Business Behavior in a Changing World

Introduction

In performance of the organization, decision-making plays an important role as it stipulates and determines directions and development process. Decision-making focus pertains to learning. In a team-based system, multidirectional learning is required across functions, levels, and organizations. This requires norms that are far different from those that prevailed in the traditional organization. Decision-making learning requires the willingness to surface bad news and act on it. But that will not happen unless the traditional reaction— negatively evaluating the messengers of bad news—changes. Organizations that encourage experimentation and innovation and set up mechanisms for shared reflection can capitalize on this learning potential. Researchers Janis (2001), Pettigrew (2001) and Valentin (2001) admit that changes in the rational model of decision-making are caused by behavioral factors, organizational learning, and a bias to previous experience and background.

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Discussion Section

The decision-making and behavioral factors

Following Janis (2001) “Perfect Failure: The Bay of Pigs” changes in the rational model are caused by deviations in business environment. Equally important is that team behaviors then be assessed. Imagine four teams, each performing the same task. In the first team, each team member is given an individual goal. In the second, a goal is set for the team as a whole only. In an experiment that replicated this situation, the team with individual goals only was the poorest performer among all four teams. Each team should identify a set of critical measures representing a combination of results and process-oriented outcomes. Focusing only on results (for example, return on sales, revenue growth, and so on) does not help inform the team about which behaviors should be adjusted. Process measures (time spent per call, days before call returned, and so on) identify key behaviors that the team can change in order to improve results. Teams should avoid developing too many measures. If a measure is not critical in guiding the team’s behavior, then discard it.

Pettigrew (2001) admit that employees are responsible for collective performance at multiple levels. Individual, team, and business unit performance must be evaluated. Optimizing performance at any one level may hurt performance at other levels. The link between behavior at one level and performance at another may be uncertain. People are often concerned that they will not get adequate feedback on how they are performing when the focus is on collective performance. Therefore, appraisal systems should assess behaviors that contribute to performance of other units or other levels within the organization.

The decision-making and organizational learning

Organizational leaning and training changes the rational decision0making and forces employees to apply new skills into practice.. This argument implies that organizations will have to make a commitment to learning in order to respond quickly to market conditions. “Learned” organizations will possess knowledge and information that gives them a unique competitive advantage over other firms organizations can support employee learning through three approaches. First, they can encourage them to join occupational associations that provide continuing education for their members. Second, they can make a direct investment in their employees through training and development programs within or outside of the firm. Several high-profile organizations have made extensive investments in employee learning. For example, Intel and Motorola each estimates that it spends approximately $120 million per year on employee training (Salaman, 2002).

Another organization needed its technical professionals to assume responsibility for leading a significant organizational transformation, including relationships with unions, customers, and nonprofessional employees. They created a development program to expose these new leaders, who until then had operated in narrow silos, to these critical constituencies, including presentations by satisfied and dissatisfied customers and by union presidents whose members were threatening to strike. Practitioners can work to ensure that the programs described here are available to help individuals cope with the emerging needs for lifelong learning, adaptability, employability, and development of a clear self-identity. If individual workers, organizations, and practitioners each have a clear understanding of the changed nature of work and careers (Salaman, 2002). A more direct approach to relating development to business results is to base the content of development directly on a corporation’s strategic directions or its pressing problems. For example, if a company’s strategic thrust requires partnerships and joint ventures, the content of leadership development becomes performing effectively in creating and leading such organizational arrangements. Similarly, development content might be determined by identifying problems or opportunities, such as anticipating the needs of future customers in as-yet undeveloped international markets, and assigning them to trainees. Note that development has two goals: developing leadership capability and moving the business forward. In practice, the content of a business-focused approach to development varies widely, depending on the business needs of the organization. For example, one company’s strategy called for restructuring to give more autonomy to its business units. Consequently it created a leadership development program that began with a presentation on how a strategic business plan should look, followed by coaching business unit leadership teams in developing their own business plans. Presumably the participants both learned a new discipline for crafting strategic plans and created viable plans (Salaman, 2002).

The decision-making and previous background

Previous experience limits the decision-making alternatives and forces many employees to choose a traditional approach in problem solving. More precisely, in addition to self-exploration exercises, companies should provide information that allows individuals to benchmark their skills and abilities against what the company and the job market in general are demanding There are various mechanisms for disseminating this information to employees, including the performance appraisal process, corporate publications and pronouncements, and announced changes in internal requirements. Beyond these standard, formal approaches, organizations must be willing to part with sensitive data on strategic decisions that could have a significant influence on individual employee plans. The move toward greater openness with employees represents a major cultural change for most companies. Organizations traditionally have not been willing to share data on business direction or changes in corporate structure with their employees. It also allows employees whose career interests are at odds with those of the company the opportunity to exit at an earlier time (Valentin, 2001). Specifically, the center’s approach emphasizes continual learning and adjustment on the part of the employee to ensure that skill levels are consistent with organizational requirements. As opposed to traditional approaches, the program places less emphasis on vertical or hierarchical movement within the sponsoring organization but greater emphasis on individual employability and value through lifelong learning. From a practitioner’s standpoint, a key task of the HR function is to help foster, implement, and monitor the career management practices.

