If a manager has all available information, why may a poor decision still be made?

Decision-making is the action or process of thinking through possible options and selecting one. It is important to recognize that managers are continually making decisions, and that the quality of their decision-making has an impact—sometimes quite significant—on the effectiveness of the organization and its stakeholders. Stakeholders are all the individuals or groups that are affected by an organization (such as customers, employees, shareholders, etc.).

Inhaltsverzeichnis Show

• The Decision-Making Process
• Decision-Making Pitfalls Managers Should Avoid
• 1. Defaulting to Consensus
• 2. Not Offering Alternatives
• 3. Mistaking Opinions for Facts
• 4. Losing Sight of Purpose
• 5. Truncating Debate
• Becoming a Better Decision-Maker and Manager
• What are the reasons for poor decision
• Why is decision
• How does lack of information affect decision
• What should a manager consider when deciding to make a decision?

Members of the top management team regularly make decisions that affect the future of the organization and all its stakeholders, such as deciding whether to pursue a new technology or product line. A good decision can enable the organization to thrive and survive long-term, while a poor decision can lead a business into bankruptcy. Managers at lower levels of the organization generally have a smaller impact on the organization’s survival, but can still have a tremendous impact on their department and its workers. Poor decision-making by lower-level managers is unlikely to drive the entire firm out of existence, but it can lead to many adverse outcomes. Therefore, increasing effectiveness in decision making is critical, and using a model can help.

The Decision-Making Process

Decision makers should use a systematic process for making decisions. The decision-making process can be broken down into a series of six steps, as follows:

1. Recognize that a decision needs to be made.
2. Generate multiple alternatives.
3. Analyze the alternatives.
4. Select an alternative.
5. Implement the selected alternative.
6. Evaluate its effectiveness.

While these steps may seem straightforward, individuals often skip steps or spend too little time on some steps. In fact, sometimes people will refuse to acknowledge a problem (Step 1) because they aren’t sure how to address it.

The Decision-Making Process (click to enlarge). Adapted from Open Stax, Rice University CC-BY 4.0

Being a manager can be both stimulating and challenging. Transitioning from an individual contributor to a manager comes with the opportunity to influence decision-making processes, implement business strategies, and oversee organizational change initiatives.

It can also increase the likelihood that you’ll make mistakes, as you take on greater responsibility and learn how to manage not just yourself, but others. If leveraged correctly, these professional missteps can become learning opportunities.

A study by Development Dimensions International (DDI) found that leaders most often build their skills through trial and error—particularly when it comes to decision-making. The study also showed that managers who learn through trial and error are 52 percent more likely to describe their first year in the role as “stressful,” and twice as likely to describe it as “overwhelming,” compared to peers who acquire skills from their supervisor.

No matter where you are in your career, there are steps you can take to improve your management skills and gain the knowledge to excel in the role. Whether you’re currently a manager, or preparing to become one, here are five common pitfalls to avoid when making business decisions.

Decision-Making Pitfalls Managers Should Avoid

1. Defaulting to Consensus

As you and your team work through the steps in the decision-making process, there can be a tendency to default to consensus, wherein everyone agrees on what the problem is, there’s a free exchange of ideas, and the recommendations for moving forward are acceptable to everyone involved.

According to Harvard Business School Professor Len Schlesinger, who’s featured in the online course Management Essentials, a consensus approach can be appropriate in some situations, but in others, potentially lead to a lower evaluation of the issues at hand and less creative problem-solving.

“The consensus process is designed to avoid conflict, and managers defer to it regularly because it’s comfortable,” Schlesinger says. “It has low cost for all of the players, and it might be supportive of greater group harmony. If it’s not a very important task, where there’s data and clear alternatives articulated, it might even be appropriate. But it’s appropriate much less often than you might think.”

To avoid this pitfall, Schlesinger says, it’s important to be clear at the outset of the process about how decisions are going to get made and the roles people are going to play.

“Unless you’re intentional about trying to overcome consensus, you’re going to be stuck with it,” he says. “Then you’re going to get a group together that’s going to manifest a decision-making process that’s essentially no better than what you would come up with by yourself.”

