Questions and answers on Decision Making of an organization

It is a fact to keep in mind that decision making is one of the most critical elements of an organization regardless of its size. Every business organization has to make decisions keeping its strategy and objectives in view, and those decisions should be made after proper thought process and analysis so that a correct decision is made in the end. If an organization has everything at right place, they have identified their goals and objectives, they have well analyzed the competitive forces etc, but if they make wrong decision when it is time to take action, then failure would be the most likely result. An organization should clearly understand that what decisions they have to make at what point of time, and which decisions should be avoided in different circumstances. They need to collect relevant information and identify each option, which they can have while making any important decision. On the other hand, an organization should also understand that different decisions are made at different levels. The most common business decisions are made by managers in any organizations so they need to be aware of consequences of their decisions made for the business. A wrong decision can be fatal in so any ways (Quain, 2019). Plastic PackagingCompany was also facing a scenario, where they have to make few important decisions, and one wrong decision can really make things worse for them. The following analysis in the paper will look at different factors of the case that what decision was made, what could have been the alternative, and in the end, few recommendations will be made for Plastic Packaging.

 1. Identification Decision Making of an organization

(a) What are some of the main problems and related issues that you see within this scenario/case?

The downsizing strategy adopted by John, the President of the company looks to be a major issue here with the decision making process. It has been observed in so many cases that 50% decisions made by organizations do fail due to various reasons, so whatever an organization does; it should be proactive enough to avoid those failures or at least minimize their effect on the organization. According to Paul Nutt (2002), the organizations make decisions and spent money on those decisions, which have are not valuable for the organization at all, and most of the managers repeat this mistake several times. John has made the decision that things cannot be handled in financial terms, so the only option is to go for downsizing of the company. Apparently, the decision looks to be a considerable one, but when things will be analyzed rationally, it would be known that decision made by John is not an appropriate one. It is true that rational decision making does have both pros and cons, but process can be balanced in a way that only pros can be attained from the rational decisions(Heracleous, 1994)

 John has made an estimation based on his perception that downsizing is the only solution to decrease in demand made by the customers, whereas there can be many other issues, which may have played their part in decreasing the interest level of customers. For instance, there can be situation, where marketing efforts are not good enough to attract customers. So, John is certainly wrong in his perception and going with a wrong decision. He must understand the fact that a decision cannot be made on perception, rather logic and rational needed to make any viable decision. If John wants to assess the situation that why things are not moving in right directions, then he should go for a proper evaluation of the situation. He should identify that where things are going wrong, then a rational decision should be made accordingly, which has some logic behind. In difficult situations, the leader must stand encourage his subordinates and ask for help to grow collectively, buy John did the opposite by sending a wrong message to his employees, which has created more panic and confusion. He must look for rational decision as it can be beneficial in so many ways. A rational decision is based on some logic and data, which means that decision, would be successful more likely. In addition to that rational decision works step by step in a sequence so that things can be in order (Simon, 1979)

(b) Who are the relevant stakeholders involved in the given situation?

According to Schwartzman, Pinheiro, & Pillay (2015), an organization does have internal as well as external stakeholders and they both can effect or be affected by the decisions made by an organization. So, when an organization made any important business decision, they need to keep stakeholders in mind. In this situation of Plastic Packaging, there are two major stakeholders. The first major and most important stakeholder is employees, as they are being affected by this decision. The other major stakeholders are customers, as John thinks that their decrease in demand is asking for downsizing, which means that customers as external stakeholders making an effect on decision making.

2. Analysis Decision Making of an organization

(a) Evaluate the root causes and relevant factors (internal business environment) contributing to the main problems that you identified?

 It has been mentioned earlier that there are two root causes behind the problematic situation faced by the company. The first problem is the wrong decision made by John to go with downsizing and decrease the number of employees to deal with financial struggle. Moreover, the other major issue is the perception and wrong judgment of John, which is not based on any logic and creating lot of confusion as well as panic amongst company’s employees. These root causes are making the situation worse for the company and things are really going in wrong direction.

(b) Explain at least two causes using relevant management and OB concepts.

 The first major cause of the situation, which forced John to go with downsizing, is decrease in the consumer demand. But there was no thoroughevaluation made by the company to assert that consumer demand is the actual problem, and it needs to be dealt with downsizing. It is a fact that when decisions are made on the basis of logic and rational, they are more likely to get better assessment and results. It happens because when rational decisions are made, they not only backed up with logic, but they are also reviewed in a context of the situation, whichallowslooking at all relevant factors of the actual situation (Vlaev, 2018). So, it is crucial for John to assess the situation properly and identify the fact that why consumers’ demand has decreased with the passage of time. This is how a right decision-making approach can be adopted in next business processes.

 The leadership abilities of John also having big question mark in this situation, and major root cause. The leader stand firm in his/her approach and takes steps, which have encouragement and motivation as the biggest driving forces. But in this case, the situation is totally opposite as John has communicated the downsizing message to employees in a way that it is not only discouraging, but also creating a lot of panic as well as confusions in mind of the employees. They are not sure that what John is trying to achieve by doing so without having any concrete logic behind the decision. The leader’s role is that when company is going through tough times and situation is going nowhere, then leader must show his strong leadership abilities to motivate as well as encourage employees. A leader must remain his door open for discussion and suggestions so that employees’ feedback can be taken, and they feel that they are valued by their organization. The stress of a leader should not travel to the minds of employees; rather leaders should handle this stress and show strong character (Bhattcharyya, 2017)

3. Alternatives and Recommendations Decision Making of an organization

What could John have done differently?

There are so many things that John could have done with change of strategy, other than the strategy which he was going to apply in shape of downsizing. The actual problem is that consumer demand was decreasing and company is facing financial issues, so John thinks that cutting the number of employees will solve the problem. But he should have looked for some evaluation of the situation and identified the actual root cause behind decrease in consumer demand, because it would have helped him to look for the real problem and its appropriate solution without discouraging and confusing employees. He should have shown some problem solving skills to identify problem and comeup with the most appropriate solution (Huitt, 1992)

Generate alternatives Decision Making of an organization

 If John had taken the situation differently than what he actually did, then he would have been able to find considerable alternatives to the decision of downsizing. For instance, he could have identified that any department such as marketing department or quality department is not doing enough, which is decreasing demand of customers, so he could have introduced new policy and targets for these departments. Moreover, he could have looked at pricing strategywhether the product is getting beyond the reach of customers. If it was true, then he could come up with new pricing strategy, which comes with new promotions and benefits for the customers so that they may increase their interest in the product.These could have been more considerablealternatives in this given situation, but it also must be kept in mind that various other alternatives can also be found in the similar situation.

4. Action Plan Decision Making of an organization

 It is important for John to come up with great action plan, which not only deal with financial struggles, but also helps to increase demand of customers without doing any downsizing. So, here are few viable points of the recommended action plan:

·      The company should come up with new product line, which is based on innovative strategy and helps to differentiate from other products in the market

·    To get instant intention of the customers, John should ask his team to come up with a new promotion strategy, which attracts customers with more price discounts as well as benefits

·      John should ask his marketing team to instantly develop promotional activities on different channels so that customers attention can be grabbed as quickly as possible

·     John should also introduce a reward policy for employees on instant basis so that they may give their 100% in doing their tasks

      REFERENCES Decision Making of an organization