Leadership is an action or a process through which a person leads a group of people or a team in an organization. Leader and managers play an important role in organizational success or failure in the market. According to the research studies and academic literature, major roles and responsibilities of leadership and managers include communication of vision, planning towards goals achievement, the organization of resources, monitoring employee's performance and development of strategies and policies (Eagly & Johannesen-Schmidt, 2001).  Leaders and managers also motivate and inspire their employees and subordinates through different strategies and incentive policies to get work done in an efficient way and to enhance performance outcomes of their subordinates.

             According to Warren Bennis leadership is

“Leadership is the capacity to translate vision into reality”

Management effectiveness can be ensured in the organization through understanding others (employees and workers), understanding yourself (leader or manager) and adapting your style. But for this purpose, there is compulsory that leader understands what should be the right style that he has to adopt in his personality (Hollenbeck, Ellis, Humphrey, Garza, & Ilgen, 2011). Different leadership styles commonly adopted by the managers and leaders are transactional leadership style, transformational leadership style, and laissez-faire leadership style. Somehow, it is commonly said that transformational leadership styles and charismatic leadership styles both are relatively similar. 

            According to the research, effective leadership is necessary in order to make an organization success in the market. Effective leadership refers to passion, appropriate decision making, effective communication skills, honesty, empathy, and commitment. Leaders take decisions that their subordinates and followers follow up (Eagly & Johannesen-Schmidt, 2001). Effective leaders take right decisions at the right time and ensure success and accomplishment of goals. While opposite to them in-effective leaders fail to take the right decision and encourage an organization to face loss in the market. Decision making is a compression process that engages activities such as analysis, comparing, and selection of appropriate and most suitable solution (Hess & Bacigalupo, 2011). Decisions are taken with long term vision usually provide more benefits to the organizations as compared to the decision taken with short and limited vision.

            Considering the importance of long-term vision, it is said that an effective leader must have a broad vision and good foresight skills. In this essay, leadership and decision-making setting are discussed under scrutiny. Decision-making styles are highly dependent upon the personality and styles of leaders in an organization (Hollenbeck, Ellis, Humphrey, Garza, & Ilgen, 2011). How a leader perceives the different situation, how a leader handles that situation, his personal beliefs, emotional intelligence level, cognitive biases, and inherent personality all influence the decision-making process in different ways. Some of these causes to the influence the decision-making process in a negative way while other causes to support a leader take the right kind of decision. Somehow, the detailed analysis of all these is presented later in this essay (Lok & Crawford, 2004).

             Other than all these there are many other factors and reason that has an influence on the decision-making process. For instance, the decision context and purpose of the decision also influence the decision-making process of a leader (Eagly & Johannesen-Schmidt, 2001). The appropriate decision is essential for each organization in order to enhance productivity, profitability, social image, and operational improvement. But in some organization, appropriate decisions are also necessary because of human health and safety concerns. For instance, a leader working in the food manufacturing organization is highly responsive to take right decision by the quality of their products (Hollenbeck, Ellis, Humphrey, Garza, & Ilgen, 2011). Managers in these organizations are required to take decision appropriately about the selection of an ingredient, purchase of raw material, and safe packaging process with the purpose to deliver safe and high-quality food to their customers. In case of a wrong decision or negligence of the leaders, not only the company will lose its image in the market but customers will also suffer from health issues (Lok & Crawford, 2004).

               Similarly, in the oil and gas sector decisions has significant importance as it concerns with the employee’s safety and security (Hollenbeck, Ellis, Humphrey, Garza, & Ilgen, 2011). Oil and Gas sector contains such materials, and gasses that can be harmful for the human health particularly for the workers and employees who interact directly with these dangerous things on daily basis such as production line workers, refining area workers, and workers who deal with the carry and take away process of these products (Walumbwa, Wang, Wang, Schaubroeck, & Avolio, 2010).

             Even people dealing with the warehouse can also face an endangering situation in case of the wrong and inappropriate decision. In such a situation, leaders and managers working in these areas and corporate level of the organization are responsible to take the right decision for the safety of human being. A wrong decision taken by them can put human life in danger that is of course never desired by any organization (Hess & Bacigalupo, 2011). 

