Importance of Communication in Decision Making

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How does communication influence decision-making within a company? Is there any relationship? Find the answer here! This essay focuses on the role and importance of communication in decision-making process within a business.

Table of Contents

Executive Summary
Introduction
Decision Complexity
Problem-Solving Effectiveness
Research & Development
Conclusion
Recommendations
Reference List

Executive Summary

The report entails evaluation of the role of communication in making decisions within an organization. The correlation between decision making and communication is underscored in the background study. Some of the key roles of communication in decision making are identified. The importance of communication in identifying the complexity of the intended decision is underscored.

This arises from the fact that some of the decisions that a firm’s management team can make are more complex and can lead to enormous financial loss. Through communication, firms’ management teams are able to identify the involved complexity. The role of communication in solving problems within an organization is underscored.

This arises from the fact that problem solving entails effective identification of the problem which is attained via communication. Communication also aids in reducing employee resistance which might during the decision making process. This may result into conflicts within the organization.

Communication also aids in the process of a firm undertaking decisions regarding research and development which is vital for a firm’s success. Finally a conclusion of the entire study and a set of recommendations are made. The recommendations made entail some of the ways via which communication in an organization can be enhanced so as to improve decision making.

Introduction

Background to the study

In the process of executing their duties, managers are charged with a number of roles. Some of these roles relate to interpersonal roles, informational roles and decisional roles. The success of an organization is dependent on the effectiveness and efficiency with which the managers undertake their functions.

One of the most important roles which managers are supposed to undertake is making decisions to guide the organization’s operations. Decision making is paramount in the success of every business. According to Martinsons and Davison (2007, p.287) decision making should be fast considering the fact that opportunities have a short window.

Poole and Ahmed (2008, p.6) define decision making as the process of selecting from a number of alternatives based on a comprehensive analysis of the various options. Poole and Ahmed (2008, p.1) consider decision making to be a vital primary process in the operation of an organization. The decisions which the managers undertake are supposed to be independent.

In an organizational setting, there are a number of groups which help the organization in conducting various tasks. The basis of these groups may be the various departments. Despite the fact that managers should be independent in making decisions, consideration of the various groups is paramount.

There is a strong correlation between communication and decision making (Ellen & Almonte, 2009). Explicitly stated, communication has an influence on the decision made. Communication is defined as the dissemination of information from sender to the receiver. For communication to occur, information must be communicated via effective decoding by the receiver.

Communication in an organization can be viewed in a number of perspectives one of them being a medium via which group interaction in an organization occurs (Martinsons & Davison, 2007, p.287). Alternatively, communication can be considered to be the essence of decision making. This makes communication to be an essential element in the success of an organization.

Aim

The aim of the report is to analyze the importance of decision making in organizations

Scope

The report is organized into a number of sections. The first section entails evaluation of how communication aids firms’ management teams in the identification of complexity of the decision to be made. The role of communication in enhancing problem solving is identified in the second section.

The third section gives an evaluation of the role of communication in reducing resistance as a result of the decisions made. An analysis of the role of communication in enhancing research and development decision is conducted in the fifth section. Finally, a conclusion of the entire study and a set of recommendations are made.

Communication and Decision Making: Decision Complexity

In the operation of an organization, the management teams undertake various functions such as decision making. Lack of communication may limit the management teams’ capacity to make rational decisions. This arises from the complexity of the decision to be implemented.

In addition, the decision to be implemented may involve huge risks which might affect the firm’s operation as a going concern entity. This means that communication must be conducted prior to making any decision.

For example, considering the dynamic nature of business environment, it is paramount for firms to develop a high competitive advantage. There are various avenues via which this can be achieved. One of them is formation of mergers and acquisition. The core objective of formation of mergers and acquisition is to attain synergy in the new entity (Cartwright& Cooper, 2006).

However, there is a high probability of the new entity not attaining the intended synergy. One of the reasons which might result in this is lack of effective communication between the two firms involved. Undertaking a merger and acquisition requires incorporation of a comprehensive collaborative decision making.

This will ensure that all the parties involved have similar information regarding the impact of the decision on each firm. In addition, communication prior to implementation of the decision will aid in the determination of the existing degree of fitness between the two firms.

