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12 views

Influences+on+Decision+Making

Uploaded by

njsmajun
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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This sheet is a handout material from Udemy course:

Organizational Behaviour
All rights reserved (Robert Barcik, [email protected]).

Influences on Decision Making


In this lecture, we will examine 2 aspects that shape decision-making processes: individual
differences and organizational constraints. These factors are crucial in understanding how
decisions are made within an organization.

1. Individual Differences in Decision Making

Let's explore individual differences in more detail:

● Personality Types:

Firstly, we have personality types. Different personality types influence how individuals
perceive challenges and opportunities, process information, and ultimately make decisions.
For instance, an individual with a risk-averse personality might prefer conservative
decisions, while a risk-taker might opt for bolder moves.

● Next, Emotional Intelligence (EI):

It plays a crucial role in decision making. Individuals with high emotional intelligence are
often better at understanding their emotions and the emotions of others, which can lead to
more empathetic and considerate decisions.

● Values and Beliefs:

Also, Personal values and belief systems guide individuals in choosing what they perceive
as 'right' or 'ethical' decisions. These values can sometimes lead to conflict when they clash
with those of the organization or other team members.

● Experience and Knowledge:

Next, the level of experience and knowledge an individual possesses can greatly influence
decision-making. Experienced individuals might make decisions quickly based on past
learnings, while those with specialized knowledge might focus on details pertinent to their
expertise.
● Culture:

And lastly, culture significantly shapes how individuals perceive problems and make
decisions. It influences factors like communication styles, attitudes towards risk and
uncertainty, time orientation, and the importance of individual vs. group interests. For
instance, individuals from cultures with high uncertainty avoidance may prefer decisions
that offer more stability and less risk. Similarly, cultures with a collective focus might
emphasize group consensus in decision making, as opposed to cultures with an
individualistic orientation where personal responsibility and autonomy in decisions are
valued.

2. Organizational Constraints on Decision Making

Now, let's shift our focus to the organizational constraints that shape decision making:

● Organizational Structure

The structure of an organization can either facilitate or hinder decision-making processes. In


a highly hierarchical organization, such as a traditional manufacturing firm, decisions may
need to pass through several layers of approval, which can slow down the process and
discourage innovative thinking. Conversely, in a flat organization like a tech startup, decision
making might be more agile and collaborative.

● Resource Limitations:

Next, limited resources, such as time, money, and personnel, can constrain the range of
available options and necessitate more pragmatic decision making. For instance, a
non-profit organization with limited funding might have to make tough decisions about
which projects to prioritize, often choosing those that align with their immediate funding
capabilities.

● Policies and Procedures:

Then we have Organizational policies and standard operating procedures can guide or limit
decision making. For example, a strict procurement policy might limit a manager's choices
for selecting a vendor.

● External Pressures:

Next, External pressures can include market trends, legal regulations, and economic
conditions. Organizations must often make decisions within the context of these external
constraints, which can significantly impact the choices available to them. For instance, an
automobile manufacturer might have to alter its production decisions based on new
environmental regulations that require lower emissions.

● Group Dynamics:

When decision making is a group process, the dynamics of the group, such as power
relations, conflicts, and communication patterns, can influence the outcome. For example,
groupthink, that we will cover later in this course, can lead to decisions that prioritize
consensus over critical evaluation. In a team with dominant personalities, other members
may feel pressured to agree with decisions, even if they have reservations.

● Time Pressure:

And finally, Time constraints that are built into certain systems or processes within the
organization, often lead to rushed or pressured decision making. Take as an example
traders and investment managers in the stock market who operate under intense time
pressure. Decisions about buying or selling stocks must often be made within seconds,
based on real-time market data, to capitalize on short-lived opportunities or to avoid
significant losses. This high-pressure environment can lead to quick decisions that may not
always be in line with long-term investment strategies.

In conclusion, decision making in organizations is influenced by a complex mix of individual


differences and organizational constraints. Understanding these influences is vital for
making informed, balanced, and effective decisions.

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