Decision Context and Purpose           

             While working in the oil and gas industry I took several decisions about employees and work-related activities. About a year ago I was asked by my manager to work on oil well construction project in the organization. My main responsibilities were to take the decision about manufacturing related activities. In other words, I was responsible to take all important decision for the oil well construction. The main purpose of this construction project was to produce more oil to meet market demand as currently working well were unable to deliver the required output. According to the plan this well was required to be constructed in the open background area of the previous plants. As an assistant project manager task was to monitor the construction site and resources (including human resources or man force, construction material, and time management) I was responsible to take the decision regarding design, the material used, and testing of the material. As an assistant project manager, I was required to stand at the working site.  

             During working on this project, I took a wrong decision that not only influenced the organizational performance and image but also put human life in danger. Basically, I took a wrong decision about the construction design and material use as a result of which we faced blow-out. Actually, it was my responsibility to discuss such design related work with my manager or head for the purpose of approval before making a decision about it. I believe a better decision could have been reached than actually was through evaluating the situation and collecting information about the appropriate design. But instead of all these I conducted very limited research on design and selected it with the approval of my head.

              As we both paid limited attention to the accuracy of design and appropriateness of raw material, therefore, the organization faced a big problem. The flawed and wrong design for the cement used to seal the bottom part of the well resulted in blow-out and blast. Thus, a single wrong decision taken by us caused the whole organization to face problems at each level. Basically, the purpose to discuss this decision context is to explain how a situation can become dangerous and how people at large scale suffer just because of a wrong decision taken by their leaders and managers.    

          In this case of flawed oil well design, wrong decision affected the overall image of the organization as more than 5 workers faced health issues. The blast caused injuries and skin burns. 5 workers working on the project site faced serious injuries and skin burns. Other than a health issue, the whole project team suffered as the organization faced a great loss. The major ramification of decision for an individual includes financial loss and work overload. While ramification for the organization includes reducing profitability, legal consequences, and influence on goodwill. While magnification for the team includes injuries and financial loss. 

Review of Key Theories of Leadership and Decision Making

               Literature is teemed with the theories of leadership in different perceptive. Some common theories about leadership include power and influence theories, contingency theory, trait theory, and behavioral theories. Power and influence theories are based on the French and Raven's five forms of power model (Hollenbeck, Ellis, Humphrey, Garza, & Ilgen, 2011). According to this theory leaders and managers working in the organizations influence other people, work activities, and decision-making process through the use of their power. According to this theory leaders consciously influence decision-making process (Walumbwa, Wang, Wang, Schaubroeck, & Avolio, 2010). Somehow, there are some factors that influence the decision-making process but unconsciously. For instance, un-conscious influences include emotions, cognitive biases, and personality.       

          Unconscious factors adversely affect the capabilities and qualities of leaders as a result of these leaders take wrong decisions. In this unconscious factor, personality factor includes personal perception, personal liking disliking, and habits that affect the decision-making process (Hollenbeck, Ellis, Humphrey, Garza, & Ilgen, 2011). Basically, theory represents that personality factor can influence the way how a leader takes information, process (compare, monitor, and evaluate) that information, and subsequently take the decision about how to act on this collected information (Walumbwa, Wang, Wang, Schaubroeck, & Avolio, 2010). Personality traits and personality type can also turn a right decision into wrong or vice versa. 

             Other than personality another unconscious factor is cognitive biases that influence the decisions of leaders. Basically, when leaders make decisions and judgments about the project or a specific task they like to think that they are logical, capable to think about all dimensions, objective, and evaluating all available information (Eagly & Johannesen-Schmidt, 2001). Unfortunately, sometimes because of this systematic error or cognitive biases leaders trip up, and take wrong decisions. Actually, cognitive biases influence when human brain collects minimum information and poorly evaluate information (Hess & Bacigalupo, 2011).

            Cognitive biases include stereotyping, intuition, anchoring, attentional bias, sunk cost effect, confirmation bias, disconfirmation bias, false- consensus error, absence bias, omission bias, fundamental attribution error, and halo effect (Hollenbeck, Ellis, Humphrey, Garza, & Ilgen, 2011). Stereotyping is a cognitive shortcut that refers to the generalization of a concept or idea on the basis of combining experiences and information collected from different available sources (without checking the accuracy of this information) (Lok & Crawford, 2004). According to the literature, cognitive biases are difficult to avoid. From the process of recruitment to the final evaluation all leading decisions of managers are manifested with the unconscious cognitive biases. As leaders and managers unconsciously get influence from cognitive biases while evaluating available information and as a result of this, they make wrong and poor decisions (Lok & Crawford, 2004).     

