Deferring Decisions to Employees Would Have Been

¶ … deferring decisions to employees would have been appropriate. In some situations, the employee would have had greater expertise over the subject matter. In other situations, the employee should make the decision because the decision is not at a high enough strategic level to be made by the CEO. I believe that Skaug's method would also have been appropriate if he were taking over a hospital or investment firm. Employees in those firms have specialized training and the decisions that they are to make are based on that training. The CEO does not make investment recommendations or patient treatment decisions, so deferring those decisions to the relevant experts would have been the best strategy in those situations as well.

Skaug was deferring tactical level and operational decisions to his subordinates. He recognized the situation his company was in and acted accordingly to set up a culture where managers took initiative and made their own decisions rather than wait for the CEO to make the decision (Chapter 12). This is reasonable because his sole responsibility as CEO is to make strategic-level decisions. In this case, Skaug appeared to be leaving all of the decision-making process to his subordinates -- they had identified the problem and the alternatives. At best, Skaug would have acted as a consultant to clarify the alternatives or decision-making criteria but it appears that he wanted his subordinates to learn how to conduct the entire decision-making process, something that they were unaccustomed to doing.

c. If I was a manager under Skaug, I would have welcomed the opportunity to make more decisions. It appears that the corporate culture before Skaug was to defer decisions of all types to senior management, but that would have undermined by own abilities as a decision-maker. I would have enjoyed working under Skaug more than his predecessors. If I was Skaug, I would have done the same. I would have empowered the employees to make the decisions that they are trained to make. The CEO role is about making strategic decisions, contributing to tactical decisions and deferring entirely on operational decisions to the extent that they do not impact on the strategic decision-making.

d. There are a couple of pitfalls with deferring decisions. The first is that the managers may not have been ready for this level of responsibility. Many managers may have been attracted to the company specifically because they did not need to make decisions under the previous management team. As such, they may have been mentally unprepared -- or lacked sufficient knowledge -- to make decisions. This could have resulted in any number of decision flaws. Module 6 illustrates nine different biases that can influence decisions made by inexperienced managers. A common flaw for inexperienced decision makers would be to make decisions that meet the minimum of criteria (Chapter 11) -- most decision makers need experience in order to be patient with their decision-making. This could have resulted in a number of tactical and operational errors for the company during this learning process. The second major pitfall that could occur is that no decisions are made. This is not necessarily worse than if the wrong decisions are made, but could easily happen until managers become accustomed to making decisions.