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Decision Making

[Submitted by CA. Girish Borkar,
Mumbai, Maharashtra]

April 17, 2009

Taking (or not taking) decisions and being responsible for the consequences.

The topic for discussion today can apply in equal measure in one’s personal life as well as in the office. This topic is a management subject – I propose to briefly discuss how it affects management of personal relations as well as an individuals’ role in discharge of his/her responsibilities in office.

How many times have you thought or heard someone saying “I just can’t seem to take a decision?” We’ve all more or less been guilty of asking ourselves this type of question! When confronted as a result of a bad decision, it is typical to say “I didn’t think it was a big deal” or “I wasn’t thinking”. Unfortunately this practice of “not thinking” carries with it consequences, which could in some cases be quite unpleasant. Of course the truth is that whether you think about them or think them through, we CAN and DO make dozens of decisions daily. Everyone takes decisions on a daily basis, but these decisions fall in the realm of “routine” decisions, e.g. brushed my teeth, had a bath, made coffee, drove the car to office, filled gas, etc. These are all decisions which the mind keeps taking and the individual acting upon, and these decisions are taken unconsciously on a daily basis, thus making them mundane day to decisions. In certain cases, decisions taken routinely (say going out with friends) may evolve into situations that are more complicated and difficult to manage (e.g. the decision by the TISS female student to go partying with disastrous unwanted and un-thought of consequences). Complications may come from peer pressure, being under the influence, wanting to impress others, or any other number of extenuating circumstances that may present themselves in any given situation.

Whenever you take a decision which affects “you” or “your” near and dear ones, you probably weigh the pros and cons of such a decision. If you are an outgoing person you will probably end up sitting down with your family or friends to discuss the problem at hand and try to arrive at a decision which suits everybody. Once this decision is taken then the entire group taking the decision is jointly responsible for it and in such cases no blame game results. Subsequently with the passage of time the decision taken may prove to be correct – in which case no issues – but in some cases the decision may go horribly wrong, in such cases the group has no choice but to suffer the consequences and take steps to minimize resulting damage. These actions establish that the group is taking responsibility for its decisions to ensure that damage is minimized and life goes on, albeit a little more wisely for all! If “you” are a person who likes to take his/her own decision for the family or group of friends and “you” have established “your” credentials based on past track record – then the responsibility lies entirely with “you” for the welfare of “your” family or group – this is quite an onerous responsibility given that the individual taking the decision is responsible for its effect on those depending on him/her. Investment decisions form a major chunk of this category. Investment in stocks, real estate, etc are made by the individual using his/her knowledge and risk appetite and any gains or losses are the individuals alone. Thus the individual, has no choice but to stand by his/her decision – in the recent stock market collapse you would have read about the many suicides where people lost out big time and could not bear to face the consequences ending in taking their own lives.

Decisions taken as the managing director or CEO of a large organization are far more complex and need to be really thought through, as such decisions impact a whole lot of stake holders – from investors down to the lowest level employee in the organization. Decisions involve a 5-step process enabling wise and informed decision making. These are: a) Decision Opportunity, b) Analysis of the Opportunity, c) Brainstorm likely outcomes of the decision, d) Make the decision and e) Put the decision into action.
Each person goes through this process subconsciously every time he takes a decision. In companies you have the Board of Directors who discuss strategy and decide the path which an organization needs to take, and the same process goes down the hierarchy. Meetings are held and minuted to record decisions taken and suitable follow up action is required to ensure that the decisions are being effectively acted upon. Any organization where such processes involving decision making are not followed are likely to have not too desirable consequences, with few chances of remedial action based on available information. As each decision has consequences, “YOU” have to be responsible for the action and its resulting consequences. And what might some of those consequences be? Consequences of bad decisions result in loss of integrity, loss of respect, business losses, legal cases, bad publicity, etc. As the age old adage goes, “99% of our life is not what happens to us, but how we react to what happens to us”. If you intelligently analyze the alternatives and subsequent consequences of a decision, then you will make choices that are in your best interest. The bottom line here is that you’ll either make decisions and take responsibility for the outcomes, or you won’t. There is no “gray” area here.

Very often we do not want to take responsibility for the outcomes of a decision, no matter what those outcomes are. So what do we do? We don’t make a decision, which is actually making a decision anyway. This behavior is described as the “ostrich policy” – which comes from the behavior of the ostrich which buries its head in the sand when danger approaches, pretending that the problem does not exist. Why do you not take a decision? Because you are afraid of its consequences – but by not taking a decision are you safer or feel better. Remember safer is not equal to better. Not taking a decision may probably be worse than taking a decision the consequences of which, even though initially bad, can be remedied through analysis and remedial action. But not taking a decision shows fear and a negative attitude which really cannot be good for any organization. Unfortunately, the easiest thing to do is to blame somebody or something else when things don’t go as planned. How many people can look inward after a decision and honestly say to themselves “I screwed up”? Becoming a good decision maker also involves learning from your mistakes and the not-so-great decisions that you make from time to time. Remember life is the biggest school you go to – you live and learn every day. Just remember that you have to be responsible for every decision you make – accepting responsibility will make you a better person and a superior and more confident manager with every decision. Just ensure that you are honest with yourself about all your decisions and acceptance of responsibility, then only can you be honest to your subordinates and colleagues which would lead to gaining the love and respect of those who interact with you.

Reference : Personal Responsibility and Decision Making, The Moments of Truth
Created by: Shawn McGuirk, Director for Student Development & Conduct
Brandeis University

  

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