Dear Members,
On one of the WA groups of HR, Administrator of the groups has raised a topic for discussion. Today's topic is on Decision-making. He has asked the following questions:
Should decisions pertaining to organization and employees be taken arbitrarily or judiciously?
What would be the implications or benefits if decisions are taken arbitrarily?
I have given replies to the questions. These are as below:
Dear Rajaram,
The replies to your questions are as below:
Introduction: - Factors that limit the decision making process are as below:
a) Inadequate information
b) Time and constraints on amount of information that can be gathered.
c) Perception of decision makers about relative importance of data.
d) Human memory.
e) Calculating capacities associated with intelligence
Collective Reply: - While taking decisions, there is no scope of taking arbitrary decisions. But then is there any person who admits readily that his/her decision was arbitrary? Following questions distinguish between arbitrariness and judiciousness of a decision:
f) When the decision will be evaluated, how will it be evaluated when it will be evaluated, who will evaluate it and on what parameters will be evaluated. These are the most primary questions. Those who consider these questions, are the real leaders.
g) Whether Cost Benefit Analysis (CBA) was done before taking a decision? If yes, what were the parameters?
h) Whether the culture of evaluation exists in the company? In many organisations, leaders take just take decisions and then justify the decision. They do not maintain any records on the circumstances the decision was taken. This gives the room for evaluation. Sometimes the objectives of the decision are defined vaguely. This vagueness always benefits decision-maker to save his/her face.
i) If the decision involves financial investment then whether investment appraisal tools like IRR, ARR, NPV or PBP was used while taking decision? If in the past such tool was used then does the leadership does evaluation after certain years as to what was projected IRR and what is actual IRR?
j) Many times leadership show plain capriciousness. Scientific decision making is always a casualty with this kind of leadership.
k) There are various types of biases that impact the decision making process? Did leadership try making itself aware what are those biases and how to keep decision free from such biases?
Dinesh Divekar

From India, Bangalore

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This is in addition to what Mr.Dinesh has explained above. Decision making is a conscious process of taking a particular course of action purposely from among many alternatives in a given situation. Therefore arbitrary decision implies a negative connotation that such a decision is based on chance and not by reason. Organization being a human association striving collectively towards the achievement of a common goal, every decision taken by the Management has its own impact on all the stake holders while its impact is deeper on the employees of the organization because implementation of any decision rests on them only. If the decision is a judicious one taken with an over all perspective, even some inevitable negativities associated with it would eventually pale into insignificance. But when it is governed or characterized by sheer caprice, apart from a search in vain about benefits,if any, certainly such an arbitrary decision will not serve its purpose.
From India, Salem

Learned members have given nice answers to the question. My submission is very clear. The question itself gives the answer.
From India, Pune
Dear Elite mebers
There is nothing more to say in this regard as it is well concluded by our elited members with examples.
The defination of the two terminology speak which is best which is not [ Judiciously:- विवेकपूर्ण तरीके से ] & [Arbitrarily:-मनमाने ढंग से ]
A nice discussion to follow.

From India, Mumbai
The inputs provided by learned members on the subject will be guiding in nature.The social environment in which an organisation has to function itself provides a system of checks and balances over arbitrary decision making. For. ex. the welfare legislations like labour laws do not allow a company to take an arbitrary decision either with regard to terminating the service of an employee particularly of those in workmen cadre or denying benefits like leave or compensation or medical or other statutory benefits like PF and gratuity etc.
Further the presence of trade unions and the process of collective bargaining entail on managements the responsibility of including work men or their unions in the matters concerning their service conditions.
The compulsions of employer branding also compel organisations to take informed decisions considering it from all angles and to introduce the culture of consultation or bipartite dialogue in taking decisions on matters pertaining to employees.
HR & Labour Law Adviser
Navi Mumbai

From India, Mumbai

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