A Critical Evaluation Of The Impact Of Decision Making On Organizational Performance (Case Study Of Choice Farm Ltd.)

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A Critical Evaluation Of The Impact Of Decision Making On Organizational Performance (Case Study Of Choice Farm Ltd.)


Abstract


The main focus of this study is to examine the impact of decision making on organizational performance. The study further ascertain the strategies or process through which managers arrive at decision making, examine the factors that determines decision-making in organizations and investigate if there is any correlation between decision making and organizational performance. The study adopted a survey research design and with the aid of convenience sampling method, the researcher selected 36 participant who are staff and management of CHOICE FARM LTD was selected for the study. Self-Structured questionnaire was issued to the respondent of which 30 was retrieved and validated for the study. Data was analyzed in Simple percentage using frequencies and tables. Findings of the study reveals that the processes  through which managers arrive at decision making in organization includes: defining the decision, identifying an alternative course of action, evaluating each alternative, selecting the preferred course of action, and the last one is analyzing and assessing the decision. ht bias, base rate bias, loss aversion bias and risk aversion bias amongst others. The study recommendation is that for appropriate decision making process, managers should endeavor to obtain appropriate and adequate information before embarking on decision process if good results are to be obtained from the decision outcomes and to avoid distortion and errors that would emanate at the end of the day. Secondly, decision makers and managers should practice transparency, fairness, equity and honesty base practices and apply them in all their dealings religiously such that the quality of the decision made would stand the taste of time and enable high performance output attainment by Breweries manufacturing organization.


Chapter One


Introduction

1.1 Background of the Study

Every day, people make decisions in their homes, schools, political and governmental organizations, business boardrooms, and executive offices. Leaders and managers at the top of the organizational structure make choices, particularly strategic decisions (Hickson et al., 1986). Decision-making, by definition, is the process through which managers identify and seek to resolve organizational challenges (Bartol and Martin, 1994). According to Harris (2009), decision making is identifying and competently picking from a variety of possibilities based on personal preferences. It encompasses a wide range of processes that serve as bridges between thinking and action, as well as behaviors themselves (Talley, 2011).

Notably, decision-making is a critical organizational activity that affects individuals, groups, and organizations at all levels. In the organizational structure, it is frequently linked to problem-solving and group procedures. The importance of decision-making in today’s organizations has become even more important as technology has advanced and our capacity to engage in more efficient operations has increased. Members of an organization are frequently tasked with making quick judgments without the information or skills necessary to do so. However, in whatever type of organization, decision-making is one of the most crucial roles of managers in attaining high performance (Nooraie, 2012).

Organizational performance is one of the most significant issues in management study, as well as the most important criterion in evaluating organizations, their activities, and their environments, as evidenced by its widespread use. Profitability has long been used as a yardstick for evaluating an organization’s performance. No one wanted their business operations to be recorded as losses during the accounting period. As a result, managers in companies were encouraged to create a profit throughout company operations and at the conclusion of their accounting period. Managers must make strategic decisions in order to map their organization’s route to attaining its objectives as dictated by the board of directors and senior management behind those profits. Managers required data to make informed business decisions. Despite the fact that managers received a lot of knowledge before making judgments, they might not make the best strategic decisions for their companies.


1.2 Statement of the Problem

It is a key managerial activity in all sorts of businesses, large and small, commercial and non-profit, private and public to make strategic decision on how to advance the growth of their company (Elbanna and Child, 2007). When properly executed, strategic decisions provide a chance to reposition and realign an organization to better “fit” its environment (Harrison, 1996). As a result, successful strategic decision making allows an organization to maintain a competitive position, align internal operations with the external environment, and survive threats and challenges, whereas a single, poorly made strategic decision can lead to an organization’s demise and result in corporate embarrassment, large economic losses for stakeholders, or even bankruptcy, due to their magnitude (Mueller et al., 2007). As a result, a strategic decision process must be characterized by novelty, complexity, and open-endedness, as the organization typically begins with little understanding of the decision situation it faces or the path to its solution, as well as only a hazy idea of what that solution might be and how it will be evaluated once it is developed. As a result, Noah (2008) underlined that managers’ engagement in strategic decision-making fosters a sense of belonging among employees as well as a pleasant working environment in which both management and employees willingly contribute to improving the organization’s success. It is upon this premise that this study seeks to examine a critical evaluation of the impact of decision making on organizational performance.


1.3 Objectives of the Study

The broad objective of this study is to examine the impact of decision making on organizational performance.

Specifically, the study seeks:

  1. To ascertain the strategies or process through which managers arrive at decision making.
  2. To examine the factors that determines decision-making in organizations?
  3. To investigate if there is any correlation between decision making and organizational performance

1.4 Research Questions

  1. What are the processes through which managers arrive at decision making in organization?
  2. What are the factors that determines managerial decision-making in organizations?
  3. Is there is any correlation between decision making and organizational performance?
  4. What are the impact of decision making on organizational performance?

