Management Decision Making
Part A
Introduction
In today’s organizations, the most important function is to acquire and retain its most essential assets; skilled and knowledgeable employees. Organizations understand that the right workforce gives them the competitive advantage. Because of this the competition for talented and skilled employees has become intense and is expected to become fiercer. In fact, many of the organizations are competing for talented and highly skilled employees at competitive price.
Members of the organization’s core groups are expected to perform multiple tasks and handle multiple duties as well as to maintain loyalty with the organization. Thus, organizations need employees who will not jump from company to company as needed and who would keep their bearings whenever necessary. However, this vision may be difficult to accomplish as the company is experiencing high turnover of its employees.
The perceived problem is the inability of the company to satisfy the employees’ need for better working conditions characterized by a competitive salary, better working hours and an environment that promotes the individual development of the employees. Like an organism, the employees need to satisfy such needs in order for it to survive in the same way that the company needs the employees for the continuance of its business.
Problem Statement
One of the major problems of the company is the high turnover ratio. This trend has undermined the capacity of the bank to increase its productivity and achieve its business strategies. While it can attract new employees through recruitment, such activity can become costly and time consuming. Also, the old employees’ mastery of the processes and function of the business is critical in effective performance. Hence, retaining these employees is a crucial factor for the bank. The main reason behind the transfer of employees to other banks is their attractive and competitive offers. In the company, employees are compelled to work long hours and do over time without any increase in their compensation. In fact, the salary of existing staff is relatively lower even if they are on the same level.
Dominant and Dependent Metaphors
According to and (1991) the world of management problem solving and systems thinking is divided in three principal routes: pragmatism, isolationism and imperialism (as cited in , 2002, ). The first of which concentrates on the practical solutions to the problem. Isolationism on the other hand, suggests that only one method based on single rationality is appropriate for all circumstances. In other words, it fits the problem to the solution rather than the solution fitting to the problem. Imperialism occurs when alternative methodologies are included into the preferred position of the user.
Like many organizations, the company is complex and the complexity of its problems is one which needs to be addressed. Complexity is a product of dynamism, the number of elements and the necessary rate of change for the organization and the environment. The use of system metaphors is useful as it enables the individuals to acquire descriptions of their circumstances without having to elaborate more. The use of such metaphor provides a systematic language which can be shared by the employees easily. Consequently, the particular metaphor must be linked to a set of methodologies. The selected methodology must be applicable to the company’s display of metaphorical characteristics.
Originally, the SoSM was used to inform the choice of methodology. This though has been recommended to be replaced by the complementarist framework. The first metaphor determines whether the key issue is design (technical), debate (practical) or disimprisonement (emancipation).The total system interventionist approach consisted of three phases of work: creativity, choice and implementation. The first phase asks questions in two ways. The best metaphor describes the current situation and the one which describes the desired situation. In the case of the company, the organismic metaphor can be used to describe the situation. This metaphor is derived from the recognition that individuals work more effectively if their social and psychological needs are catered for. This metaphor is useful since there is the need to be satisfied to promote survival.
Like the organism, the company needs to have efficient employees to survive and cope with the complexities of the business environment. Similarly, the employees have the need for competitive salaries and a better working condition. Both their needs must be satisfied to coexist and survive. In addition to this, the cultural metaphor can also be valuable to the pluralist nature of the participants/employees’ relationship. In a wider sense, the culture describes the various nebulous shared characteristics. This metaphor highlights the cohesion acquired from the shared social and organizational practices that can promote organizational development (, 1999, ). Such development is something that needed to be managed and takes time to be changed.
These metaphors are best suited for the current situation since they describe the company and the employees’ need to survive. In company’s perspective, the employees are the most active capital working towards the strategies of the business. Thus, the propensity of the employees to transfer to other banks threatens its survival. In the employees’ perspective, the satisfaction of their financial needs as well as the need for conducive working conditions determines their survival in the company. Unless these needs are satisfied, the trend of high turn over will continue and the company will find it difficult to mitigate its effects. Also, the cultural metaphor reflects the shared views and attitude of the employees towards the problem. The transfer to other banks in exchange for competitive offers manifests their commonality as to the perceived solution. The current problem can be classified according to the system’s complexity and the participant’s complexity. The System of Systems Methodologies provides a convenient mode to start a mixed mode modeling.
