Managerial decision making Essay Example | Topics and Well Written Essays - 1750 words

Managerial decision making - Essay Example A hallmark of today's business environment is its chaotic nature. This chaos is rooted in unprecedented rates of change and high levels of complexity. In turn, rapid change and effective decision-making create an environment of high risk in which decision makers possess little certainty about what the future holds. They perceive events through opaque lenses and base their decisions on large measures of speculation and only small doses of certainty. A large part of the complexity of today's projects is tied to the variety of options facing all project players, from project managers to team members to customers. Naturalistic decision making helps managers to understand how decision are made in complex situations, uncertainty and changing conditions.Research and understanding of naturalistic decision making helps organizations to interpret cognitive functions and improve their everyday performance. Following Cannon-Bowers et al 1996: "There is no doubt that the overriding strength of th e NDM perspective on decision making research is its focus on how decisions are made in complex, real-world environments" (p. 193). Managers do not always remember and thus learn from their mistakes, because they do not realize they have made mistakes. A naturalistic decision making gives managers means to disengage themselves from a particular situation, from its narrative, from one's roles, and from a dominating conceptual scheme. Effective application and understand of naturalistic decision making enables one to assess one's situation, to evaluate present and new possibilities, and to create decisions that are not parochially embedded in a restricted context or confined by a certain point of view. Naturalistic decision making takes into account ethical theory but not abstractly (Flin 1996). In complex environment, naturalistic decision making is crucial for organizational behavior and effective performance. This is because in the first instance ethics has to do with human relationships and human activities, not with abstract formal principles. It generates conclusions from that particular set of events, taking into account not merely the situation but its narrative and the set of mental models or conceptual schemes that frames these events. Naturalistic decision making and cognitive processes are essential to get one from a particular situation to a more disengaged perspective (Bazerman 1995). It is often argued that human beings are motivated primarily by self-interest; in business, managerial or corporate self-interest, sometimes even greed, accounts for questionable and even egregious behavior. Moreover, none of us is perfect, so in large companies there are bound to be errors of judgment. Other explanations also attempt to account for these events and their perpetra tors (Flin 1996). It is then sometimes argued that social, political, and legal institutions, along with the corporate culture and the particular roles and role responsibilities of the managers and companies in question, create a causal nexus that constrains what might consider morally appropriate behavior and often precludes the consequential avoidance of harm. In contrast to traditional decision-making, "Under naturalistic decision making a similar emphasis on task complexity has not been made explicit. In fact, attention to factors that contribute to decision complexity, and how decision makers cope with these, must be examined more fully if the definition of core NDM features is to be fully realized" (Cannon-Bowers et al 1996, p. 193). Following naturalistic decision making approach, organizations and managers understand that acting in one's own interest where one's well-being is the object as well as the subject of action does not necessarily exclude taking into account the interests of others, for those interests are almost always necessary to achieve success. Third, acting in one's own self interests in either sense is not necessarily evil. One must be careful to distinguish not only the quality of the action itself and