1.5 Significance of the Study

Findings from the study will be relevant to managers of organization as it reveals different managerial functions on appropriate strategic decision-making, which contributes to keep the survival of organization in the market and competitive position in the market. Also the cooperation in managerial functions, contributes to raise the level of performance within the organization. Empirically, the study will contribute to the general body of knowledge and serve as a reference material to both scholars and student who wishes to conduct further studies in related field.


1.6 Scope of the Study

The scope of this study borders on the impact of decision making on organizational performance. It will ascertain the strategies or process through which managers arrive at decision making. It will examine the factors that determines decision-making in organizations and investigate if there is any correlation between decision making and organizational performance. The study is however delimited to (CASE STUDY OF CHOICE FARM LTD.)


1.7 Limitation of the Study

Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. The significant constraint was the scanty literature on the subject owing to the nature of the discourse thus the researcher incurred more financial expenses and much time was required in sourcing for the relevant materials, literature, or information and in the process of data collection, which is why the researcher resorted to a limited choice of sample size. Additionally, the researcher will simultaneously engage in this study with other academic work. More so, the choice of the sample size was limited as few respondent were selected to answer the research instrument hence cannot be generalize to other corporate organizations. However, despite the constraint encountered during the research, all factors were downplayed in other to give the best and make the research successful.


1.8 Definition of Operational Terms

Decision Making Process:

Decision making is the process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.

Managerial Function:

At the most fundamental level, management is a discipline that consists of a set of five general functions: planning, organizing, staffing, leading and controlling.

Organizational Performance:

Organizational performance comprises the actual output or results of an organization as measured against its intended outputs.


Chapter Five


Summary, Conclusion and Recommendation

5.1 Summary

The main focus of this study is to examine the impact of decision making on organizational performance. The study further ascertain the strategies or process through which managers arrive at decision making, examine the factors that determines decision-making in organizations and investigate if there is any correlation between decision making and organizational performance

The study adopted a survey research design and with the aid of convenience sampling method, the researcher selected 36 participant who are staff and management of CHOICE FARM LTD was selected for the study. Self-Structured questionnaire was issued to the respondent of which 30 was retrieved and validated for the study. Data was analyzed in Simple percentage using frequencies and tables.


5.2 Conclusion

Several decisions are made by career managers on a daily basis. The more those decisions are made, the more managers acquire expertise but at the same time, they are confronted with problems. A problem is however a situation that could prevent the organization from reaching its goal thus decision making occurs as a reaction to a problem or an opportunity thus requiring consideration of alternative courses of action.Decision-making involves choice from a basket of alternatives. It is the process of identifying and choosing among alternative courses of action. A decision is a commitment to action. Every decision is risky. It is the commitment of present resources to an uncertain and unknown future. Experienced executives diagnose road-blocks to effective decision-making and develop strategies to overcome them. Effective decision-making demands precise and accurate strategies that would produce the desired results. : We have strategic and non-strategic types of decision. Strategic decisions are those decision elements that determine the overall direction of an enterprise. Non-strategic decisions, on the other hand, are day-to-day minor operational decisions in an organization. Effective decision-making demands precise and accurate strategies that would produce maximum success. Some of the strategies that can be used in decision-making include; bargaining, incremental or trial and error strategies, brainstorming, and nominal grouping. There are also hidden traps in decision-making which should be avoided by every decision maker. They include framing, overconfidence, anchor trap, status-quo trap and sunk-cost trap. Decision making has never been easy. It is especially challenging for today’s managers. In an era of accelerating changes, the pace of decision making also has accelerated.

Findings of the study concludes that:

  1. Processes  through which managers arrive at decision making in organization includes: defining the decision, identifying an alternative course of action, evaluating each alternative, selecting the preferred course of action, and the last one is analyzing and assessing the decision.
  2. Factors that determines managerial decision-making in organizations includes  manager’s knowledge,  information available, Organizational culture and context, Economic and social factors and Risk and uncertainty
  3. There is a correlation between decision making and organizational performance

5.3 Recommendation

Base on the findings of the study, the following recommendations were made:

  1. Decision makers/Managers should not allow their own characteristic to affect what they see in others and how we judge them. This is pertinent in the sense that every organization has standard code of conducts and norms for effective operations that are set as minimum thresholds and benchmark for adoption. Breweries organizations should religiously follow these standard procedures to facilitate performance outputs.
  2. Decision makers/Managers of Nigerian Breweries plc Lagos and Guinness Breweries plc Lagos should avoid stereotyping and generalization but focus on their judgment based on merit associated on each subject matter to help drive the organization toward attainment of high performance goals of profit maximization, growth, productivity, effectiveness and organizational efficiency.
  3. Decision makers/Managers involved in the decision processes of Choice Farm Limited Lagos should as much as possible practice transparency consistency, honesty, equity and fairness to ensure effective decision process such that goals of the organizations will be realized.
  4. Periodically workshops, training and orientations session be organized for manager involved in decision making to abreast them of the importance and sensitive nature of the task assigned to them bearing in mind that quality performance output can only be achieved when accurate, valid, reliable and effective decision are made that high performance output are attained. These should as a matter of seriousness be not compromised.

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