Ensuring prior communication prior to implementation of the decision will aid in minimizing chances of the merger failing (Cartwright& Cooper, 2006, p.65). This arises from the fact that it will be possible to determine the existence of goal congruency between the two firms. A considerable amount of resources are involved in the process of conducting a merger and acquisition.

If there is not sufficient communication, determination of the fit between the two firms may be hindered. Upon implementing such a decision, there is a high probability of the firm failing leading into enormous financial loss. Ensuring communication prior to undertaking such decision enables the firm’s management team in determine the most effective way through which the decision will be implemented.

Communication and Decision Making: Problem-Solving Effectiveness

In the operation of an organization, there is a probability of conflicts occurring amongst the employees. This arises from the existence of differences between employees. Inevitability of conflicts also arises from the fact that employees interact regularly in their duties (Coombs, 2010, p.340).

Conflicts may result into increase in the level of stress amongst the employees. This has the effect of reducing the employees’ productivity and hence the firm’s performance. It is the role of a firm’s management team to solve the conflicts amicably. This can only be attained via making an effective decision.

When a conflict exists in organizations, there is a high probability of it being suppressed. This worsens the situation by increasing the level of stress amongst the employees. Communication can help the management in understanding the nature of the conflict (Coombs, 2010, p.350). In addition, the degree of certainty regarding the problem is improved.

This arises from the fact that the management team is able to obtain numerous facts regarding the problem (Politi & Street, 2010). In order to solve the problem, a comprehensive decision making process should be undertaken. The first step entails identification of the existing problem.

Problem identification ensures that the decision made will result into a solution of the identified problem (Gibson, Ivancevich, Donnelly & Konopaske, 2009, p.36). At this stage, effective communication is paramount in helping the manager identify the problem. There is no need of the decision process progressing if the problem is not well identified.

There are a number of alternatives available to the management team in solving the problem. In order to identify the available alternatives, managers are required to gather sufficient amount of information. This will serve in increasing the validity of the decision made. According to Coombs (2010, p.360), conflicts within an organization may affect employees within various departments.

Various employees working in different departments have got different ways which they can consider most effective to solve the problem. By ensuring that there is an effective communication between the various groups, it is possible for the management to organize discussions so as to solicit the views of the employees.

Despite disagreements arising during the discussion, there is a high probability of the employees cooperating with the decision made since they were given an opportunity to express their views (Joanne, Dulek & Hale, 2007, p.68). The resultant effect communicating via group discussions when solving problems in an organization is that the quality of the decision made is high.

This increases the effectiveness with which the existing problem is solved. After identification of the various alternatives, the management team should evaluate the alternatives to consider the most effective to consider when making the decision. The model below gives an illustration of the decision making process in an organization.

An illustration of the decision making process in an organization

The dynamic nature of external environment has an effect on a firm’s operation and long-term survival. As a result, it has become vital for firms to undertake various changes on their operations so as to align themselves with the external environment.

Some of the changes to be undertaken are aimed at improving an organization’s operation efficiency. The intended change can either be major or minor. Despite the magnitude of the intended change, it might result into employee resistance.

In order to undertake the intended change, a number of decisions have to be made. The change resulting from the decision made by the management team affects the entire organization. Therefore, it is the responsibility of a firm’s management team to ensure that all the members of the various departments cooperate.

This makes the implementation process to be efficient by eliminating employee resistance (Richardson, 2008.p.2). The decision to make a change should not be imposed to the subordinate members of the organization.

It is important to ensure that all the employees are conversant with the decision to undertake the change prior to its implementation. In addition, the employees should be aware of how the decision to undertake the change will affect them.

This will increase their commitment in the process of implementing the decision. Therefore, ensuring effective communication within the organization will ensure that the firms’ management team understands the employees’ perception regarding the decision.

Communication and Decision Making: Research & Development

Considering the dynamic nature of business environment, conduction of research and development is vital if the firm is to survive as a going concern. The importance of research and development has further been enhanced by the current rate of globalization. This is mainly so for firms which are in very volatile economic sectors such as those which deal with software development.

Decisions relating to research and development may emanate internally or externally. According to Hirokawa and Marshall (2008, p.53), creating a rapport between the organization and the various parties involved via communication helps in identification of the necessary research and development. In addition, communication helps in the identification of the changes occurring in the business environment.

