Organizational Learning and Decision Making

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Table of Contents

Introduction
Decision Making Models
Efficiency of the Model
Explorative and Exploitative Learning
Levels of Involvement
Knowledge Management System
Cognitive Structures and Biases
Conclusion
References

Introduction

This paper covers an organizational analysis focusing on organization’s decision-making process, learning methods and knowledge management systems. The cognitive structure and biases that affect the decision-making process is also analyzed.

The analysis took place with the organization’s director and SV supervisor, who participated in an interview. The interview was well organized and structured following the professional interview rules and regulations.

Organizational learning and decision-making are different aspects that complement each other and necessary for growth and competence of a company. For organizations to achieve the objectives that they desire, proper decision-making is essential. In most cases, decision-making becomes a difficulty because it involves multiple organizational divisions. This makes it have varied implications for every division.

Obtaining an agreement from all stakeholders is also a challenge. The organization’s overall support is always critical when the organization’s overall strategy relies on the support of all divisions. Because decision-making is strategic and crucial, together with the complexities associated with the process, there are various models that assist managers to aid in the decision making process.

Decision Making Models

A proficient decision-making process includes a series of steps that need contributions from different people, at different stages, as well as a feedback process. A good decision making model allows the decision maker to explore alternatives, review solutions, consider inputs and permits implementation and evaluation of the desired option.

In the rational models, the decision maker relies on cognitive processes, involving a sequence of steps. These models consist of five common steps including definition of the decision, identification of criteria for the process, consideration of possible solutions, calculations of the consequences associated with the proposed solutions and selecting the best option (Jennex, 2007).

The models under the rational model include Vroom-Jago model and bounded rational model. In this organization, the directors use an ideal decision making process with eight distinct processes. The first step is problem definition. The director or manager receives notification of an existing problem in the organization and investigates it, before declaring it a problem.

Once the director categorizes the issue as a true problem, he defines it by stating the nature of the problem, departments and publics affected and its perceived origin. The second step is determining the problem’s requirements that would later assist in formulating solutions. In this step, the manager considers the requirements that he needs to establish an ideal solution.

These include conducting a research or proposing discussions with the affected divisions. Once this is done, the manager informs those involved in the process, of goals that their solutions should accomplish. The following step identifies alternatives that enable them solve the issue.

After this, the manager, with the help of the decision making team develop a criteria relying on the goals that they had earlier set. In the sixth step, they select a tool for making the right decision, after which they apply the tool in selecting a decision (Picot, 2008).

Efficiency of the Model

The director claims that this model is remarkably efficient because it makes it possible for them to reflect on all possible options as well as comprehend future consequences of all solutions, by negating emotions in the process. The only disadvantage with it is that the decision maker’s cognitive abilities limit the outcome of the decision. In most cases, the decision maker’s memory and imagination affects the outcome of the decision.

In addition to this, model requires a lot of information and time in order to remain effective. The supervisor also argues that because their decision making process involves all departments and the appropriate publics. Because of this, the decisions that they make are always effective in problem solving.

By involving many people into the process, they usually gather superior facts and solutions. The process is also efficient in enhancing communication among participants hence preventing the possibility that employees would reject the decisions.

Explorative and Exploitative Learning

Organizational learning is a strategy that both the director and the SV president are passionate. This is because it is enables employees to work efficiently in order to improve productivity. Because of this, implementing change and decisions also becomes easy. Improving employees’ knowhow benefits the organization in various ways especially as a retention strategy.

The SV president emphasizes on exploitative learning rather than explorative learning. The organization provides specific and detailed information about tasks that it needs employees to learn. The director and managers break down these tasks into for ease of management and allocates resources for all the goals appropriately. This makes it easy for employees to learn faster hence improving their overall production.

The director provides explicit rules, which disciplines everyone involved in staying focused, utilize resources well and help maximize the prospective learning process. In addition to this, the director claims that the learning process enables them achieve a setting where employees adhere to rules, bringing improvements by structuring desire, trust and mutual understanding.

However, the director emphasizes the importance of explorative learning too. He claims that the organization can only grow and posse innovations through explorative learning. Because of this, the organization invests in explorative learning by encouraging employees to undertake research and take risks (Ferrell, Fraedrich & Ferrell, 2011).

Explorative learning encourages organizations to invest in training, employee exploration of options and variations. The director argues that although the organization emphasizes on exploitative learning, it also supports meaningful exploration, especially those that are feasible. Before the organization invests in explorative learning, it undertakes research on its feasibility, cost and need.

The director’s need to consider explorative learning stems from his knowledge of the dilemma in handling the relationship between explorative and exploitative learning. If an organization focuses on exploitative learning, it restricts experimentation and crush innovations, which are necessary for growth.

Without innovations and experimentation, the organization’s endurance is threatened. Conversely, emphasizing on explorative learning without exploitative learning becomes inefficient in enhancing productivity and growth. Because of this, the organization allows moderate exploration.

Levels of Involvement

Good leaders are always those who make concrete decisions and commit to ensuring that the decisions succeed. A key skill in leadership success is the ability to make effective decisions and ensure that the decisions are implemented. An essential way of ensuring that the decisions are successful is by acting and getting involved in the implementation process.

SV president understands that being an effective leader call for more than just being in control and giving orders. A leader must ask for input from different organizational divisions and stakeholders.