            A research study conducted by the Walumbwa and his fellows concluded that psychological factors influence the decision-making process of leaders and managers. According to the research, leaders take a decision through using their mind and cognitive domains that can be biased because of their personal feeling, inherent personality, and experiences (Hollenbeck, Ellis, Humphrey, Garza, & Ilgen, 2011). The psychological perspective of leadership is based on the study of three main psychological factors inherent personality, emotional intelligence, and cognitive biases. Research also discussed how mood and feelings influence decision-making process. For instance, a person may perceive a situation in a different way and make the different judgment in a happy mood as compared to the sad mood (Walumbwa, Wang, Wang, Schaubroeck, & Avolio, 2010). Personal skewness and tendency towards a specific outcome or desire can also influence the decisions of leaders and managers. But there are controllable factors that a person can control.     

            Third and most important unconscious factor (psychological factor) that influence the decisions is emotional intelligence (also known as EI or EQ). (Pinder, 2019) Emotional intelligence relates to the capability or quality of a person to recognize his/her emotions (about a situation or an event) and control emotions while leveraging emotions in an appropriate manner as solutions dictate (Keith, 2019). EI and EQ are also concerned with the ability of understanding emotions and feeling of other people. Research claim that a leader should have strong emotional intelligence to make the right decisions. The decision taken under the influence of emotions can be proved wrong and inappropriate (Eagly & Johannesen-Schmidt, 2001). Effective leaders avoid emotional influences and take decisions after fairly analyzing the whole situation.     

              True Emotional intelligence constitutes three skills. At first, it includes the skill of emotional awareness, or the capability of the leader to understand different emotions and moods with the name. Secondly, the emotionally intelligent leader has the ability to harness or control those emotions in tasks such as problem-solving and thinking (Hess & Bacigalupo, 2011). While the third skill is related to the capability or quality of managing emotions that also includes both the regulation of others and one’s own (leader) emotions in the right way (Keith, 2019). Leaders and managers who do not have strong emotional intelligence cannot understand their own emotions and other’s emotions as a result of this they take wrong decisions. Major examples of emotions are sad, fearful, happy, hostile, guilt, surprise, disgust, and anger.  Research claim that leaders need to identify their own emotions first then they can understand the emotions of other people. If a manager or leader is unable to understand his/her own emotions then there are more chances that he/she will also fail to understand the emotions of other people (Lok & Crawford, 2004).     

          In the above presented example (example about the construction of oil well in the organization), the decision was influenced by some unconscious factors particularly the psychological factors of cognitive biases and inherent personality (Walumbwa, Wang, Wang, Schaubroeck, & Avolio, 2010). Theories about cognitive biases and inherent personality are required to analyze to conclude the influential level of these psychological factors on the wrong decision taken about oil well project (Eagly & Johannesen-Schmidt, 2001).               

Dimensions of Decision making Leadership and Decision Making

           There are several theories available in the literature about decision making and effective leadership few of which are presented in the above stated paragraphs. Somehow, each theory deal with some specific dimensions (Lok & Crawford, 2004). Each theory does not have an influence on all dimensions of the decision. Similarly, in the example of oil well design failure decision was influenced by different kinds of factors that relate to different psychological theories (Hollenbeck, Ellis, Humphrey, Garza, & Ilgen, 2011). At first, while taking the decision about design limited information was collected and evaluated. In this example, emotional intelligence theory has deep relations with the wrong decision. Emotional intelligence concerns with emotions such as happy emotions, sad emotions, and angry (Hess & Bacigalupo, 2011). In this case lack of information about emotional intelligence motivated me to take the wrong decision by getting influence from my angry mood. During working at the project, I was feeling angry because of the overload of work and hot weather as a result of this I was thinking to complete that project as soon as possible. Therefore, I conducted limited research and approved the design that resulted in the blow-out.        

             While on the other hand, personality inherent also contributed to the wrong decision as an unconscious factor. My authoritative behavior and personal trait of never listing suggestions of other people also influenced this decision (Hess & Bacigalupo, 2011). While taking the decision about such an important thing I did not take suggestions of other civil engineers and architects working on the project. I took the decision by using my own brain and limited available information.

