The aim of this report is in order to analyze a personal decision making and the issues in the process of decision in a workplace with critical reflection which includes academic theories and some models. Also some reflections will be given to deal with the problems. I worked as an accountant in a technical company which produces various Laser Cutting Machines. The machines are used in car-making, ship-building, and these kinds of markets are very potential in China. Therefore, the financial situation was great in the company.
However, for expanding more markets, the company planned to produce Plasma Cutting Machines which are used in industrial machine making such as electrical cabinet production, metal manufacturing and diggers.
The company established a work team which was consisted by nine staffs from different departments and spend three months to analyze whether the new plan should be implemented, and the boss made the final decision according to the advices from the team. I was appointed as one of the members in the work team, and I took part in the team to collect the information of Plasma Cutting Machines market.
The analysis showed that the new plan is valuable, and if the company produces the new machines, this would bring more increase of sales. At last, the boss decided to produce Plasma Cutting Machines to enlarge wider market. However, because of the Engineering equipment manufacturing market downturn, the sales of new machines decreased year by year. After five years, this new plan brought a large number of losses.
2. The Normative approaches of decision making
As we know that there are two kinds of decisions which are programmed decisions and nonprogrammed decisions (Simon, 1984). It is clear that in this case, the decision is belong to nonprogrammed decisions because the decision maker must choose whether the company should produce the new machine, and it was not routine. For the decision maker, it contained high risk and uncertain factors. Before the boss made the decision, he must consider a lot of factors. According to the normative models (Anthony Hopwood, 1974), it is noticed that the boss realized that the company should not only sell the Laser Cutting Machines, and it needs to develop better.
Then in order to earn more money, decision maker suggested investing to product new machines which are Plasma Cutting Machines. Meanwhile he established a team to evaluate the plan. The team collected the information which included the structure and functions, cost and market value about the new machine. According to the team’s evaluation, the boss thought this investment has very high market value. Therefore, he decided to add a new product line to produce Plasma Cutting Machines. Next, according to the customer requirements, new machines were produced.
The team spent three months to do the research about the Plasma Cutting Machines, and they thought the new machine would bring the benefits to the company. As a result they advised the boss to implement the new plan, and the boss accepted the suggestion. After that the company invested to the new project with a large number of funds. Even though the decision maker prepared a lot of things before he decided to add a new line to produce Plasma Cutting Machines, the new plan seemed not as successful as he expected. The sales of the new machine decreased year by year, and this led to a large number of losses five years later which even influenced the financial situation of the Laser Cutting Machines.
4. The issues and analysis
4.1. Team work
In the process of decision making, team work was crucial to the decision maker, and this way brought some benefits such as promoting the employee’s work efficiency; using more opportunities which are provided by advanced science and technology; making work become more effective through the range of abilities and knowledge distributed from team members (Schein, 1965). However, because of the benefits, the boss relied on the team too much and ignored the disadvantages of the team. This was the one of the most important reasons why he made an unsuccessful decision. The team was a research and development team which is usually used in highly technical company (Ashleigh, 2010).
Our work team needed to collect a large number of information about the new machine. First, the members must research the structures and functions about Plasma Cutting Machines. Moreover, the members also need to survey the sales situation of the new machines in the market. Furthermore, the cost of every machine needs to be confirmed, and according to the sales and cost, the members needed to calculate the profit. Meanwhile, they must survey if other related companies which need to use Plasma Cutting Machines and may become the customers have potential in the future. It is clear that this team helped to develop and test new products, and this work not only needed members’ professional knowledge but also members’ innovation and experience in this field (Ashleigh, 2010). Whereas, the members ignored some important factors when they analyzed the new products. First, the cost of the Plasma Cutting Machines are very expensive, and each machine needs more than hundreds of thousands dollars. As a result, most customers preferred renting the machines to buying them, and this contributed to the decreasing sales.