System Methodologies Based on Problem Contexts
UNITARY
PLURALIST
COERCIVE
SIMPLE
Operations Research
Systems Analysis
Systems Engineering
Systems Dynamics
Social Systems Design
Strategic Assumption
Surfacing and Testing
Critical Systems Heuristics
COMPLEX
Viable System Diagnosis
General System Theory
Socio-Technical
Systems Thinking
Contingency Theory
Interactive Planning
Soft Systems Methodology
?
Figure 1. System of Systems Methodologies
( and 1991)
The SoSM (Figure 1) is used as the basis for applying the methodologies by determining the problem to which they are applied. In this sense, the SoSM will serve as means to classify the problem through which the problem context is categorized according to the extent to which it exhibit complexity from unitary to coercive and a systems complexity from simple to complex.
The description of the system as ‘simple’ requires few elements, a low level of interaction, a high degree of determinacy and high degree of organization and regulation. Such condition is static and closed to environmental influences. On the other hand, a ‘complex’ system will have a large number of elements in a highly dynamic interaction. It exhibits probabilistic behavior and a lower level of apparent organization and is evolutionary.
Unitary, pluralist and coercive refer to the relationships between the actors in the system. A unitary view suggests shared interest, values and beliefs with general agreement about the ends and means and the actions that match the objectives. In a pluralist situation, the participants share the common interest but have different values and beliefs. They can compromise the ends and the means and will also act based on the objectives. Lastly, the coercive situation does not have a common interest with conflicting values and beliefs (, 2000, ). In this sense, compromise is not a viable option and the participants are coerced by others.
If the problem is seen as ‘simple-unitary’, there are few elements and interactions and the people involved agree on a single viewpoint. These kinds of problems do not require further discussion and can be resolved through hard, scientific and designed based methods. Conversely, a ‘complex coercive’ exhibits highly complex systems characteristics and cannot be resolved until the power issues that dominate the context are addressed (, 2001, ). However, the SoSM does not state how such can be applied leaving it to the individual methodology.
Having discussed the problem classification based on the SoSM, the problem of the company can be considered as complex-pluralist. The system is described as complex since it involve the participation of many elements. These elements are involved in a highly dynamic interaction. Also, the system is associated with lower degrees of organization and probabilistic behavior which is characteristic of a complex system.
On the other hand, participants’ relationship is described as unitary. The main problem is the low compensation and working hours. This leads to transfers to other banks that offer a more competitive salary. While they share the common problem and perhaps the common solution, they may not have the same beliefs and values. In other words, there is the possibility to compromise with the solution. For instance, some employees may agree on the compensation mode or salary increase but the others prefer a different mode. This means that employees have the same objective of gaining salary increase and better working condition but may have different attitudes and values on how these objectives can be achieved.
System Methodology-Interactive Planning
While SoSM can serve as the guide for the choice of the appropriate methodology, it does state how such method can be used. Thus, it is up for the company to choose the suitable method upon the classification of the problem. Based on the problem classification under the system of systems methodologies, it will be appropriate if the company utilizes Ackoff’s Interactive Planning. This methodology is primarily committed to the future. It focuses on what should be done now to create the future and not the future being independent of what is done now. The main aim of this method is to assist the participants of the organizations to design a desirable future and create ways on how it will be achieved. This reflects the main principle of Ackoff; plan or be planned for.
Interactive Planning builds on the idea that the obstruction to change lies on the minds of the participants rather than separately out there in the context of the problem. Obstructions are assumptions made by the participants. They are metal models that are lodged in the place. Ackoff dismissed the attempt to eliminate assumptions and instead advocated an idealized design of achieving it. Thus, Interactive planning is a method that leverages the ideas into practice. It is for of scenario building that offer guidelines to achieve intrinsic desires and shared vision. This methodology consists of five stages: (1) formulate the mess (2) ends planning (3) means planning (4) resource planning (5) design of implementation and control (, 1999, ). The original contribution of the interactive planning is on the first three stages.
Fist is the formulation of the mess. The notion of mess is a complex system of interacting problems. Formulating the mess help the people to get grip within the organizational mess and thus work out the future if nothing is done to address the present issues. This involves the synthesizing three types of study.
