DECISION MAKING

HARRY SMART OR IS HE?

Harry Smart is a very bright and ambitious executive from Boston. He received
MBA graduation from Harvard and is now in his 7 th year with Brand
Corporation. Harry is married to Barbra who earned a law degree from Harvard
and has a position in a Boston law firm.

As a part of an expansion program the directors decided to build a new branch

plant for which Harry was selected as a manager by president. Harry explained
the ideal requirements of new plant to all its members and gave them 1 month
time to come with 3 choices of locations for the new plant. After a month, after
weighing all the variables and putting their maximum effort the members
selected the 3 preference places as Kanas city, Los Angeles and New York and
suggested that Kanas city was the best location for their new plant. When he
informed about this to his wife she was not at all willing to shift to Kanas city
and suggested she would consider relocating to New York. Hence harry made a
decision and decided to locate the new plant in New York.
DECISION MAKING:-Choices made among alternatives
developed from data perceived as relevant.

1. Did Harry Smart make a rational decision?

Related concepts:-

Behavioural style of decision-making

The social model:-It is viewed that humans as bundles of feelings,
emotions and instincts, with behaviour guided largely by their unconscious
desires. Social influences have significant impact on decision making
behaviour. This may cause managers to make irrational decisions.

Bounded rationality model:- Bounded rationality model is also rational

and maximizing, but bounded. Besides the economic market constrains, there
are many socially based obstacles that prevent maximization in practise and
this social barriers are not consciously recognized by the management decision
maker.

Participative decision making:-Participation has been shown in higher

productivity, decreased turnover, and increased job satisfaction.

Ans:-No ,Members suggested that Kanas city was the best location for their
new plant. But Harry did not make a rational decision and did not choose the
best alternative. He chose New York. Taking into account his wife’s view he
made a social and irrational decision. He did not make a decision which was
beneficial from company’s point of view.

Harry made a decision which was satisfying but not maximizing, which exhibits
bounded rationality .The socially based obstacle prevented harry from making
a rational decision. He did not make a decision which was organizationally
rational but the decision made was personally rational.

There was no participative decision making process either. Harry took his own
decision and dint take committee people’s view into account which would
ultimately dissatisfy the members of the committee. All the efforts and
dedication put forward by the member went in vain.

2. What model of behavioural decision making does this case support?

Related concepts:-

Behavioural style of decision-making

The social model:-It is viewed that humans as bundles of feelings,
emotions and instincts, with behaviour guided largely by their unconscious
desires. Social influences have significant impact on decision making
behaviour. This may cause managers to make irrational decisions.

Bounded rationality model:- Bounded rationality model is also rational

and maximizing, but bounded. Besides the economic market constrains, there
are many socially based obstacles that prevent maximization in practise and
this social barriers are not consciously recognized by the management decision
maker.

Participative decision making:-Participation has been shown in higher

productivity, decreased turnover, and increased job satisfaction.

Ans:-No ,Members suggested that Kanas city was the best location for their
new plant. But Harry did not make a rational decision and did not choose the
best alternative. He chose New York. Taking into account his wife’s view he
made a social and irrational decision. He did not make a decision which was
beneficial from company’s point of view.

Harry made a decision which was satisfying but not maximizing, which exhibits
bounded rationality .The socially based obstacle prevented harry from making
a rational decision. He did not make a decision which was organizationally
rational but the decision made was personally rational.

There was no participative decision making process either. Harry took his own
decision and dint take committee people’s view into account which would
ultimately dissatisfy the members of the committee. All the efforts and
dedication put forward by the member went in vain.
3. What decision technique that were discussed in the chapter could be used
by the committee to select the new plants site?

Related concepts:-

Participative decision technique:-Participation generally fosters a

sense of identification with the firm, a positive quality of working life, and
enhanced mental health as needs for autonomy, responsibilities, and material
well-being rare fulfilled. Participation has been shown in higher productivity,
decreased turnover, and increased job satisfaction. There are many negative
and positive attributes of the participative technique of decision making. Many
mangers ask for participation but whenever the subordinates take them up by
making the suggestion or tying to make some input in to the decision, they are
put down or never receive any feedback. In some cases managers try to get
their subordinates involved in the task but not in the decision making process.
This can lead to a boomerang effect regarding employee satisfaction.

Majority:-This is a case where the decision is taken which is supported by

majority.

Delphi technique:-It works as follows,

1. A group (usually experts or in some cases non experts may deliberately
be used) is formed, but, importantly, the members are not in face to
face interaction with one another. Thus, the expenses of bringing a
group together are eliminated.
2. Each member is asked to make anonymous prediction or input to the
problem decision the group is charged with.
3. Each member than receives composite feedback from what others have
inputted.
4. On the basis of the feedback, another round of anonymous inputs is
made. This iterations takes place for number of times till the composite
feedback remains the same, which means everyone sticks with his or her
position.

Thus helps in making effective decision.

The nominal group technique:-

The steps involved are:-

1. Silent generations of idea in writing.

2. Round-robin feedback from group members, who record each idea in a

tense phrase on a flip chart or blackboard.

3. Discussion of each recorded idea for clarification and evaluation.

4. Individual voting on priority ides, with the group decision being

mathematically through rank ordering or rating.