05 concluded this period short of its customer acquisition objectives, but given the greater health experienced during 2005 as a whole will contribute its fair share to the RedRob Wireless financial objectives AND was able to secure the financial viability of its exclusive dealers.

Within the Roughstuff workplace we have over the years been driven by the Seven-Step to Better Decisions model, whether we realized it or not, but sometimes we did not fulfill financial aspects that should have been considered. Financial points that were not considered did include a lack of overall profitability of the organization through, focusing only on getting the next customer onto the network or providing the best value to the customer (relative to our competitors), and entering into a broad range of businesses (when at its core Roughstuff was a wireless company). This lack of inclusion of financial health into the Seven-Step to Better Decisions model f eventually led to a capital restructuring of Amp’d (Roughstuff’s previous name) through bankruptcy protection and the eventual purchase of Amp’d by RedRob Wireless.

Being morally or ethically orientated in a decision making process does not mean that you overlook financial viability or that every savings must be given to the customer. It is possible to service both the organization and customers, with all parties winning in the end.

RedRob Wireless, the organization which now owns the Roughstuff brand, appears to be orientated towards the Rational Decision-Making Model, as an army driven to ultimate corporate success of the RedRob brand in the USA. This is due to the hierarchical nature of the new organization of which Roughstuff is a part of and the need for greater bureaucracy, as the RedRob group of companies is fifteen times the size of Roughstuff. The net effect on Roughstuff, one can hope, is that the brand will become more financially accountable, but continue on with being ethically based in its decision making processes.

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