- Systems Analysis – formulating a detailed picture of the organization as it is at present in terms of structure, processes, culture and relationship with its environment. In this regard, the system of the company can be described as one which is complex. It involves the participation of many elements in a highly dynamic interaction. Also, the system is associated with lower degrees of organization and probabilistic behavior which is characteristic of a complex system.
- Obstruction Analysis – the existing obstruction to the corporate development is the high turn over of the employees. With this, the company losses its skilled workers that are supposed to serve the objectives of the company
- Preparation of reference projections – based on the system and obstruction analysis, the future performance of the company will depend on its ability to respond on critical employee issues. The failure to address employee problems with regard to salary and other working conditions will lead to the low level of loyalty and motivation
The second stage is the ends planning wherein the idealized design is located. Idealized design encourages the participants to design the organization they have today if they are free to choose the desired design. The design must be sustainable which means it must demonstrate a learning organization. It involves the selection of a mission the will generate commitment and direction. It also specifies the desired properties in terms of processes, structure and culture. Lastly, it moves these idealized properties to a detailed idealized design (, 1999, ).
At this stage, the company must involve the participants in designing the kind of organization they desire. This could include the improvement of the organizational culture and employee relations. Discussions can be made as to the existing problem perceived by the employees and alternately designing the organization in response to the impending issues. The employees’ involvement in planning the idealized design will not only motivate them but will also give them a sense of responsibility.
In the third stage, means planning, the reference scenario and the idealized design are compared while generating the strategies to close the existing gap. This process requires a high degree of creativity. The strategies must involve the purpose, resource requirements, ownership, time scale and measure of performance. With this, means planning moves into the next stages of resource planning and design of implementation and control.
The interactive planning offers many benefits to the learning organization. Participation generates motivation and commitment which unlocks the potential creativity. Interactivists believe that the future is affected by the activities of the organization and its stakeholders. Hence, what is needed to be done is to achieve their ideals. They change the system or the environment where the problem is embedded so that it simply disappears (, 2000, ). It is through the involvement of the stake holders that they come to understand the organization and the roles they have to play so that the goals are achieved. More so, interactive planning helps the participants to understand the social systems in which the organization operates. The focus revolves around allowing debates and drawing out consensus on which to act on the prevailing issues or problems.
The concern for participation surfaces in the notion of circular organization. This organization is a democratic hierarchy which is meant to cater for more active contributions of people co defining their involvement in the organization. It paves the way for the organizational members to operate the interactive planning. The main structural characteristic of the circular organization is the board. It is a body of people from the local area of the organization.
Figure 2. Circular Organization
(, 1999)
The circular arrangement overcomes some of the concerns at the traditional hierarchy such as bureaucracy. It improves the employees’ chances of participation and making rapid and meaningful contribution. This is consistent with ’s idea of a learning organization. It breaks the vertical thinking, thus, introducing more responsibility to the employees. It also increases the flexibility to respond with changes although much is still dependent on the extent of the organization’s rules. Among the numerous alternatives to organization design, the circular organization is advantageous since it complements traditional hierarchy that dominates most of the organizations today. It does not necessarily mean radical overhaul as required in the viable system model of (, 1999, ).
Another argument which is worth noting is that organizations must learn from its mistakes by detecting the errors of omission as well as errors of commission. Errors of commission are something which is done that should have not been done. Most companies especially bureaucracies only look for this type of error and punish those responsible for it. On the other hand, the errors of omission are something which is not done that should have been done. Although these kinds of errors are more disastrous, only few companies recognize them. It follows that if the management wants to minimize the possibility of being punished, then it is best to do nothing (, 2000, ).
Such error is evident in the case of the company, wherein the failure to respond to the employees’ needs can be considered an error of omission. The error has greater implication to the company because it is threatened with the lost of skilled employees that are critical to its functioning. Such mistake must be avoided if the company is to remain sustainable in the future. This can be done by reviewing and assessing the effectiveness of the existing policies. Unless such omission is corrected, the turnover rate will become higher. Although the company is able to recruit new employees, these replacements are likely to follow the same trend once they perceive the inadequacy of the company. Ultimately, the company will depend on continuous recruitment that is costly and does not guarantee loyalty and commitment.
Part B
Towards a Learning Organization
’s idea of the learning organization pertains to the creation of new types of organizations which are decentralized, non-hierarchical and committed not only to the organization’s success but also to the development of its members. Organizations that recognize the commitment of the people and their capacity to learn will succeed in the future. The philosophy is that learning must be a continuous and cooperative process. It is a kind of learning that facilitates discussion and dialogue (, 1999, ).