Development content may be determined by individual needs rather than by organizational issues: a manager who has difficulty giving candid feedback may be assigned a project to develop and give detailed behavioral feedback to a problem subordinate; a manager having trouble managing upward might be assigned to develop a presentation for a senior executive. Such programs are usually conducted on-line, over time, and under the guidance of a coach, perhaps with a group of peers. Business-centered thinking about the content of development opens up almost limitless possibilities. It has the advantage of creating both individual learning and immediate business payoff (Valentin, 2001). Still, it is not without limitations. In our experience, the projects chosen for development over time may become less significant; assigning important problems for development purposes may take responsibility away from the decision makers who should be solving them; putting business issues into the development setting may diminish their apparent importance; potential outcomes of the programs can be oversold; some business issues are not amenable to resolution in a program setting; and the approach can be a theoretical to a fault, with little logic to guide an individual’s cumulative development. Globalization has changed the complexion of the high-potential pool; candidates now may come from anywhere in the world. As it turns out, cultural variety in the audience changes the nature of the process itself (Janis, 2001).

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Still, the action in leadership development will move inside corporations, supported by an array of service providers. Organizations will become more effective in using experience as a teacher and as their leaders become more committed to and better at coaching their executives will learn their way into better performance. Improvements in technology will support more effective use of on-the-job learning, just as it has revolutionized business practices. The different dynamics of the two classes requires that both content and method be changed to fit the groups. When the majority of participants are not North American, greater demands are placed on the development setting to recognize religious, cultural, and language differences that can interfere with learning. Indeed, the shift in learners has had valuable effects on the way development is being designed. Recognizing that learning to manage people with quite different perspectives has become core to leadership in many companies, increasingly programs designed on the basis of diverse cultural representation. In essence the participants are the content; instead of talking about working with people different from themselves, diverse participants in an action-learning approach actually have to learn to work with one another (Janis, 2001). Organizations often assume that all members of the high-potential group should have the same or similar experiences, and so they design lockstep programs or rotational assignments for the pool rather than for individuals. Even though the sequence of programs or events is often timed to coincide with presumably critical development transitions (for example, after taking a first managerial job) with content designed for the challenges faced at each level, the assumption is still that people in the same cohort have the same developmental needs. Organizations are learning, however, that development can be frustratingly individual and even gearing programs to generic transition points may not be tailoring enough. Some are taking individualization one step further by combining individual assessment with individual coaching to provide different development plans for each executive (Janis, 2001). Cost has been a major consideration in individual approaches, but the cost in salaries and bonuses of executives who fail plus the business losses incurred as a result of inadequate performance have grown so exorbitant that even the expense of an individual coach can seem modest. Yet another promising approach, prompted by increased emphasis on the learner and on-the-job learning, has been assessment of high-potential ability or openness to learning. A recent study of global executives identified eleven factors that distinguish between high-potential and solid-performing international managers and executives. These dimensions reflect two characteristics of potential: willingness to take (when offered) or to create (when bored) opportunities to learn new things; and necessary skills and willingness to create an effective learning situation once in those opportunities (for example, seeking out feedback, learning from mistakes, treating people in ways so that they are willing to help, and so on). This research resulted in a multirater assessment instrument to help leaders assess their readiness to learn and in turn improve their own ability to use experience effectively for growth. This, of course, is the ultimate step in individualizing development. Leadership development happens one leader at a time and like leadership itself is always in a context. The context of the process extends from the potential leader’s immediate manager and organization unit all the way to the global business arena (Janis, 2001).

Conclusion

Deviations from the rational model of decision making are a result of new changes in organizational earning and performance management. Development is a fragile part of that context, which may be development-friendly and supportive or development-hostile and destructive. Many of the development-friendly factors were implied in our review of the content, methods, and participants in leadership development. The trend in the rational model application will be toward more individualized approaches, tailored both to the growth needs of individual executives as determined by feedback and coaching methodologies and to the business needs of the organization.

References

Janis, I. L. 2001. “Perfect Failure: The Bay of Pigs”. In Decision making for business: a reader. G. Salaman. 1st ed. Sage Publications Ltd; pp. 9-39

Pettigrew, A.M. 2001. Decision -making as a Political Process. In Decision making for business: a reader. G. Salaman. 1st ed. Sage Publications Ltd; pp. 97-107.

Salaman, G. 2002. Decision making for Business. Sage, London, UK.

Valentin, E. K. 2001.Anatomy of Fatal Business Strategy. In Decision making for business: a reader. G. Salaman. 1st ed. Sage Publications Ltd;, pp. 40-61.

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