Second, the depreciation of the new machines increased fast, and the components of the new machine are very expensive and can be broken easily. Therefore, the company needed to cost high price to fix the machines. In addition to this, there were some other disadvantages. In the process of the analysis, the conflict usually arises among the members because of various sources such as individual differences, incompatible goals, different values and beliefs (Hinds and Bailey, 2003). In this case, the members of the team all came from different department such as Production Department (PD), General Accounting Department (GAD), Marketing Department (MD), and Purchasing Department (PD).
Every department focused on different parts of the new plan. PD concentrated more on quality of the machines; GAD paid attention to the economic return; MD focused on market value and customers; Purchasing Department paid more attention to the cost of every machine, as a result when they have relational problems, they may have different perspectives. This situation contributed to negative conflict (McShane and Travaglione, 2003). Consequently, the conflict caused the result of the team work was not to be objective.
4.2 Uncertainty and Risk in the market
In the process of decision-making, there are often some uncertain outcomes we cannot see previously, and it means it has risks. Furthermore, if the risks do not be solved in time, they may become a crisis to the company (Davies and Walters, 1999), and the crisis can lead to undesirable consequences. According to the team’s analysis about the Plasma Cutting Machines, the boss thought the new machines had very high market value because they are used in the Engineering equipment manufacturing market such as electrical cabinet production, metal manufacturing and diggers, and they were very popular industry in China.
However, the market is changeable, and the Engineering equipment manufacturing market was stuck in a dilemma from 2011. Contraction of the current engineering machinery market is mainly due to the downturn of the construction of high-speed rail, and the infrastructure construction was completed gradually. This, in turn, led to the decreasing sales of the Plasma Cutting Machines. Obviously, the decision maker did not realize the uncertain factors before he made the final decision.
As a decision maker in the company, first, he relied on the work team too much. According to the Big Five Personality Model, it is clear that he was not creative enough which means he gets low scores on openness to experience (Digman, 1990). The purpose of the work team is for providing some professional advices to the decision maker, so the boss should improve the professional knowledge about the Plasma Cutting Machines. Second, the boss should give more time to the team, but he just gave three months to the team to collect the information and analyze the new plan. It is obvious that three-month time was not enough to analyze this complicated plan clearly because the team needed to do a lot of work. Also the decision maker should invite more employees into the team because more members can give more specialized knowledge and suggestions. This can help to collect more information and contribute to a more effective decision. Another reflection is when the negative conflict exists, the members should solve it effectively.
According to the Nelson’s (1995) taxonomy, they can use the direct approach to deal with the conflict which means when there are some conflicts among the members, the team leader helps to solve the problems directly. They can also use bargaining approach to solve the conflict. For example, In this case, if the members from General Accounting Department hold the different ideas about buying the components of the Plasma Cutting Machines with Purchasing Department, other members should be the mediators and objectively analyze the two different points. This approach can help the team give more suitable advices to the decision maker. Moreover, before the decision making, the boss should do the survey about the situation of the Engineering equipment manufacturing market because this industry is associated with the new plan.
If the Engineering equipment manufacturing market has great financial situation, that means more companies need to buy or rent our new machines. Meanwhile, he also needs to know about the country policy because it plays an important role in economic market. Sometimes if a company has a good financial situation depends on the country policy. The last reflection is the decision maker should do a risk assessment to decrease the risk of the new plan (Teale, Dispenza, Flynn, Currie, 2003) before he made the final decision because the technology of producing was not mature at that time. At same time, he can study the experience from other Plasma Cutting Machines companies, or he can implement the new plan until this technology becomes mature.
This report illustrated the decision making about whether the new machines should be produced in a technical company. In the process of the decision, some issues arose and led to the failing result. The one of the main problem is the team did not give the suitable suggestions, but the boss still relied on the team’s analysis too much. Another issue is the uncertainty and risk of the economic market, and the boss did not realize the risk of the Plasma Cutting Machines. Contraposing the issues, some reflections were be given, and these reflections may help the company to solve some problems. If the decision maker can think about the new plan more specifically, the outcome may be not so disappointing.
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