¶ … Wrong Moves" and analyzes the decision-making process of Nutrorim CEO Don Rifkin and his management team. The essay also makes recommendations regarding improvements, including changes to management styles and the use of decision tools.
Analysis of Key Issues
The key issues in the case involve deciding whether to recall ChargeUp after a health inspector made allegations that the drink was responsible for causing illness among 11 people. During the process of making this decision, other issues become apparent. CEO Don Rifkin had created a corporate climate that discouraged dissent and failed to optimally use his people's abilities. By trying to create a climate of inclusiveness, Rifkin has gone too far in the opposite direction and instead discourages his people's best efforts by stifling dissent and debate. Nutrorim's managers get bogged down in the decision-making process, with the result that they routinely make poor decisions, one after another.
Rifkin's management style was shaped fresh out of business school by an unfortunate incident with his former boss, a "dictatorial" CEO. The incident apparently traumatized Rifkin to the point that he put significant effort into making sure that he did not run Nutrorim in that fashion. Rifkin tried to develop a "happy, participatory, democratic culture," not realizing that such a management style would undercut his ability to be a successful leader. In the absence of conflict or challenges, Rifkin's inconsistent management style might be only slightly dysfunctional for day-to-day operations. But during times of crisis where difficult decisions needed to be analyzed, debated and resolved, Rifkin's approach was ineffective. He may have made a point of asking for input from as many people as possible, but he left his team with no clear, definitive process to optimize decision-making. By creating so much uncertainty, Rifkin set his team up for failure.
Even though the ChargeUp recall was the most urgent, in the long run the need to fix their broken system was also a high priority. As long as they used a decision-by-committee approach, with Rifkin making arbitrary decisions in private and "offline," Nutrorim was subjecting itself to a series of disappointing results. Rifkin's decision to recall ChargeUp was actually a valid decision, but his handling of it undermined his authority.
Investing in Dipensit was another example of Rifkin and Nutrorim's failed approach to making important decisions. Some members of Rifkin's team had misgivings about the purchase of Dipensit stock, but Rifkin neither personally undertook the necessary research, nor did he take seriously the reports of the subcommittee that he delegated the responsibility to.
From failing to perform their due diligence in investing decisions, to not gathering enough information about the proposed ChargeUp recall, to hiring an indecisive consultant, Nutrorim stumbled through one ineffective decision after another. Nutrorim needed to put in place a system where Rifkin and his team asked the right questions and created an environment of accountability and responsibility. In particular, Rifkin needed to ask the right questions of his people and help them develop improved problem-solving techniques.
Decision-Making Tools
Nutrorim needs to work with an organizational decision-making tool, for example, the rational model. This tool however does not work under real-world conditions where there is a lack of information and significant uncertainty. The rational model especially falls short with a management team like Nutrorim's, which can neither process all the information nor be objective enough in many cases to select the best solution.…
