Decision making is a fundamentally important organizational task which occurs on a daily basis and which largely affects organizational performance. In fact, decision making is arguably the most important factor that determines the performance of any organization. Simply put it this way; a right decision propels the organization in the desired direction and a poor decision turns the organization away from its intended direction.
When making any decision, Wilfred Pareto advocated for a decision making process that ensures meeting the needs of every stakeholder without or with as minimal loss as possible (Ralph and Leake, 2002). This then calls for a consensus and compromise to be reached between the decision maker or the decision making organization and stakeholders, which then call for a synergistic approach especially when making crucial organizational decisions. Many a times, decision makers fail to realize the importance of a synergistic approach towards decision making and only realize such an importance later afterwards when their decisions have a negative impact on organizational operations and performance (NHS Institute for Innovation and Improvement, 2008). According to Lunenburge (2010), the primary aim of using a synergistic decision making approach is to allow stakeholders express themselves and present their interests and concerns, which minimizes or prevents many problems such as high resistant by employees to implement a certain decision. This paper presents such a case where a synergistic approach ought to have been used when making an organizational decision, which would have given better results.
The organization decision
The world in general is undergoing major economic challenges, which are affecting almost every industry and sector. The healthcare industry has been forced to cut down on expenses especially due to the fact that government, donors and charity organizations are cutting down on funds allocation to public hospitals and others run by donors and charitable organizations. Our organizations has been a victim of these changes and in the effort to cut down on costs, the management made a quick decision to cut down on the workforce by 40 percent arguing that the current workforce is more than sufficient to effectively run the organization. If successful, this was a good move because it would have helped the organization to cut down its operations costs by 40%, which would be slightly higher by the percentage of funding reduction (30%). This then means that compared to previous years, the organization would be having more financial resources to implement plans aimed at improving service delivery. However, the implementation of this decision did not succeed owing to major resistance from employees especially by their respective trade unions.
The workforce reduction planned was in such a way that it would cause forceful employee reduction by removing non-performing employees within a period of one year. Employees from different departments were expected to satisfy given performance criteria for them to be considered safe. This was also not a bad idea because it would have resulted to the elimination of non-performing employees thereby improving organizational performance. In fact, when communicating the decision to employees, the management argued that it had realized that there were several non-performing employees whom it needed to eliminate and replace with high performing employees. At this point, employees, through their trade unions, criticized the performance criteria established arguing that it was not practical. It was indeed not practical because it was somehow vague in distinguishing between high, medium and low performers considering that this is a service delivery organization where numbers do not matter; what matters more is the complexity of the case and the quality of service delivered.
After one year of trade in between employees and management, the first batch of 7 employees was eliminated and this is where the climax of employee resistance was realized. Trade unions reacted almost immediately and what followed was a tough legal battle between the organization and trade unions that lasted for 3 months and whose results were against the organization’s desired move. All the employees were reinstated and compensated for the three months they did not work. Eventually, the outcome of the decision was totally opposite of what it was designed for; it increased operational costs instead of reducing them.
How the decision would have made using the synergistic approach
The synergistic approach is centered on collaboration and effective communication between the decision maker and all relevant stakeholders. A model for synergistic decision making is presented below that has four components: clarifying the decision to stakeholders, listening to their concerns and grievances, providing appropriate response such as changing areas of great concern and then reinforcing the collectively agreed decision.
The management should have followed this approach by involving employees at every level. Perhaps employees might have suggested better ways of reducing costs or workforce such as some employees willing to undergo early retirement. Again, employees might have suggested better performance criteria for eliminating non-performing employees and hence enable the organization to reduce employees.
Conclusion
The importance of organizational decision making process calls for the application of effective decision making strategies and approaches. Synergistic approach is one such approaches that advocates for collaboration between decision maker and all relevant stakeholders to ensure that the decision made meets the needs of every stakeholder without or with as minimal loss as possible.
References
Lunenburg, F. C. (2010). Models of Decision Making. Sam Houston State University.
NHS Institute for Innovation and Improvement. (2008). Quality and Service Improvement Tools: Pareto. Accessed January 13, 2014 from http://www.institute.nhs.uk/quality_and_service_improvement_tools/quality_and_service_improvement_tools/pareto.html
Ralph C. C., & Leake, C. (2002). The Pareto principle in organizational decision making. Management Decision,40(8), 729 – 733.
