Barriers To Effective Decision Making By A Manager In An Organization

Barriers To Effective Decision Making By A Manager In An Organization | Management Question Answer
A manager needs to make effective decision which is made by him by carefully following the Steps of Effective Decision-Making Process, but during that process he may face barriers / obstacles / difficulties which prevent him in making effective decisions. These are explained below:

1. Psychological Biases
2. Time Pressure
3. Social Realities

1. Psychological Biases

This occurs due to emotional biasness of a manager in making decisions. The manager focuses on subjective facts, which are based on personal’s emotional biases, rather than objective facts, which are based on rationality and reality.

Psychological biases may include the following:

(i) Illusion of Control

It is occurred when there is a belief that a person can influence and control the happening of an event, but in reality, he has no control over it. For example, if the manager is taking the high risks (e.g., made heavy investments) and believes that he can control their results, the he is making a bias decision as it is his own views but in reality, he can’t control the results of high risks and this may be resulted in the failure of business. So, he must take minimum and calculated risk in order to manage and run the business in a comfort zone.

(ii) Framing Effects

When a decision is presented or phrased in such a way that affects its shaping and framing. For example, the two statements “80% chance of success” and “20% chance of loss” presented to a manager affects his decision-making process as first statement encourages him to invest in a project and second statement may discourage him to invest as this includes a small figure “20”, besides the results of two statements are the same.

The manager may take the same decision due to the framing of similar past situation but in rationality, it is not the case. For example, he may decide to invest in the project as he did in the past for 10 years, but not considering the current and future aspects of the market i.e., the demand for such project is decreasing in the market currently and after 1 year, investing in such project will be a loss.

(iii) Discount The Future

It is occurred when people favor and prefer short-term costs and benefits over long-term costs and benefits. For example, to avoid cost of research & development, cost of purchasing new equipment, etc., give the short-term benefits but in the long-term, it costs to the business due to the lack of innovation and competitive advantage in the new market place as new technological improvements are required to meet market’s demands and hence the company loses long-term benefits i.e., decrease in sales, lose customers, facing difficulties to expand the business, etc.

2. Time Pressure

When the manager makes decisions under time pressure, then there is a need to make timely decision without losing quality, but he is in hurry to make quick decisions due to dynamic environment, so he don’t do analysis and resolve conflict & make decision without consensus. In this way, he may made mistakes which resulted in the poor performance of management.

In order to make timely and quality decisions, he should rely on daily reports, experts’ opinions. He should try to resolve the conflict occurred due to different opinions among team members in order to reach to a solution, otherwise, the final decision will be taken by executive.

3. Social Realities

In an organization, social interactions, bargaining, and politicking (an activity undertaken to acquire power and influence the manager for achieving personal goals) also affect effective decision-making process.

So, the decision made by a manager may be influenced by group interactions which is different from the one made by manager himself to achieve targeted organizational goals. He should make decisions without considering preferences and reactions of the people working in an organization.

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