Decision Making

Decision making is a process and unfold over a period of time (Kahneman, p. 76, 2013). There are two stages to decision making: problem identification or definition stage and the problem solution stage. The problem definition stage is discovering the gap between the actual state and the desired state. During this problem definition stage, there are numerous discussions and debates as to the problem(s) being addressed. The problem solution stage is the process of generating various solutions to the problem and then making the appropriate selection in order to solve the problem.

There are common mistakes often made during the decision making process. Often times during the problem definition stage, it may be easy to focus on the wrong goal when trying to decipher the problem. For instance, a quality problem can be misinterpreted as an employee issue when actually it could be related to the vendors. As a result, management may often rush for a solution instead of actually solving the problem. The action of thinking that the employees may be the problem of producing poor quality without even considering a vendor related issue demonstrates manager’s limitations within a bounded rational model. A good decision is overlooked because of decision biases in the cognitive processes of the manager. Limitations causes the manager not to look for disconfirming information. Continuing with the quality example, manages may ignore the fact take a vendor changed the production process in one of the products that they supply, which could generate a quality issue.

Another common mistakes of the problem definition stage is the overestimation and or the underestimation of the severity of a problem. Recently at work, managers made a decision to have managers present when loading and unloading and moving sections of the airplane. This was a kneejerk reaction decision to someone damaging an airplane section which resulted in repair cost and lost production time. The move...