10. Conclusion
Relevant Facts
Identify the Problem
Prescriptive and Descriptive Decision Making
Defend Reasoning
Implement the Plan
Follow Through
Open to Feedback
Repeat
11. Resources
Bazerman, M. H., & Moore, D. A. (2015). Judgment in managerial decision making. Hoboken, NJ:
Wiley.
Friedman, E. (2017, September 4). 4 External Factors that Affect Human Resource Management.
Retrieved December 16, 2018, from https://blog.shrm.org/blog/4-external-factors-
that-affect-human-resource-management
Lipshitz, R., & Cohen, M. S. (2005). Warrants for prescription: Analytically and empirically based
approaches to improving decision making. Human Factors, 47(1), 102-20. Retrieved
from https://csuglobal.idm.oclc.org/login?url=https://search-proquest-
com.csuglobal.idm.oclc.org/docview/216450208?accountid=38569
Miner, M., & Petocz, A. (2003). Moral theory in ethical decision making: Problems, clarifications
and recommendations from a psychological perspective. Journal of Business Ethics, 42(1),
11-25. doi:http://dx.doi.org.csuglobal.idm.oclc.org/10.1023/A: 1021654015232
Wilhelm, W. (2012). FINANCIAL DECISION MAKING: A STUDY OF BOARD ROOM DECISION- MAKING
DYNAMICS. Delta Pi Epsilon Journal, 54(1), 27-40. Retrieved from https://
csuglobal.idm.oclc.org/login?url=https://search-proquest-com.csuglobal.idm.oclc.org/docview/
1326249086?accountid=38569
Editor's Notes
Hello, my name is Mackenzie Roddy and I will be sharing with you, a presentation on outsourcing a division in times of economic downturn.
Many organizations have tuned to outsourcing as it adds value and minimizes high costs to the business. Outsourcing requires business leaders to first gather the relevant facts to make a sound decision. During the fact gathering process it is necessary that leaders gather internal and external facts that may contribute to the outcome of the situation. These internal/external factors include government regulations, economic conditions, technology, and the workforce (SHRM, 2017).
Once internal and external facts have been gathered organization leaders can determine what facts are relevant to the decision being made. A large part of determining relevance is the leaders practicing sound judgment. In the fact gathering process leaders will have a decision about the relevance of certain facts. Then a leader decides which facts are relevant based on sound judgment (Bazerman & Moore, 2013).
After relevant facts have been gathered, organization leaders can define the problem and move to the next step – Brainstorm
In the previous slide we went through the motions of fact gathering. Once we have gathered the facts, leaders must begin the process of brainstorming a path forward. This begins with identifying the problem. A manufacturing company that is looking o outsource a division there could be a number of problems relevant to the issue. These problems in include cost of an state-side manufacturing plant, labor and other employment issues, availability of goods and transportation costs. When leaders can identify the factor that is causing the issue then moving forward becomes possible.
Next leaders weight the criteria they have identified. Not all criteria holds the same relevance- this is why brainstorming is important (Bazerman & Moore, 2013). Once leaders have decided on relevant criteria they can begin to move forward in the decision making process. For example: If the manufacturing plant is looking to outsource because of high labor costs, then the leaders can begin to brainstorm further on reducing labor. If the issue is transportation, the criteria will be completely different.
A large part of managerial decision making is the use of Heuristics. Heuristics come into action when leaders need to make quick decisions, with little facts. While this may not seem directly related to brainstorming- rather the opposite, it is important to point out in the brainstorming process. Often Heuristics will point out the ethicality of decisions made (Willhelm, 2012), It is important for leaders to be able to justify their decisions through the brainstorming step.
Leaders who are faced with making decisions on the behalf of an organization must make competent decisions. In a large manufacturing company, leaders can structure their decisions in a descriptive or prescriptive manner.
Prescriptive decision making takes place when leaders make rational decisions based on analysis and methods. In a manufacturing company this may include a thorough analysis of the workforce. This could include overheard costs related to salaries, Overtime, and potential legal fees for employment compliance matters. If the company was looking to outsource employees through the use of a temp agency, these factors would be determined in a prescriptive analysis.
Descriptive decision making is different in regards to the study of how decisions are made rather than why.
