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Running head: DECISION-MAKING

Decision-Making MGMT 645 - Organizational Development & Culture March 17, 2014

DECISION-MAKING Abstract

This paper describes a detailed report of the decision-making processes used at XYZ Company. Along with extensive research, XYZ Company' decision-making processes will be examined, and information will be provided on the effectiveness of the processes within the organization.

Decision-Making Processes at XYZ Company

DECISION-MAKING Managers at XYZ Company leads their respective teams by executing decisions. The quality and effectiveness of the decision-making processes determine the success of the

organization. XYZ Company' managers are continuously expected to make decisions in order to solve problems within their areas of responsibilities. The decision-making processes at XYZ Company consist of the evaluation of problems or situations, consideration of alternatives, choosing an alternative, and action follow-up to determine effectiveness. Every manager has a different approach on how they make decisions in their respective areas. According to behavioral specialist, Isabel Briggs Myers, "A person's decision making process depends to a significant degree on their cognitive style" (Myers, 1962). According to David Ingram, the managerial decision-making process consists of six steps. Those steps consist of 1) Identifying the problem or opportunity; 2) Choosing the best decision process; 3) Discover and develop possible choices; 4) Selection of the choices with the greatest value; 5) Implementation of the selected choice; and 6) Evaluation of the selected choice (Ingram, 2014). XYZ Company has many areas of responsibilities needing decision-making processes to take place on a regular basis. Decisions within the organization are made at many levels depending on the issue or problem. Financial Decisions Financial decisions at XYZ Company are primarily made by the President/CEO, who is also the sole owner of the organization. He makes all the final decisions regarding capital structure and all capital expenditures. The President/CEO does utilize other resources within the organization to help him make important decisions regarding capital expenditures and employee salaries. When it comes to making decisions regarding capital expenditures, the organization's President/CEO consults business unit and department managers to aid in the decision-making process. For decisions regarding capital expenditures in the quality department, he consults the

DECISION-MAKING

organization's Quality Manager. For decisions regarding capital expenditures in the engineering department, he consults the Engineering Manager. For decisions regarding capital equipment expenditures to be used in the company's operations, he consults the organizations Operations Manager and Plant Manager. In some instances, it may be necessary for the President/CEO to consult more than one manager because the capital expenditure may be utilized by more than one area of responsibility. Also, other department managers, such as the Manager of Information Technologies and the Maintenance Manager may be consulted on the decision if there is additional information required from a technical standpoint. An example of a cross-departmental capital expenditure decision was the purchase of a Portable CMM Laser Scanner. This purchase was to benefit both the engineering and quality departments, so there were many people involved in the decision-making process. The President/CEO called a meeting involving the Engineering Manager, Quality Manager, Operations Manager, Manager of Information Technologies, and three of the organization's Computer Aided Design (CAD) Engineers who would be using the equipment. Three separate laser equipment vendors were brought in to pitch their products and show the individual qualities and capabilities of their equipment. Upon completion of the presentations, each member of the organized team provided input regarding which piece of equipment they preferred and the reasons for their choice. The President/CEO took in regard all the team's input and purchased the laser scanner that was best for the organization. Decisions regarding compensation, bonuses, and other employee benefits are made by the President/CEO, in conjunction with the Human Resource Manager and, at times, other management staff. The Human Resource Manager maintains all the records regarding employee relations and is helpful in the decision-making process in this area. XYZ Company is a nonunion at-will employer, so the President/CEO has full control over the compensation and benefits of its employees.