             Somehow, if we analyze the decision in regards to cognition then analysis will conclude that such a situation was raised because of cognitive biases. Some cognitive biases were influencing my decision that I ignored because of lack of knowledge about cognitive biases. Cognitive biases that contributed to influencing the well construction project decision are confirmation biases and recency biases. Confirmation biases refer to the biases that prevent a person from looking at the whole picture (Hess & Bacigalupo, 2011). While taking the decision about the design of oil well construction, the key focus was given to the time of completion. Project managers were concerned with the early completion of the project within the available resources to avoid an increase in cost. While focusing on these qualities and accuracy was ignored. In other words, as a decision taker, I only focused on one aspect and ignored the other important aspects, therefore, I took the wrong decision. Recency bias is also related to this. Recency bias represents the situation in which a person gives importance to a point more than other points as a result of this poor decisions influence overall outcomes and results.     

Suggest Theories Leadership and Decision Making

             The situation presented in the above example could be easily avoided in case manager or decision maker had knowledge about the factors that unconsciously influenced the decision. Somehow, it would not be wrong if we say that theories related to psychological factors influencing decision making process could support better solutions in such a situation. Actually, such a situation was raised because of the limited information about such psychological factors (that were unconsciously influencing the overall decision and its outcomes). Proper information about these factors can help me prevent such big loss and organization, team and individual could be kept safe from health issues and financial losses. (Hollenbeck, Ellis, Humphrey, Garza, & Ilgen, 2011). Basically, the literature review of such theories helps out the managers understand how their decision can be influenced by some factors in an unconscious manner. At the time of taking the decision, I was not familiar with such unconscious psychological factors influencing my decision, therefore, I was unable to control or avoid such influential factors (Pinder, 2019).

           Understanding about cognitive biases such as stereotyping, intuition, anchoring, attentional bias, sunk cost effect, confirmation bias, disconfirmation bias, and false- consensus error could help out the decision maker consider these factors and plan for avoidance in advance thus appropriate and right decision could be taken (Hollenbeck, Ellis, Humphrey, Garza, & Ilgen, 2011). Precautionary measures can be taken and a manager can make confirmation about the unavailability of these factors if the manager has knowledge about these factors and possible outcomes of these unconsciously influencing factors (Lok & Crawford, 2004). Therefore, here we can conclude that a better solution can be made in this situation through the use of knowledge presented by these psychological and behavioral theories.   

             A leader having emotional intelligence could definitely avoid such situation by controlling his emotions and feeling while taking the decision. According to the example decision maker was not an emotionally intelligent person or emotionally enough strong to understand the influence of his mood or emotion on his decision.         

Critical Reflection of Leadership and Decision Making

            According to my observation, my decision was quite wrong that encouraged many people working at the workplace to face ramifications of this decision. Basically, in current organizational systems, centralization of authority is quite common (Kelloway, Turner, Barling, & Loughlin, 2012). Leaders and managers having top hierarchical positions take the decision by using their own resources and information rather than getting suggestions from team members or their subordinates. According to my observation lower level and front line staff usually work directly on the project, therefore, they can sometimes provide a relatively better solution then the solution of the top management (Hollenbeck, Ellis, Humphrey, Garza, & Ilgen, 2011). But because of centralized authority system managers take decisions by themselves and never listen to their suggestions. As a result of this sometimes they ignore very important aspects that later resulted in the failure of a decision. Centralization of authority indirectly supports cognitive biases such as confirmation biases and recency biases and avoid a manager look the whole picture clearly and accurately (Haslam, Reicher, & Platow, 2010). Such limitations are quite unacceptable in the current organizational systems where competition is really high and a single mistake can turn the fortune of a company.

            In such a situation, leadership and decision-making theories have great important indeed. Such theories can bring improvement in the decision-making process of the managers and leaders. As because of these theories leaders and managers can understand what kind of factors can influence their decision and at what extent (Haslam, Reicher, & Platow, 2010). Thus, they can plan in advance. Somehow these theories are not enough for appropriate decision-making process. There are many factors that are not discussed in these theories but that factors have a direct or indirect influence on the decision-making process of leaders (Kelloway, Turner, Barling, & Loughlin, 2012). 

             Considering the whole situation and outcomes of the example the best solution was to learn these psychological theories. In my views leaders and managers should have training sessions to learn information about how they can avoid such unconscious factors and how they can make an effective decision (Hollenbeck, Ellis, Humphrey, Garza, & Ilgen, 2011). somehow, solution is not highly valid as only information about these factors is not enough in fact managers and leaders should have to take training to develop habit of taking effective decision by considering and evaluating all possible outcomes thus risk of poor decision can be avoided.

References of Leadership and Decision Making

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