C.E.O. as a Decision Maker
C.E.O. as a Decision Maker
Criteria for decision making
Once a decision maker has identified a problem, he or she is expected to select the right criteria that will help in reaching a solution. This involves looking at the most relevant aspect of the problem that will help him in the decision making process. At this level, the decision makers’ personal preferences, values, and interest come into play. It is necessary for the decision maker to select suitable criteria. This is because, an individual can think that the selected criteria are the relevant one yet, another may think that that criterion is not the appropriate one.
Though there are no wrong or right criteria to be used in the decision making process, there are certain criterion that are worse and others are better, and the useful and least useful ones. The main criteria that the decision maker can use are that; 1.) One needs to be sensitive concerning the alternatives. This will help in considering and comparing the alternatives. 2.) The practicability of the decision.
This means that the decision maker to generate a practical decision and one that can be assessed. The decision reached can be that which expert, models, and data judgment exists or one that can be readily developed in the same situation. 3.) The last criteria are that the decision reached should be understandable. This means that the trade-offs and consequences reached should be communicated and understood by all people concerned.
The decision maker has to be assured that the decision made is the best since the decisions forms the basic foundation of the business success. The cost of making poor decisions is unusually high especially for small business entrepreneurs. For instance, the decision leading to the selection of a wrong vendor contributes to lack of supplies delivers. This will adversely affect the success of the business. In times of high stake times, mangers can be in total despair not knowing the right step to take.
People usually make decisions at any given time, but a challenge in career making calls for deliberation and thought. The key considerations that one can take to ensure that he or she makes sound decisions are through the following steps. First is to consider what the experts say and to avoid rushing in to conclusions or making decisions when it is too late. The experts say concerning the problem will act as an alert that will make the decision maker aware of the dangers ahead, and the possible way of avoid them.
The second aspect the decision maker has to involve others, but, take ownership of the outcome. This means that when the manger consults others such as the subordinate staff members he or she will be exposing himself to new opinions and angles of reasoning. The information received from the subordinate staff will help the manager make an informed choice and gives himself a better shot of approval among those who the decisions will affect. The given opinions will further help the decision maker to be aware of the risks. Decisions, such as, hiring of a new manager, and strategic direction change within a group calls for the need to have a wide range of sources so that at the end, various needs of people will be accountable.
In most cases, the instincts that one experiences at first can be the right one, but may not be based on a rational way of thinking. The reasoning incurred has to be explained to others so as to help them understand. The decision maker has to remain open so that he or she can diligently challenge and advocate the initial assumptions made. This means that the first decision made can later be changed based on the newly found, data, evidence and information relating to the decision.
The manager making such a decision can be assisted by other people whom he trusts. Past experience can also teach one on the path to take in making the right decisions. However, should not be relied upon as the only source because, though the past and present challenges can share come similarities, certain aspects related to the situations of the problem do change.
Assumptions of decision making
Assumptions are the conditioning and mental habits that function as the same way of learning the everyday things. The learned things are practiced on daily routines and after some time our memories become preprogrammed to the learned activity. The programmed activity helps an individual because he or she will not take time to think about ant any given time he wants to do that activity.
An example is tying the shoes, which has become a repeated activity that does not require any intentionality or a considerable attention. Though assumptions can benefit an individual in saving time, assumptions sometimes result to negative and unexpected consequences (Cole, & Purdue Extension 2012).
People usually make assumptions to save them the time for active thinking concerning the daily challenging events and situations. Such events are part of our past experience, and since we solved the past challenges in a given criteria, the same criteria are used in all the following criteria without given them a critical thought. Assumptions work as time savers. It is up to when the assumption no longer work that we realize the negative effect of assuming things.
This applies just like the noise made by a turned on refrigerator. It is only until the noise stops that we realize the existence of that noise. One comes to evaluate his or her assumptions when they no longer work as per the initial plan. This makes one examine the gaps in the assumption and how they have worked. Often one will come to the discovery of a certain aspect that it was not considered or overlooked due to the invalid assumption that one operates with.
Assumptions can well fit in the field of business. The decisions reached based on invalid assumptions lead to negative and disastrous consequences. It is only until such results occur that we open our eyes to the invalid assumptions. The mistakes made by invalid assumptions are sometime irreversible, and this shows the utmost mistake that people commit through operating on assumptions.
Assumptions can lead to poor job performance in the workplace. Therefore, one should always be aware of the assumptions else he or she will continuously be making the same mistakes over and over again. One of the assumptions that I have seen in an organization I was working is that all the targets and goal set by the organization are easily achievable.
Every employee of this organization, including the managers, had the confidence that due to a clean history of business performance in the last one decade, they had the confidence that by the end of 2011, they will manage to increase their sales and revenue by more than 10%. Over the years, the firm has been based on the increase of revenues and sales each year.
This assumption made many marketers, employees, and managers to be resultant and to assume that all thing will work as planned. They assumed that, through the use of different components of the same Business Model, they will still manage to enjoy their sales and revenue. However, this was not the case, the competitors had come up with far better components of their business models that made them increase their production and improve on their production with the aim of offering high quality yet affordable goods. The organization did not succeed for it did not redesign its business model or change its goals; instead the business only employed its past components without considering the change in the business environment (Colin, & Reinhold 2006).
Accuracy of certain business assumptions
The invalid assumptions are those which are not realistic by nature and lack supporting evidence. For example, in a newly started business, it is wrong to assume that the business market will succeed by 2 to 3 % on a yearly basis. The lack of evidence measures the success of this business. Such an assumption can only work when the business at the peak of its success. Testing the accuracy of assumptions requires one to be skillful, well informed and should have the capacity to attain a set of goals. Invalid assumptions make business leaders move in circles without reaching the right solutions. They may not be aware of these mistakes, and end up wasting time and fail to poor performance of the company.
Invalid assumptions will hurt the performance of a business based on five main areas. These are in terms of the design, performance, goals, alignment, and strategies. Invalid assumptions lead to the inability of the company to attain its goals because employees will not feel motivated. This means that the assumption has to be tested to avoid making incorrect goals because they will not be motivational when these goals are not attainable.
The credibility of business assumptions can be tested by use of various models that provide necessary details concerning the company. This will help the company in selecting the best business models to use in shaping the goals, design, and strategies according to the pitch of the organization. The assumptions should be supported by recent and valid information. Further, the organization has to work closely with experts to provide guidance on the various aspects that affect a company. The use of valid assumptions will help the organization to be sustainable and successful in the industry.
References
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