By dialogue, it means learning about the processes, those that support and undermine learning. Since the business environment is in a rapid pace, the there is the need to adapt to changes. Moreover, the learning process must be faster than the rate of change so that the company will develop the capacity to create new conditions, strategies and methods of solving present and future problems.
Like the Ackoff’s interactive planning, the concept of the learning organization is to promote a participative role among the employees. This would require their involvement in the process of learning and in transferring it across the organization. As the learning is disseminated, the company will be in better position to respond to problems. Employees are also given the opportunity to raise issues such as the need for salary adjustments and better working conditions. On the other hand, the company can discuss pertinent issues with the employees through dialogues and subsequently create the appropriate solutions to the problems.
The learning organization also encourages the shift of mind from seeing problems as caused by someone or something into seeing how actions create these problems. Clearly, the apparent disregard and the inaction of the company with regards to employees’ welfare is what cause them to transfer to other banks where they find added value. This action or lack of action on the part of the company is the main cause of the high turnover ratio. On the part of the employees, they also play a part in improving their conditions and creating their own realities. Instead of transferring to other banks, they must work out the problems with the company so that the desired results are achieved.
From this perspective, both the company and the employees must work collaboratively to promote the learning organization. This effort will lead to mutually satisfying benefits. The company will be able to develop ideas to improve its methods and processes. It will also strengthen the loyalty and commitment of the employees through their active participation, thus decreasing the high turn over ratio. Conversely, the employees’ learning and participation will result to their individual development and improved welfare.
However, these results will take time to materialize and the company must assist the employees throughout the process of learning and change. Most of the job will depend on the company and how it will encourage the employees to adapt a new culture of learning.
Suggestions for Improvement
Building upon the five disciplines suggested by , the company can improve dysfunctional areas and promote a learning organization that will enhance the overall performance of the company. The concept of the learning organization identified the five disciplines which together form the necessary ensemble for all the members of the organization: (1) Personal Mastery: clarifying the personal vision, connecting to organizational valued and the achieving self fulfillment (2) Building Shared Visions: expanding the collaborative abilities to set the future and promoting collective efforts to learn (3) Mental Models: bringing out and challenging the existing mental models to create new paradigms (4)Team Learning: building upon the ides of others and thinking together about insightful issues (5)Systems thinking: promoting systematic thinking patterns. It is a holistic view of the organization and integrates the five disciplines.
Taking from these disciplines, the company can create a new organization where the employees continuously expand their individual and collective capacity to achieve the desired results. One of the key issues that the company needs to address is the employees’ personal commitment to their work. In this regard, personal mastery plays a critical role.
- Personal Mastery
Personal mastery means developing the individual’s proficiency. It consists of processes whereby the person clarifies and deepens the personal vision, focuses effort on it, develops patience in seeking it and views reality objectively. Hence, it leads people to do things positively towards achieving their personal visions. Personal vision is the intrinsic desires and not the pursuit of a purpose. It is focusing energies on what the person want to do rather than what rather than what they do not want. As a result, the people are able to hold a sacred view of the work because work is now valued for itself rather than a chore that needs to be done. Also, people who achieve high levels of personal mastery become committed to their work and exude initiative (, 1999, ). They have a wider sense of responsibility towards their work and of great importance, learn faster.
Thus, promoting personal mastery is an effective way to strengthen commitment and with such, employees are less likely to transfer to other banks. Even so, personal mastery is not something which is forced to people. Rather it is an organizational strategy where in its importance is explained to the people. The company must engage the people in discussing their personal vision and its possible implications. This will help in shaping the implementation of the strategies. It must be clarified that the personal mastery is not a means of developing people towards organizational ends but rather an agreement between the people and the organization.
- Mental Models
Mental models influence the actions of people because they mold how people appreciate what they perceive. Thus, people are selective in their observations. Mental models define the person’s relationship with others and the environment where thy find their selves. The issue with these mental models is whether they exhibit routines in a person without them knowing it. They hold back the process of learning by limiting the vision thus leading to inertia for the individuals and the organization (, 1999, ).
