Observation Review of the Decision Made

NEWCASTLE BUSINESS SCHOOL

& LEARNING DEVELOPMENT

GSBS6001

ASSIGNMENT 1: OBSERVATION REVIEW OF THE

DECISION MADE

STUDENT NUMBER: 3172789

The Decision:

An immediate recruitment was to be done for the post of area sales supervisor for the specific area and the time allocated by the upper management was just a week. The area manager Patrick McDonald who was assigned for the responsibility for the recruitment is young and vibrant employee but does not have ample knowledge about the recruitment process. His nature of work is more individualistic rather than collectivism (Hofstede cultural dimensions). He has good knowledge and experienced in the field of marketing and has been in this field for past 3 - 4 years. It's been only 6 months that he has been appointed as the area manager in this company and he assumed that it's better to go for external recruitment process rather than internal.

Although the job was done within the stipulated time frame, there arouse several consequences of this decision that resulted in this outcome. Due to the new leader in the work place there arouse the communication gap between the new supervisor and the other employee which turned into the internal conflict in the work place. The newly appointed supervisor was not able to perform and contribute enough to the company as expected as he was unknown of the customers buying behavior of that particular area and also the conflicts going inside the workplace. The sales started taking downturn and the pressure was build through the upper management team to the lower staff members and due to this pressure the some of the other employees resigned from their job which resulted on high company expense for hiring and recruiting employees to fill up those spots. Since the lot of problems arouse due to that one decision, Patrick was forced to sack out the newly employed supervisor and the other employee of the company also got reluctant accepting the decision made by Patrick McDonald.

Analysis of the Decision:

The decision made by the McDonald can be consider as an explicit example of an individual acting with bounded rationality. The term bounded rationality was introduced by Simon in 1957 (as cited in Tolbert & Hall, 2008) in order to put forth the point that there is no such thing called rational human being and the decision they make are the combination of rational as well as non - rational which argues that the normative/rational models of decision making, which assume fully rational and objective judgment (Teale, Dispenza, Flynn & Currie, 2003), are unrealistic in nature. "50% of business decisions are made without formal process" quoted by Miller and Ireland (Mckee, 2010).

McDonald's judgement may have seemed appropriate to him under such circumstances like time frame constraints and upper management pressure, but it turned out to be the a bad move for the organization which storing(as citied in Tolbert & Hall, 2008) stated the subtle distinction about bounded rationality. Even though decision has to be made according to bounded rationality and was made accordingly, McDonald did not kept the bounded rationality model (Simon in Harrison , 1999) in mind while dealing with the situation which made him failure while taking and implementing the decision.

To some extent McDonald also went with his tacit knowledge that external recruitment might be more fruitful for the company rather than taking someone from inside the organization even though he was not as expert in this field. He was unaware of the knowledge that when you are given a short period of time, internal recruitment is far more applicable and beneficial for the company than external. McDonald was not able to study the personality types (Robbins & Judge, 2011), of the employees at the workplace due to which the communication got disturbed and internal conflict occurred when the new supervisor was appointed. As argued by Robert J. Aumann in his article "rationality and bounded rationality" that in bounded rationality also there must be some amount of rationality decision where in this case McDonald does not seem to be rational at any point. For example:

1. In such a short period of time he must have gone for internal recruitment which would have save time as well as company's cost.

2. Before entering the new member in the group, he should have check upon the personality types of the existing employee and the newly going to be supervisor.

3. He should have appointed someone who has good knowledge about that particular terrain and the customer's behavior and his sub ordinates if he has to be appointed as area supervisor of the company.

So while taking decision under bounded rationality also he should have consider some of these points in order to be clear about what type of employee should be appointed. He also assumed that new member in the workplace might bring some change or newness which might make working environment more interesting and vibrant. Even though its descriptive decision made, it did not seem to be practical for the organization. What McDonald have done, may be according to him it was the best that can be done for him under such constraints but it seems to be opposite when it comes to the organizations point of view as his decision was complete disaster.

So due to McDonald's individualistic working culture, the given constraints and not recognizing the available resources inside the organization, the decision that had been made proved to be a bad decision for the other employee and for the organization as a whole. The result might have been other way round if he had thought about working in a collectivism way and taking and sharing the feedback of his sub ordinates for making the decision which will help him to choose the best person to fit in for that position.

Reflection:

Under a condition of bounded rationality, if I happen to be in the position of the manager I would have taken by decision to go for an internal recruitment process rather than external recruitment.

This reflects the rational aspect of decision making under the bounded rationality