Is Decision-Making a Natural Talent or a Skill You Can Develop Over Time?

Dear Members, On one of the WA groups of HRs, the Administrator of the group, Mr. Rajaram Thorve, has raised the topic for discussion on Decision-making Process. He has raised the following questions for discussion:

Q. 1 Is it true that decision-making is not everybody's cup of tea?

Reply: While decision-making is everybody’s cup of tea, making the right decisions is not everyone’s cup of tea. The difference between managers and non-managers is the decision-making power that vests with the managers. Managers who are not empowered to take decisions just carry the designation of manager. Factors that limit the decision-making process are as follows:
a) Inadequate information
b) Time and constraints on the amount of information that can be gathered
c) Perception of decision-makers about the relative importance of data
d) Human memory
e) Calculating capacities associated with intelligence

Q. 2 Is it not a gut feeling to take a decision, however wrong it may be, as pitfalls, if any, may be rectified later on to solve the problem of the organization?

Reply: Managerial decision-making is a scientific process. Those who prefer to give short shrift to this process or those who do not know how to take scientific decisions rely on their gut feeling. The decision-making process is as follows:
Step No 1: Recognizing the problem or opportunity
Step No 2: Exploring/Diagnosing the problem or opportunity
Step No 3: Developing alternative solutions to problems considering all options
Step No 4: Measuring and comparing the consequences of alternative solutions for selecting the best solution. At the same time, deciding parameters of which decision is to be evaluated
Step No 5: Implementing the Decision
Step No 6: Evaluation of the effectiveness of the decision

Q. 3 Is it true that only ethical Managers/Leaders can take a better stand and decision under critical situations of the organization?

Reply: There is nothing like managers/leaders are ethical. However, they should take ethical decisions. If the decisions meet the standards of ethics, then many times it is possible to avoid critical situations. However, it is the duty of the top management to create a culture of ethics or values. This is far easier said than done.

Q. 4 Is decision-making an inborn skill or developed by an individual over a period of time?

Reply: Inborn or otherwise, decision-making skills can be learned. The Rational Decision Making Model is one of the prominent decision-making models that every manager must master.

Final comments: I conduct a training program on “Effective Decision-making Skills.” In my training program, I conduct a simulation that brings out mental blocks that impede the decision-making process of a manager. The program has been proven effective, and members can benefit from this program. You may click on the hyperlink to know the details of the program.

Thanks,
Dinesh Divekar

Is decision making not everybody's cup of tea?

Firstly, to make decisions, one must be thorough with the subject matter, effects of the decision, circumstances, etc. Making decisions is possible for everyone, but the point is whether the decision is informed or not.

Is decision-making based on gut feeling?

Making decisions based on gut feelings may prove right at times, but decision-making is a far more complex and interconnected matter. Your decision will unleash a set of changes. Are you aware of the impact of the decision on all stakeholders? Have you thought of the ways to put the decision into effect?

Can only ethical managers make better decisions?

Ethical leadership is badly needed for an organization to thrive. Just think why the Tatas and TVS group are doing so well and are fully trusted in the market. Their ethical and legal conduct sets them apart. Ethical decisions are good, but in real life, ethical managers are always under pressure from lobbies and interested groups. In the long run, ethical leadership will produce the best results, but in the short run, focusing on and sticking to ethics may bring short-term issues. Ethics may prevent a leader from managing a contract, but others may manage their ethics better and secure the contract/order.

Is decision-making an inborn skill or developed over time?

Decision-making: the act or process of deciding something, especially with a group of people. Everyone can and does make decisions in their daily lives and fields of work. Learning, knowledge, and experience give decision-making an effective edge. Inborn skills can include sharp intelligence, observational powers, etc.; they help decision-making, but a skilled decision-maker operates on knowledge of the process, environment, time management, timeliness, and a deeper insight into the issue on which the decision is to be made. My personal suggestion would be to make decisions systematically, follow a logical and ordered process of obtaining information, issues, linked issues, stakeholders, options, and then make the best decision possible.

Thank you for providing additional insights on the subject. When making business decisions or choices in personal life, making decisions based on assumptions can be a significant drawback.

Ratan Tata's Observation

Notably, Mr. Ratan Tata once observed a family of four riding on a 2-wheeler. This led him to contemplate why not manufacture a cost-effective vehicle that would cater to the needs of lower middle-class families. Subsequently, the Rs 1 Lakh (or US$ 2,500) car Tata Nano was launched.

Market Assumptions vs. Reality

However, as the project progressed, the actual market conditions differed from initial assumptions. There was a lack of demand from the lower-income segments for whom the car was designed. On the contrary, it was perceived as a novelty by higher-income groups, leading them to acquire it as an additional, often luxury, vehicle. Consequently, the project is now on the verge of being discontinued.

Assumptions in Personal Relationships

In social contexts, misunderstandings and conflicts in marriages often stem from assumptions about the partner. Once these assumptions are debunked post-marriage, they can be quite unsettling. While some individuals endure these discrepancies, others find it intolerable and opt to end their marital relationships. In India, navigating this phase can be one of the most distressing periods in one's life.

Thank you,
Dinesh Divekar

The Impact of Assumptions in Decision-Making

Dinesh has given apt examples of decisions made on assumptions leading to problems. The example of Tata's Nano car reminds me of the advice given by a tutor on a Management Skills course. He said, "Never assume; because a wrong assumption leads to making an ASS out of YOU and ME." He had spelled the word assume as "ASS U ME."

Many times, even company directors make decisions to buy other companies way above their market rate due to ego problems, leading to the collapse of the market value or even going into liquidation.