Lecture 8 Flashcards
Decision making plays a central role in management. The complexity of decision making increases with
the level of management.
Decision making by managers of multinationals is made under the following conditions:
Future plan is determined by the past knowledge of the managers, but no past knowledge can be adequate in defining the future.
Managers have to make decisions in foreign business environment where they have to deal with ambiguity and uncertainty.
The home-based managerial experience will not be transferable to foreign countries
These realities, therefore alerts managers to make decisions based on selected criteria and use them to evaluate alternative solution to particular problems.
Rational process in making decisions for multinational managers. Select criteria and use them to make
alternative solutions to a particular problem.
When selecting criteria, we need to consider
our past experience.
Remember, that the decision we make is usually based on
our subjective ‘rationality.’
Maximizing profit for us can be a rational decision, while maximizing __ will be a priority for others.
social well-being
Traditional decision-making process
Problem recognition
Information search
Construction of alternatives
Choice
Implementation
In the west, especially in the U.S., recognizing a problem and solving it as early as possible is a
rational action.
In other cultures, especially in non-western cultures, the managers might accept the problem as a natural phenomenon and living with it can be an acceptable norm.
natural phenomenon and living with it can be an acceptable norm.
For a problem solving manager, a delayed supply for a manufacturing company is not acceptable.
Hence, such manager will
work on a contingency plan. This will require to look for another supplier.
Both buyer and seller under such culture are expected control the situation by looking for alternative.
In non-western culture, it is not unusual for the manager to simply accept the situation and
delaying the project becomes a natural business practice.
Situation accepting manager attribute the problem to fate or to God.
In conclusion, it can be stated that managers perception of a situation varies across cultures.
Adler citing Quixote suggests that there are two models of gathering information by mangers:
Sensing
Intuition
Sensor managers believe in gathering information using
their “five senses.”
Sensor managers making decisions in the current and future business operation will rely on
the past information. They use inductive gathering information style.
Intuitive managers base their information on
image and are more deductive in the way they apply it for conducting business or reaching at a conclusion.
Future oriented cultures generate many __ alternatives.
new
Past oriented societies on the other hand, perceive changes in
past experiences.
Adler argues that one might suggest that it is necessary either to hire managers only from
the young generation or to train the older generation to accept change.
The best option of course is to train the existing manpower including young and old in order to
catch up with the changes and accept alternative solutions.
In North America choices are made
by an individual.
In countries such as Japan, decision of choices are made by
a group.
However, the universally accepted norm is that individuals or groups in their choices cannot afford to be
extremely global or local.
North European and the United States encourage individuals at ___ to make decisions. –bottom-up model
low level management
In developing countries such as India, it is assumed that low level management will
not make decisions without consulting their superiors.
Top-down model
In developing countries, senior managers are paid to __ __ for their subordinates.
make decisions
It is uncommon for an American (fast-paced) and an African (low-paced) management styles to
collide on decision making during joint venture or business negotiation which involves both parties.
North American and North European culture values reflect low risk avoidance, therefore individuals are not afraid to take risk. In short they will not be
penalized for the “wrong choice among the alternatives.”
In developing, countries societies are historically trained to be
high risk avoidance, therefore, they are not expected to make “wrong choices”. If they do, they may be penalized.
Countries such as Japan and China which have a holistic approach to business and need time to
discuss all alternative before making decision. Hence they need more time to decide to choose.
Societies can also be classified as
feelers and thinkers.
Thinkers always pose many questions to
evaluate whether the choice they make is the right one or not.
Whereas, feelers use ___ to make judgment.
their past experience
The implementation of a business plan varies from one culture to another culture:
Some cultures can be slow-paced
The environment on the ground can be disruptive
Ethical considerations can also slow decision making
The collapse of Enron and its unethical business practice have impacted the
pace of business implementation both locally and globally.
Global business tend to verify more on the ___ business practice than the local businesses. As a result, the implementation of decision in a global operation will take longer time.
“wrong” and “right”