DECISION-MAKING Operations Decisions

Decisions regarding XYZ Company' operations are made by the Operations Manager, in conjunction with the Plant Manager and other members of XYZ Company' management staff. Depending on the extent of the problem or situation, the Operations Manager may have to make instantaneous decisions without consulting anyone else within the organization. Regardless of whether the decision is made solely by the Operations Manager, or if it is made in conjunction with other management staff, communication of the decision must be made to the President/CEO. This decision-making process, even though it is communicated thoroughly, does not seem to be effective. Engineering Decisions Decisions regarding engineering problems or issues are made by the Engineering Manager, in conjunction with the Quality Manager and other members of XYZ Company' management staff. Many of the decisions within the engineering department are difficult to make at times because most of the engineering principles and specifications are dictated by industry standards. So, in a way, the company is handcuffed by how much they can go 'out-of-the-box' when making decisions. As is the case of the Operations decision-making process, the decisionmaking process used in the engineering department does not seem to be very effective. Quality System Decisions XYZ Company' quality management system is certified to ISO 9001, along with many other international standards. When making decisions regarding problems or issues regarding the quality management system are dictated by the ISO standards. There are product and process problems and issues that arise, which need to have decisions regarding resolution. When these types of problems or issues arise, the Quality Manager, in conjunction with other members of XYZ Company' management staff make the necessary decisions. Decisions made within the

DECISION-MAKING quality department seem to be effective because the department runs very efficiently and has successful growth within the organization. Environmental Health & Safety Decisions The Quality Manager is also the organization's Environmental Health and Safety (EHS)

Manager. Decisions regarding EHS are made by the Quality Manager, in conjunction with other members of XYZ Company' management staff. As is with other areas of responsibilities, the company's EHS is based on local, state and national standards required and mandated by agencies, including MIOSHA, Michigan DEQ, Federal EPA, and DEA. There are decisions made internally regarding safety procedures, and are made in a team decision making session. XYZ Company has a 'Safety Team' comprised of the Quality Manager, one member from the engineering and customer service departments, and six hourly production employees. All decisions regarding safety concerns are from suggestions by other employees or by problems found during monthly safety audits performed by the 'Safety Team.' The use of a 'Safety Team' to make decisions regarding plant and employee safety has been a very effective decision-making process. According to the Chartered Management Institute, "Teams are particularly good for dealing with complex and challenging tasks. This is because teamwork provides an opportunity for combining the skills and knowledge of each of the members. One team member may come up with a more efficient method of tackling a challenge that the other members had not thought of" (Belbin, 2014). Any decisions regarding Environmental and/or Regulatory issues are made by the Quality Manager, and immediately communicated to the President/CEO. These types of decisions are made by a single individual within the organization due to the importance and delicacy of the issues in this area of responsibility. XYZ Company partners with an outside environmental consulting firm to help in its Environmental and Regulatory compliancy. The consulting firm gives advice towards certain decision-making scenarios within this area of responsibility and

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provide advice to the organization to make more informed business decisions. According to Don Hofstrand, Iowa State University specialist, "The role of a consultant is to supplement your knowledge so you can make better, more informed decisions" (Hofstrand, 2009). A consultant helps to improve the decisions made by XYZ Company' management, and thus makes this practice an effective decision-making tool.

References

DECISION-MAKING

Belbin, M. (2014). Using teamwork to build a better workplace. Chartered Management Institute. Retrieved March 22, 2014, from http://businesscasestudies.co.uk/cmi/usingteamwork-to-build-a-better-workplace/team-decision-making.html#axzz2wq4Dv3fs Hofstrand, D. (2009). Considerations when selecting a consultant: role of a consultant. Iowa State University. Retrieved March 21, 2014, from http://www.extension.iastate.edu/agdm/wholefarm/html/c5-60.html Ingram, D. (2014). What are the steps in the decision-making process of a manager? Small Business Chronicle: Demand Media. Retrieved March 18, 2014, from http://smallbusiness.chron.com/steps-decisionmaking-process-manager-10601.html McShane, S. L., Von Glinow, M. A. (2013). Organizational Behavior Emerging Knowledge. (6th ed.). New York, NY: McGraw-Hill Irwin. Myers, I. (1962). Introduction to type: A description of the theory and applications of the MyersBriggs type indicator, Consulting Psychologists Press, Palo Alto Ca., 1962.

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