This arises from the fact that the organization is able to obtain market feedback via communication (Martinsons & Davison, 2007). The resultant effect is that the firm is able to undertake modifications to its research and development thus increasing the chances of attaining a high competitive advantage.

Conclusion

The success of every organization depends on the effectiveness of the decisions made by the firm’s management team. From the analysis, it is evident that the quality of decision made is dependent on the effectiveness of communication within the organization.

These sentiments are underscored by Aaron (2006, p. 32) who asserts that despite the vision statement that a firm has, lack of effective communication can result into failure in their attainment. The decisions to be implemented may affect the employees’ negatively thus limiting their productivity. Imposing a decision on the employees which they are not aware of may result into resistance.

Through effective organizational communication, the employees become aware of the decision prior to the change. This increases the probability of them cooperating during the implementation process. In addition, communication helps in effective decision making via identification of the existing problem. Problem identification is the first step in the decision making process within an organization.

Effective communication increases the degree of certainty with regard to the problem being solved. For example, the existing problem may relate to conflicts between the firm’s employees. Without effective identification of the problem, there is a high probability of the decision made not solving the existing problem. This means that the entire decision making process was a mere waste of time.

Through communication, it is possible for the management team to determine the complexity of the intended decision with regard to its effect on the employees. The management team may consider involving the employees in finding a more optimal solution by communicating the intended decision. The resultant effect is that the firm is able to identify the appropriateness of the decision via identification of various alternatives.

Recommendations

In order to ensure that the decision made is effective, it is paramount for firms’ management teams to enhance effective communication. In order to achieve this, firm’s management teams should consider the following recommendations.

There should be free flow of information within organizations. This will ensure that all the stakeholders are conversant with the organization’s internal environment. This will culminate into minimization of the probability of resistance occurring.

In order to achieve this, firm’s management team should consider incorporating a bottom-up organization style. This will ensure free flow of information from the employees in the subordinate level to the top management.

All the stakeholders to the decision should be involved. This will ensure that a sufficient level of awareness is created thus increasing the probability of participation during the implementation process.

In order to ensure effective communication within the organization, firms’ management team should incorporate information technology so as to effectively manage information flow within and without the organization.

Firms’ management teams should ensure that the organization has got an effective team dynamics. One of the ways through which this can be attained is by ensuring that there is effective communication within the organization. The resultant effect is that the degree of collaboration in decision making will be improved.

Reference List

Aaron, S. (2006). Effective communication helps business run more smoothly. Journal of management. Vol. 4, issue 5, pp. 23-34. Cambridge: Cambridge University Press.

Cartwright, S. & Cooper, C. (2006). Managing mergers, acquisitions and strategic alliances. New Jersey: Butterworth Heinnemann.

Coombs, T. (2010). Impact of past crises on current crisis communication: insight from situational crisis communication theory. Journal of business communication. Vol. 412, issue 4, pp. 390-419.

Ellen, M. & Almonte, R. (2009). Essential of business communication. New York: Cengage Learning.

Gibson, J. L., Ivancevich, J. M., Donnelly, J. H., & Konopaske, R. (2009). Organizations: Behavior, structure, processes. Boston, MA: McGraw-Hill.

Hirokawa, R. & Marshall, P. (2008). Communication and group decision making. New York: Sage.

Joanne, E., Dulek, R.E. & Hale, D. (2007). Crisis response communication challenges: building theory from qualitative data. Journal of Business communication. Vol. 41, issue 3, pp. 112-134.

Martinsons, M. & Davison, R. (2007). Strategic decision making and support systems: comparing American, Japanese and Chinese management. Journal of management. Vol. 43, issue 1, pp. 284-300. Amsterdam: Elsevier Communication.

Politi, M. & Street, R. (2010). The importance of communication in collaborative decision making: facilitating shared mind and the management of uncertainty. International journal of public health and policy. Vol. 3, issue 5, pp. 26-45. Washington: Blackwell Publishers.

Poole, M. & Ahmed, I. (2008). Decision making process in organizations. Journal of Communication Studies. Vol. 4, issue 3, pp. 45-54.

Richardson, J. (2008). Management of conflict in organizations: effective communication in conflict resolution. Journal of health. Washington: Bnet.

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