Mog Group Assignment "Management Decision Making-Social Model"

MoG group assignment “management decision making- social model”
BACKGROUND
Chester Barnard imported the term decision making for the first time from lexicon of public
administration into the business world (Harvard Business Review, 2017), which eventually
replaced the narrower descriptors such as “resource allocation” and “policy making”. Later
on theorists as James March, Herbert Simon, Henry Mintzberg laid the foundation for the
study of managerial decision making.
Decision making is a daily activity for human being and no one gets exemption from it. In
business organization decision making is a habit and day to day crucial activity which keeps
the business running. Present decision influences the future decision making, so it is critical
job in business for the success and failure of an organization. Managers are assigned with the
task of making decisions which routinely value and viability of firms, which makes managers
burdened of making optimal decision. The decision making process involves choosing one
course of action from a few possible alternatives. Effective and successful decision results in
profit while unsuccessful ones cause loss and creates problems.
Management team is responsible for making various decisions in organization, that is why
management is called decision maker. Management foresees the future circumstances on
taking particular decision in meeting organizational goals with fewest possible objectionable
consequences. For making decision, managers use different tools, techniques, model and
theories. Usually decision making is tough job where majority of corporate decisions involve
some level of dissatisfaction or conflict with another party. In a decision making process a
certain process cannot be followed completely neglecting other models because decision
making involves the discipline of sociology, psychology, mathematics, economics, political
science etc.
Managerial decision making process is the most famous technique in business world in
making strategic decision which involves eight steps;
 Identification of the purpose of the decision
 Information gathering
 Principles for judging the alternatives
 Brainstorm and analyse the different choices
 Evaluation of alternatives
 Select the best alternative
 Execute the decision
 Evaluate the results
Managerial decision making process help executive in making best possible strategic
decision, but the success of decision is determined by the decision quality and execution
effectiveness (Anon, 2017).
Factors that could influence the decision making involves past experience, cognitive biases,
escalation of commitment and sunk outcome, individual difference including age and
socioeconomic status, belief in personal relevance. Some of the model of decision making are
Economic rationality model, Social model, Simon’s bounded rationality model, Judgemental,
heuristics and biases model (Zeepedia.com, 2017)
Creativity is important factor that could alter the course of business. But creativity is not in
born talent, rather it is the outcome of social upbringing, which could significantly affect the
business decision. Creativity is the outcome of interactive process between co-workers and
team member (Agrell & Gustafson, 1994; Mumford & Gustafson, 1988, cited in Shalley &
Gilson, 2004), suggesting that social influence of others are important in shaping attitude and
decision making style.
The social model of decision making regards human as collection of feelings, emotions and
unconscious wishes which are reflected in their decision. Only economic benefit is not
observed in business decision making, it involves some ethical aspects, social feelings, i.e.
humanistic side. Psychological influence has significant influence in decision making and the
social model takes into account all these influences. The basis of social model of decision
making are the environment, peer pressure, experience, emotions and many other factors
(Zeepedia.com, 2017).
Social norms and values is the standard and acceptable way of making judgments, which
exerts considerable influence on the style of decision maker. Cultural upbringing, cultural
dimension has profound impact on decision making style of an individual. For example,
Japanese organizational system takes decisions in consensus with other while in America
decision making style is individualistic and involves the use of decision making models and
quantitative techniques (Management Study HQ, 2017).
Emotion is the reflection of social upbringing which has significant role in decision making.
For decades research has generalized that the managerial decision is the outcome of the
decision maker’s own positive or negative mood, which has later been argued that social
decision making research needs to focus on interpersonal effects like emotion of individual
on other’s behaviour, and lead to the development of Emotion as Social information model
(EASI) model (Van Kleef, De Dreu & Manstead, 2010).
The scientific study of social psychology began roughly in 1890. In 1918 Mary Parker Follett
made a passionate case for the value of conflict in achieving integrated solution titled Group
Organization – the solution of popular government, psychologist Kurt Lewin developed
influential “field theory” suggesting that social member with different perspective will act
together to achieve common goal (Harvard Business Review, 2017).
In an effect to understand the influence of social factor in decision making Solomon Asch
conducted an experiment known as Solomon Asch conformity experiment in 1958 which
concluded that the tendency to conformity in our society is so strong that reasonably
intelligent and well meaning young people are willing to call white black. This experiment is
landmark in understanding that human as social animal confirms issues undertaking opinion
of majority.
Ethical decision making is another model of decision making. In order to study the effect of
ethical consideration in decision making Stanley Milgram conducted an experiment called
Milgram experiment – Obedience to authority, which found out that ethical consideration is
not considered by decision maker’s while making decision in obeying authority. This
experiment gave evidence on how the mass slaughter in World War II was conducted on
obeying authority. Fred Luthan studied the influence of information generated from computer
versus information generated from typewriter and found out that decision maker with
previous experiences in computer relied less on information generated from computer than
the users without previous experiment (Luthans & Koester, 1976). In present day context,
computer based information are highly relied upon and made the companies successful.
REFERENCES
Anon, (2017). [online] Available at:

https://pdfs.semanticscholar.org/cb27/c01a46738b7b14769fc137292ffc2aef3b17.pdf
[Accessed 22 Sep. 2017].
Harvard Business Review. (2017). A Brief History of Decision Making. [online] Available
at: https://hbr.org/2006/01/a-brief-history-of-decision-making [Accessed 22 Sep. 2017].
Luthans, F. and Koester, R., 1976. The impact of computer generated information on the
choice activity of decision-makers. Academy of Management Journal, 19(2), pp.328-332.
Management Study HQ. (2017). Factors Affecting Decision-Making | Management Study

HQ. [online] Available at: http://www.managementstudyhq.com/factors-affecting-decision-
making.html [Accessed 22 Sep. 2017].
Shalley, C.E. and Gilson, L.L., 2004. What leaders need to know: A review of social and
contextual factors that can foster or hinder creativity. The leadership quarterly, 15(1), pp.33-
53.
Van Kleef, G.A., De Dreu, C.K. and Manstead, A.S., 2010. An interpersonal approach to
emotion in social decision making: The emotions as social information model. Advances in
experimental social psychology, 42, pp.45-96.
Zeepedia.com. (2017). DECISION MAKING:History Personal Rationality Social Model

Conceptual Organizational Psychology Social Sciences Psychology. [online] Available at:
http://www.zeepedia.com/read.php?
decision_making_history_personal_rationality_social_model_conceptual_organizational_psy
chology&b=93&c=29 [Accessed 22 Sep. 2017].

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MoG group assignment “management decision making- social model”

Anon, (2017). [online] Available at:

Management Study HQ. (2017). Factors Affecting Decision-Making | Management Study

Zeepedia.com. (2017). DECISION MAKING:History Personal Rationality Social Model

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