OWP liVe REPORT

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The levels of decision-making

So, taking the example of a new product, a wise manager looks beyond the pros and cons of the product itself to explore the following levels that might influence his or her decision.

A wise manager sees all the levels

These five levels – individual, group, product, division, and corporate – are distinct, yet all may influence what seems to be a simple and straightforward decision. Wise managers are aware of these different layers and levels, and can consider them in a holistic manner. “What may seem like a simple decision often has many layers and levels, and you should be aware of them all,” he said. “A skilled manager ought to be able to be familiar with, and reflect on, these other levels.”

The individual

The divison

Be aware of the factors that shape your own thinking. The way a choice is framed affects our decisions, our appetite for risk and any tendency towards overconfidence can have an impact, as does our willingness or unwillingness to learn from past experience.

Any product launch is likely to have to fit in alongside other products in the division. For example, how important is the new launch for the division? Is it a must-have, or only a nice-to-have? What would the consequences be if it failed or succeeded?

The behavior of groups

The corporation

It is helpful to consider the concept of “groupthink” where members of a group can tend towards forging a consensus, confirming each other’s beliefs and resisting dissent. At the same time, “risky shift” can occur where the group leans towards being more willing to take risks than the average of its component individuals.

Finally, any decision at the division level may be shaped by forces at the level of the corporation. What expectations does corporate place on your division? Is it better to try and fail or fail to try? Additionally, for the manager, what expectations does the corporation have for you? Have you been hired from the outside and, therefore, under pressure to succeed? What are the career options for success and the consequences of failure?

“Any manager understands that more is involved.”

The behavior of individuals in groups

How do individuals behave in a group setting? It can be difficult to resist pressure to conform to the opinion of the majority. For some individuals in teams, it can be just as important – if not more so - to be seen to be consistent in their decisions rather than correct. What decisions were made in the past may be crucial, as leaders may be admired for persistence in sticking to their guns.