2. Not Offering Alternatives

Another drawback that can result from defaulting to consensus is a lack of alternative solutions presented during the decision-making process.

According to Schlesinger, this happens because the group reaches alignment prematurely, without looking at the problem through different lenses and exploring other pathways for moving forward.

“They get to convergence much too quickly, which is largely one of the most negative byproducts of the consensus-oriented model and why it’s only appropriate for the most simplistic, best-structured decisions,” Schlesinger says.

For more complex problems, a process centered on devil’s advocacy would be more appropriate, which involves assigning an individual to probe underlying assumptions and push members of the group to explain the logic and reasoning behind their opinions.

“That’s much more likely to lead to a deeper critical evaluation and generate a substantial number of alternatives,” Schlesinger says. “As the task or the problem is less well-defined, it’s a much better way of getting the issue framed in a coherent way.”

3. Mistaking Opinions for Facts

One of the key steps in the decision-making process is to set ground rules and ensure everyone is aware of their role and how they can contribute. A significant part of that involves establishing alignment within the group on the difference between facts and opinions.

“It’s very easy in the context of a group process to have things go into a much deeper set of conversations that don’t really test the data that’s coming into them,” Schlesinger says.

To overcome this, managers should assign someone in the group with the task of validating items presented as facts to keep conversations on track and moving in the right direction.

“It involves making sure the group isn’t driving to closure on a decision-making process by assuming that things are factual when they’re not,” Schlesinger says.

4. Losing Sight of Purpose

Over the course of the decision-making process, managers and their teams can, at times, get wrapped up in the intricacies of problem-solving and lose sight of the bigger picture.

To ultimately sell whatever decision is made to the larger organization, priorities and goals need to be well-established and reiterated throughout the decision-making process.

“The decision to be made has to be clearly articulated, the goals have to be laid out upfront, and the group should be responsible for revisiting those goals continuously,” Schlesinger says. “It’s easy, as you get into these conversations, to get so immersed in one substantive part of the equation, that you lose track of what the actual purpose is.”

Research from EY and the Harvard Business Review shows that 89 percent of executives believe a strong sense of collective purpose drives employee satisfaction, so make it a point to underscore your team’s objectives when leading critical meetings and discussions surrounding the problems you’re facing.

Related: 5 Key Benefits of Enrolling in a Management Training Course

5. Truncating Debate

In addition to imbuing team members with a sense of purpose, managers should facilitate an environment in which they feel safe and empowered to offer their opinions and be involved in the decision-making process.

According to the results of a study on team performance detailed in the Harvard Business Review, the highest-performing teams share a key commonality: psychological safety.

“The concept of psychological safety is at the epicenter of a high-quality decision-making process, because we need to ensure that every member of the group feels free to express their point of view without fear of retribution or punishment associated with their voice,” Schlesinger says. “Absent to everybody bringing their whole best selves to the meeting and believing they can engage in a wholesome conversation, the point of bringing a group together for a decision where people aren’t going to express their point of view is a waste of time.”

Schlesinger notes that it’s vital for managers to establish group norms at the outset of the process to foster candor and debate, and make sure everyone feels their voice is valued.

“The manager ought to make sure that everybody is talking,” he says. “It’s his or her responsibility to continually ensure that everybody is at the table and believes they’ve been involved, because that same population is going to be responsible for helping implement the decision.”

Becoming a Better Decision-Maker and Manager

Understanding how to leverage and navigate the decision-making process is essential to becoming a better manager. By learning about the common pitfalls that managers encounter when facing important business decisions, you can ensure you’re equipped with the know-how to overcome organizational challenges and lead your team to success.

Do you want to learn how to design, direct, and shape organizational processes to your advantage? Explore our eight-week online course Management Essentials and our other leadership and management courses to discover how you can influence the context and environment in which decisions get made at your company.

What are the reasons for poor decision

Why is decision

How does lack of information affect decision

What should a manager consider when deciding to make a decision?