The discipline of mental models aims to train people to appreciate that these models occupy their minds and shape their actions. As such, people need to determine models shaping their patterns of reasoning and thinking. In the case of the company, the mental models of the employees revolve around the inability of the company to satisfy their social and financial needs. This mental model is what causes them to act by moving to other companies. On the other hand, the company’s mental model is characterized by hierarchy in management. Thus, decisions are made based on bureaucratic politics. With this, a mental model with values and principles emphasizing merit and openness is needed.
However, in a learning organization, all the participants from the top management to the employees must test the accuracy of these mental models and ensure that each one of them is considered. Such skills will be institutionalized through practices that involve facilitative organizational structure. Reflection and inquiry are vital in the discipline of mental models. Systemic thinking can also help by testing whether these mental models are flawed in the sense that they reject critical feedbacks or delay or misses some points. It helps in exposing the assumptions made by the mental models and assesses the validity of such assumptions (, 1999, ). The goal is to better understand and improve the mental models of the environment.
- Shared Vision
While the personal vision pertains to the pictures a person carries, shared vision amounts to the pictures which the people throughout the organization carry. It is the vision in which people are committed to since it came out of and was created from their personal visions. Shared vision is the shared operating values, a common sense of purpose and a basic level of mutuality (, , 1999). It extends the insights form the personal mastery to collective and shared commitment.
The shared vision provides a focus and energy for the learning process. Such learning is generative rather than adaptive which means that the organization’s capacity is expanded to create its own future instead of that being created by events at present. Moreover, shared vision is an indispensable part of the learning organization. Risk taking and experimentation are also part of the shared vision. It also generates leaders with a sense of vision who communicate this so that the people are inspired to share and incorporate such ideas in their personal vision. The shared vision can be generated form the top or from the bottom level. Whichever way, it takes time before these visions emerged and shaped into how things are done.
The methods that will be used for the shared vision are created through dialogue between the people involved and those affected by the said dialogue. Hence, the process is developmental. The visioning can be moved from the top management hierarchy down to the lower level through dialogue from ‘telling’ to ‘co-creating’. By telling, those in the top believe that they know what the vision should be and thus it is followed by the whole organization. People merely follow and do what they are told either because they believe that the ones at the top management know what is bets or they don’t have other choice. In this regard, little generative learning is fostered. On the other hand, co-creating is a widespread and cooperative process where the shred vision is built under a generative learning (, 1999, ).
The spread of a shared vision through generative learning is explained as a reinforcing process by the systemic thinking. The communication of ideas makes the vision clearer which leads to increase in enthusiasm. However, there are also limiting factors in the process of dynamism. The increase involvement of people towards the creation of a shared vision may result to a break out of diversified views. Such condition can dissipate the focus and may even cause conflicts. Additionally, with their personal visions, people may see a gap between the shared vision and the way things are (, 1999, ). This is likely to give rise to negative feelings and the destruction of the shared vision. Further, the people may forget the connections they have to one another and that they are part of the whole system which moves the approach into a joint inquiry into individuals in conflict.
Visions, whether they may be personal or shared, result to a degree of commitment. As emphasized by both disciplines, such commitment is associated with a broader sense of responsibility towards work. By creating a personal vision, the employees will view their work differently, thus allotting more of their energies towards achieving their intrinsic desires. Similarly, the shared vision generates commitment in a broader sense. Having these kinds of vision will be helpful in maintaining the loyalty of the employees and strengthening their commitment to their job.
- Team Learning
The last discipline which is equally reinforcing as the first ones is team learning. The main objective of which is to align the thoughts and energies of people within the organization. The common direction creates resonance in such a way that the team will attain more than the sum of its members. If there is no such direction, employees are likely to work towards the satisfaction of their individual needs. In which case, the inability to meet these needs by the organization will cause them to look for other alternatives such as the one experienced by the company at present.
Moreover, if the people are not aligned, then the values of a learning organization such as empowerment may increase conflict. As a result the team will achieve less than the sum of its members if they are to work individually. For the team learning to become successful, the team members must balance between the practice of discussion and dialogue. Discussion is where the different views are presented so that the best view is generated to support the decisions to be made. Dialogue suspends the views of the members in such a way that the listener explores the mental models of other team members (, 1999, ).With this, people can make genuine attempt to appreciate issues of concern in the eyes of other people who raise the concerns. People will also learn as their understanding towards the prevailing issues is expanded.
References
Books
Internet Sources
0 comments:
Post a Comment