Psychology-Decision Making Essay Example for Free

Psychology-Decision Making EssayAbstract How does it happen that managers take findings which running them to failures? What decision-making mechanisms do they inactivate when they take such decisions? This paper is aimed at analyzing these psychological implications.Psychology Decision Making Introduction It is not r ar that managers take decisions which subscribe to them to failure. These failures often become the headlines and the top stories of newspapers and magazines. However, has anyone analyzed the psychological implications of such decisions? What psychological theories could explain such managers behavior, and what useful recommendations could be drawn from such slicknesss? Problem credit The case of Sears, when owned by Edward S. Lampert, is the most recent example of a large managerial mistake, having led to signifi lott financial and economic losses. On January 29, 2008 Lampert pushed measuring to the fore his chief executive, but what is more important, h e took decision to distance himself from the day-to-day management of his endeavor. Until now, the heads of some(prenominal) major de cave inments, like marketing and merchandising, reported directly to Mr. Lampert, redden though he has no background in retailing or advertising (Barbaro, 2008). It is crucial to understand, how Lampert came to the idea of day-to-day management of his enterprise, although he did not squander enough professional skills for that Theoretical background It is stated, that we are likely, social constructed individuals. Our experiences, our cultures, our social aver, shape our motivations, our desires, and our beliefs about the world we encounter (Plous, 1993). Our management decisions are shaped are also shaped under the impact of business environment and the objectives we expect to meet in our management activity. We tend to take decisions, which are primary establish on our perception of the world around us (Connolly, 2000). One of the major problem s in management decision making is in that a person can hardly be objective in taking decisions. The lack of objectivity go alongs to the military position, when we do not take into account multiple environmental factors, impacting our decisions. Evidently, there cannot be any better explanation to Lamperts decision, that the self-perception theory. This theory deals with the human perceptions and the ways they incorporate their perceptions into their daily behavior (Plous, 1993). To be clear, Lamperts expectations and beliefs into his managerial skills and the ability to come with a large retail enterprise were not justified from the start. In this case, the major question to be answered was what am I to do to make this enterprise profitable? Trying to answer this question, and taking decisions in the discussed framework, Lampert has concluded that the best solution for the situation would be tying himself to the daily companys activity.Moreover, it was not enough for him to sta y ahead he had to manage, but this decision lacked theoretical and practical foundations. This is how Lamperts pseudo opinions impacted the overall performance of the company (Plous, 1993). Respondents are influenced by pseudo opinions when they do not know much about the issue or when they know nothing about it (Plous, 1993). In Lamperts case, ascription heuristics has greatly contributed into the negative decision outcomes Lampert was obviously justifying his behavior as situationally-produced. As a result, he has underestimated the lack of his managerial skills (Plous, 1993). Critical thinking is the integral part of the decision making process. Most global managers find it extremely challenging to evaluate a written or spoken commentary on a hot topic because both sides of the controversy seem to deal good arguments (Safi Burrell, 2007). Has Lamperts decision been caused by critical thinking approach? Definitely, it has for a prospicient period of time, Sears was criticized f or lacking a management team with retail experience and for Lamperts being a micromanager who hampered the business (Barbaro, 2008). As a result, Lampert was driven to the situation in which he had to admit his managerial mistakes due to the two facts the external criticism, and the objective financial data confirming the $14 million financial losses. Recommendations The case of Edward S. Lampert is a brilliant example of a situation, in which successful manager has overestimated his skills and has not applied any critical thinking approach before the decision was made. As a result, numerous pseudo opinions and the lack of objective information have led to significant gaps in the companys performance.In order to take a good decision, a manager must understand, what result is desirable and the tools available to us for making good decisions (Safi Burrell, 2007). There are several recommendations for a manager in similar situations. First, it is crucial that the manager avoids pseud o opinions. In this aspect, the wording of the question to answer is very important. In order to acquire effective decisions, managers must be able to formulate the questions.Properly wording the issue crucially impacts the effectiveness of the chosen answers, and as a result, the managerial activities which lead or do not lead to business success. Be honest with yourself about the agendas and motives. Are you really gathering information to help you make a smart choice, or are you just looking for evidence confirming your preconceived notions? (Safi Burrell, 2007).Not only objectivity and evaluation of ones skills have led Sears to failure. It is also the inability to properly formulate the goals of such actions what aims did Lampert have in his actions? Did he want to promote his enterprise profitability or himself as a successful manager? He had to answer those questions before he undertook any real actions which later almost pushed the company into the flow of negative consequ ences. determination In his decision to quit day-to-day management of Sears, Lampert has finally come to one of the crucial elements in the decision-making process he was able to recall the primal facts and decision-making variables. The list of these variables included financial indices and persistent criticism of Sears performance. As a result, Lampert was finally able to take the best decision possible in the questionable situation. However, it is still unclear whether hiring a new CEO was based on any objective grounds or would require thorough re-consideration in the hot future. One may hope that this re-consideration will not be caused by a new management decision-making failure.ReferencesBarbaro, M. (2008). Sears chairman will take a step back. The New York Times. RetrievedFebruary 1, 2008 from http//www.nytimes.com/2008/01/29/business/29sears.html?ref=businessqG4vaywTPkZypAwConnolly, T. (2000). Judgment and decision making An interdisciplinary reader. CambridgeUniversity Press.Plous, S. (1993). The Psychology of judgment and decision making. McGraw-Hill.Safi, A. Burrell, D.N. (2007). Developing advanced decision-making skills in internationalleaders and managers. Vikalpa, vol. 32, no. 3, pp. 1-8.