In addition to that, the director consents that leaders must be drawn in the decision-making procedure in order to create the impression of the decision’s importance to employees. When deciding on who gets involved in the decision making process, managers utilize five levels of involvements (Shapira, 2002).

In level one, the leader makes the decision independently. Most mangers use this level only in emergency cases when rush decisions are necessary. In this case, input is irrelevant as any delay may cost the organization heavily. In level two, the leader only seeks contribution from experts as they hold essential information regarding the organization.

Their contribution and involvement to the organization’s decisions is critical and thus, leaders must involve them to envelop blind spots, and augment their understanding of the issue. In the third level, leaders usually seek input from various sources, create a consensus towards a path, and permit the sources or group to make recommendations.

The leader must approve the recommendations before making them official. IN this level, the leader must possess substantial skills as using various sources yields overwhelming recommendations and solutions.

The fourth level requires the leader to direct responsibilities and authorities to other people. The person whom the leader appoints this responsibility reports the consequences of the resolution seeking process and the presumed solutions. In the fifth level, the leader entirely delegates the process to a committee.

The committee is responsible for processing all the decisions at hand and compromises positions awaiting everyone’s approval. During the process, committee leaders highlight the resources available as well as the constraints associated with possible solutions.

The leader must ensure that the committee adheres to the constraints. IN this organization, the director ensures that there is active participation and involvement from employees in all ranks and departments, by choosing representatives (Chawla & Renesch, 1995).

The employees can be challenged to participate by appealing to their emotional intelligence so that they obtain accurate perception of reality. Once they have molded their perceptions, it is easy for leaders to regulate the employee’s emotional response in a way that they successfully accept change.

The SV president responds that leader involvement, effective learning strategy and participation usually ensure that organizational change and implementation are successful. Because of this, his involvement strategy involves delegation with constraints, consensus seeking, gathering input from teams and making a decision, gathering input from individuals and making a decision, then making the final decision.

Using this process, the president can easily involve every practicable person and make an informed decision. He agrees that when there is substantial involvement, the level of support and ownership also becomes great.

Knowledge Management System

Knowledge management system is an information technology scheme that performs several tasks associated with an organization’s information and knowledge. These tasks include storing and retrieving knowledge, improving collaboration, locating knowledge sources, mining repositories for secreted knowledge, capturing and putting knowledge to use and enhancing knowledge management process.

This organization uses the following management systems; groupware systems, intranet and internet, decision support systems, document management systems, semantic tools and simulation tools. Other systems include social computing and taxonomy based systems. For organizations to obtain corporate knowledge, they must institute an effective software and technology as well as promote cultural transformations (Smith, 2005).

Cognitive Structures and Biases

Cognitive structures refer to the construction of the decision maker’s mind. On the other hand, cognitive biases refer to the distortions in the way the decision maker perceives reality. Cognitive biases refer to deviation patterns in judgment that occur in certain situations, leading to a distortion of perception, illogical interpretation and inaccurate judgment.

Sources of biases involve mental noises to the mind’s limited capacity of processing information. During the decision making process, it is necessary for leaders to avoid biases and ensure their mindset is stable and rational. The major cognitive biases are initial hypotheses focusing on targets, exposure to limited options, reliance on subjective judgments and illusion manageability.

Biases that affect an individual’s attention direct a leader’s attention to a stimulus, which influence all that has to be attended. Other biases affect an individual’s motivation hence influencing how the person makes the decision.

Conclusion

This organization’s success lies in its well structured decision making process as well as its comprehensive learning initiative. The director makes the major decisions with the help of managers, supervisors and divisional heads. The rational decision making process that the organization uses seems effective and efficient as it enables the leaders to make useful and valuable decisions.

Decision-making is closely related to organizational learning, which assists in ensuring growth, implementation of projects and obtaining support for decisions. The two learning methods for organizations include explorative and exploitative learning.

The type of learning that an organization undertakes lies on the organization’s power structure. It is necessary for leaders to ensure that the decisions that they have made are successful and effective. To do this, they must decide on the level of involvement that is necessary for the situation. These levels of involvement helps leaders decide on who is included in the process, and to what extent.

All organizations that understand the value of information and knowledge invests in a system that handles information access by using strategies to recognize, present, store and distribute information. Lastly, the paper has discussed cognitive structure and biases, which refer to the psychology of a decision maker as well as sources of distortion that hinder rational decision-making.

The categories of cognitive biases include prior hypotheses, exposure to limited options, reliance on subjective judgments and illusion manageability. The director and SV president undertook an interview, in which they provided relevant information regarding their organization’s decision-making process, learning method, knowledge management and how to conquer cognitive biases.

References

Chawla, S., & Renesch, J. (1995). Learning organizations: developing cultures for tomorrow’s workplace. Portland, Or.: Productivity Press.

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2011). Business ethics: ethical decision making and cases (8th ed.). Mason, OH: South-Western Cengage Learning.

Jennex, M. E. (2007). Knowledge management in modern organizations. Hershey, PA: Idea Group Pub..

Picot, A. (2008). Information, organization and management. London: Springer.

Shapira, Z. B. (2002). Organizational decision-making. Cambridge [u.a.: Cambridge Univ. Press.

Smith, P. J. (2005). Learning in Organizations. Hoboken: Taylor & Francis Ltd..

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