Decision Making

Decision-Making
Decision-making is an important feature of leadership and management in any sector. Various approaches to effective decision-making have been developed and discussed by researchers over the years. This paper will discuss the rational decision-making model, how individuals can deal with biases and errors in decision making, how individual differences and organizational constraints affect decision making, and what ethical considerations should be made in decision making.
The Rational decision-making model consists of a number of steps designed to enable the individual to make an efficient and effective decision based on evidence and logic. The first step in the model is to define the situation and the decision that has to be made. This means that individual must understand the issue and what is at stake by being able to answer what is the problem and what is the decision that has to be made? The second step consists of identifying the most important criteria for judging the outcome of the decision and whether it is right or not—i.e., the individual must be able to tell if the decision will be effective in terms of addressing the issue. The third step consists of identifying all possible solutions and options for addressing the problem. The fourth step is to make the actual calculations with respect to each option in order to see whether it would actually satisfy the criteria. The fifth step is to choose the option that is found by calculation to be likely to satisfy the criteria most effectively (Goll & Rasheed, 1997).
An example of the rational decision-making model in practice would be the issue related to Starbuck’s recent image problems regarding public use of its bathroom facilities. When two African-American men were arrested for loitering outside a Starbucks after being refused permission to use the bathroom since they had not purchased anything, Starbucks’ CEO made the decision to open all Starbucks’ bathrooms to the public regardless of whether the person was a paying customer or not. This was Starbucks’ attempt to address a problem directly rather than to simply apologize. Using the rational decision making model, the CEO would have first identified the problem, which in this case was not really related to bathroom policy but rather to escalation through fear in an incident that really never should have involved the police. There was a racial bias beneath the fear, which prompted the call to the police but had nothing to do with the bathroom policy which was based on the individuals not being paying customers. To change policy based on incorrect criteria showed that the CEO did not apply the rational decision making model to this problem. Instead, the CEO was attempting to correct for racial bias by opening bathrooms to all people so that such a mistake would not occur in the future—but this will have consequences as well as Conklin (2018) notes.
Biases and errors in decision making can stem from the fact that leaders might not follow the appropriate steps of a decision making model like the one described above. Instead, they will make decisions based on bias or on errors in their assessment of the issue and what is at stake. Bias has to be bracketed out by leaders whenever they are making a decision: this means they have to recognize prejudice in themselves and in others who might be acting under them. By identifying bias they can be better assured of removing it from the decision making process and allowing decisions to be based on facts, evidence, and calculations of what will best serve to satisfy the established criteria for what makes an effective decision on the specific issue (Johnston, Wallis, Oprescu & Gray, 2017). Establishing the right set of criteria will also help to reduce the risk of errors being made in the decision making process. Had the Starbucks CEO identified what the real issue was and used a set of criteria for what the most effective solution would achieve, he would have made a different decision than the one he did, which as Conklin (2018) shows is more akin to opening a Pandora’s Box of trouble than to making a good decision.
Individual differences and organizational constraints affect decision making, however, as the CEO has shown: people have personality, self-esteem, gender, race, age and ethnicity issues that make them unique but that also have to be recognized (just like bias) so that one is not making a decision on these variables but rather on what would be the best outcome for the situation. Organizational constraints likewise can affect decision making by handcuffing decision makers; for instance, if an organization will only permit a limited number of options in terms of addressing a situation, then a decision maker may not find it possible to apply an effective model like the rational decision making model to a problem. Organizational constraints can include accountability to stakeholders, public image, and stock performance issues.
Ethical considerations in decision making, still, are very important. As the case of the Starbucks CEO shows, the real issue was an ethical one—should managers call the police over a situation where all the facts are not obtained and should an unrelated policy be changed in order to assuage public outrage? Ethics should guide policy and decision making but they should not be misapplied. The ethical decision for Starbucks would have been to apologize; by changing its bathroom policy, it associates the police call and arrest of the two men as being related to the bathroom policy, which it really was not. Ethics means to be accountable and to act morally—and that implies acting honestly and truthfully. Decision-making has to be based on truth not on what appears to be politically correct or expedient at a given moment in time.

References
Conklin, A. (2018). Why the new Starbucks bathroom policy is a steaming cup of fail.
Retrieved from http://dailycaller.com/2018/05/15/starbucks-bathroom-policy-fail/
Goll, I., & Rasheed, A. M. (1997). Rational decision-making and firm performance: The
moderating role of environment. Strategic Management Journal, 18(7), 583-591.
Johnston, C. M., Wallis, M., Oprescu, F. I., & Gray, M. (2017). Methodological
considerations related to nurse researchers using their own experience of a phenomenon within phenomenology. Journal of Advanced Nursing, 73(3), 574-584.