In a large manufacturing company that is looking to outsource, prescriptive decision making would be better because it allows for a 360 analysis of the situation. When making impactful decisions leaders need to proceed with facts and logic on why they do what they do. Not merely, how will they do it.
As the manufacturing company looks to outsource a division within the company they should proceed by practicing prescriptive decision making. Leader’s decisions should be based on a criteria or model by which the conclusion for the decision was drawn (Lipshitz & Cohen, 2005).
With this in mind leaders must analyze factors that contribute to the decisions being made. We discussed earlier in the presentation examining internal and external factors in the brainstorming process. This is still applicable the analysis of the issue to be solved. When outsourcing is going to take place a complete and thorough understanding of factors is critical.
A 360 approach will ensure each angle of the decision is taken into consideration. Outsourcing a division may come with many layers and facets that need a complete analysis before the decision is made. Prescriptive analysis will help with this process and long term planning long after the initial decision has been made.
The reason the large manufacturing company should use prescriptive analysis when outsourcing the division is because it will allow for examination that occurs in the present, as well as, the future. The manufacturing company wants to make a sustainable decision that will be functional in the future. Prescriptive decision making will also aid leaders in making ethical decisions, since multiple factors will be taken into consideration (Minor & Petocz, 2003). When decisions are made with a thorough thought process, leaders are less likely to skip steps and be sloppy in their work; while maintaing ethical business practice.
Critics of prescriptive decision making may say it takes too long to make decisions or create paths forward. Such examples are analysis paralysis. When these criticisms take place leaders should be vigilant to do the right thing, even if it takes a little longer. Outsourcing a division of a manufacturing company comes with many obstacle, and clearly defining obstacles is important.
Now that we have decided to make prescriptive decisions it is time to move forward and implement the solution. It is likely the decision made will also have many components, so leaders need to be prepared for continued challenges throughout the implementation phase.
Oftentimes, plans won’t work and leaders need to go back to the drawing board- that is okay. The important thing on following through on results, is being open to what is not working. Leaders may not want to tend to an issue that has already been dealt with, instead they want to move on. The leaders of the manufacturing plant cannot have this type of attitude, rather they need to ensure the outsourcing model is serving the business well.
If there are components that are not working, leaders need to be open to change. This can be hard for many leaders who do like like the use prescriptive decision making, rather Heuristics because decisions can be made quickly and easily. Leaders need to center their focus to the big picture and make well informed decisions and corrections to decisions that do not subsequently work.
If there is any tool a leader can utilize in the outsourcing process, it’s continuous dialog. This will create a safe space for feedback and process improvements.
Following through on results also includes evaluating issues. Leaders need to be open to the prospect of issues arising. This can take place in a number of ways when a manufacturing company chooses to outsource.
Handling the issues is what will set strong leaders apart from weak leaders. It is important not to burry issues and pretend they are there, or defend issues based on rational of decisions made.
Transparency through problem solving is a great way for leaders to show they aren’t afraid of a challenge or too prideful to admit to strategies that don’t work.
Leaders need to be ready to repeat any one step at a given time. Internal and external factors may shift, new needs may arise, priorities may change, and so forth.
Effective leaders will be ready at any moment to repeat the process and cycle of decision making. Not all decisions may require they same step by step as outlined in this presentation, but it is a good start to understanding the sequence of events in decision making. Other decisions may require the use of Heuristics or descriptive evaluation. Leaders must be aware of these components and act appropriately.
When outsourcing a division effective leaders will be in tune to the many facets of the decision and will be ready to repeat the process when needed.
This presentation focused on how a large manufacturing firm should evaluate their decision making process to outsource a division of the plant.
We took an in depth analysis of gathering relevant facts that pertain to the situation, identify the problem we want to solve, determine the use of prescriptive or descriptive decision making, defend our reasoning, implement the plan elements, follow through on decisions made, be open to elements that may not be working through transparent problem solving, and repeat the process in the even a factor needs to be edited.
Effective leaders will understand the necessity of each of these components and be agile with their use. This means that leaders will use elements when needed and be fluid throughout each process.
Outsourcing may seem like a huge undertaking, but with the right decision making philosophies in place, leaders will be effective and successful.
