Decision-making is not always easy or straightforward.
Some decisions can be extremely difficult and involve multiple steps. Some
decisions must include other elements to provide the greatest opportunity for
success. Hoch, Kunreuther, & Gunther (2001) offered three methodologies of
dealing with difficult or multi-step decisions including (a) navigating
systemic complexity, (b) navigating multiple stakeholders, and (c) navigating
environmental complexity. All three examples could be useful to incorporate in
the decision-making processes of my organization.
Complex decisions are not something that we usually
look forward to. Decisions can be complex because of the number of people
affected. They could also be complex by the amount of data (either too much or
too little) provided. According to Hoch, Kunreuther, & Gunther (2001) “Data
is not the only factor driving complexity. Further complexity is created by
interactions across multiple decision boundaries surrounding a particular decision
context” (p. 122). I interpret this statement as ‘how can an organization
evaluate and study data to create optional decisions’. One option in navigating
systemic complexity is to utilize a computer model. My organization takes advantage of computer
models when making decisions.
According to Lewis and Otto (n.d.), a computer model
helps assess large amounts of data to ease the decision-making process. One way
the college utilizes computer models is in attempting to predict enrollment and
more specifically how enrollment will affect the college budget. As a member of
the Florida College System, Daytona State College (DSC) does receive state
money, but a large portion of college revenue is based on enrollments. To
estimate enrollment for the following academic year, the college will use the
research they have gathered (number of students graduating from local high
schools, enrollment from the previous, current retention, etc.) and enter it
into a computer model to help predict enrollment. The calculation is used to
help project revenue for the upcoming budget. A computer model allows for the
data to be changed so the leadership of the college is able to strategize for
many different enrollment scenarios. This data is useful in helping to predict
enrollment but can create complexity when creating the budget. Depending on the
chosen enrollment prediction, the college budget must be updated. If the model
predicts a decrease in enrollment then expenses must also be cut. But where
does the college cut? Should cost center managers be asked to travel less? Does
the college create a hiring freeze? Should the purchase of capital assets (such
as desks and computers) be ceased until final the enrollment numbers are in for
the first semester? These are the types of complex decisions that must be
considered each year.
We also use a computer model in the Finance
department to help ease the decision-making process. Each accountant has a
‘dummy’ version of the accounting system that can be utilized to test processes
and procedures. This version is not live so it will not affect the data in the
system. This test system is often utilized by the department when considering an
update of change to a process. A couple of years ago my supervisor and I were
considering changing the process of encumbering expenses. We were able to
utilize the test system to run several different scenarios and develop a
strategy. The final outcome was that the system did not perform the way we
wanted it to so we did not alter the procedure. But, the test system was a
great resource in navigating the systemic complexity involved in
decision-making.
One consequence of computer models at the college involves
the data. If the data that is input into the models is incorrect in any way
then the model could taint your decision. The computer model is only as good as
the data that is input, so college leadership must be careful with the data.
Hoch, Kunreuther, & Gunther (2001) stated that intuition should be paired
with computer programs to increase the chances of a good decision and their
information is useful in this scenario.
Like many organizations, Daytona State College has
many different stakeholders and decisions become complex when trying to satisfy
everyone involved. The stakeholders at the college include (a) the students,
(b) the faculty, (c) the staff, (d) the community, and (e) the Board of
Trustees. All of the decisions made by the college will not satisfy each group
of stakeholders. According to Rykrsmith
(2010), going in many different directions and trying to please all
stakeholders assures that you will not be moving forward, so you must decide
who you need to please in order to make good decisions. Our number one goal at
the college is the students. The college mission is hanging on a wall in every
department on campus stating that our number one goal is student success. In the pecking order of stakeholders at the
college, unfortunately, the faculty and staff bring up the rear. Hoch,
Kunreuther, & Gunther (2001) stated that companies should listen to their
stakeholders and that is what DSC did when creating the new computer system.
When shopping for a new computer system, the college
administrators made sure to put students first. In trying to please a large
range of stakeholders, sacrifices must be endured. I had the pleasure of attending several
meetings in which a demonstration for a potential computer system took place.
The leadership of the college always made sure to question how this process
would affect the students. Would it be a large learning curve for students to
access their online class or check their grades? There are modules that were
purchased that caused more work for the faculty or staff to limit the student’s
effort.
A consequence of having multiple stakeholders is not
being able to make a decision that will please everyone simultaneously. In the
example of the new computer system, a decision was made knowing that extra effort
will be put forth by staff and faculty. But, ultimately, the students are the
customers so the majority of decisions must incorporate the effect on students.
Environmental factors can also affect the decisions
made at a company. Theme parks such as Disney World and Universal Studios must
factor weather into their decisions. The traditional wet summers in Florida
(although the last couple of summers have been anything but wet) can affect the
decisions of an organization that relies on their customers being outdoors.
Insurance companies must worry about factors such as weather to roadwork.
Roadwork makes the roads more dangerous causing more wrecks and a greater
number of insurance claims. DSC faces environmental factors in the form of the
local economy and the weather in decision-making.
According to Chen (2016), community colleges see
enrollment soar in times of a bad economy. A bad economy (and increased
enrollment) can play a major factor in decision making. Between 2010 and 2012,
the central Florida economy had come to a standstill. Unemployment rates were
on the rise as vacant jobs were nearly non-existent. During those years, the
college saw an enrollment increase of nearly twenty-five percent. The college
made the decision to expand programs and hire additional staff.
Environmental and economic factors can have a
positive or negative effect on decision making, and as the saying goes, what
goes up must come down. When the local economy began to strengthen, enrollment
began to plummet leading to negative consequences for the college. The decision
had to be made to decrease staff and cut some of the newly added programs.
In Florida, one environmental factor that can lead
to complexity is the weather. Each year, Florida is threatened by multiple
hurricanes. The leadership at the college must play a deadly game of chicken with
the weather. The weather must be watched with intense focus to make decisions
regarding the canceling of classes. The decision-making process involves
productivity versus safety when weather threatens. The college has only closed
twice in my nine-year tenure due to weather. In the fall of 2008, we had an
unnamed storm heading directly to Daytona Beach. After what I can only imagine
as much deliberation, the college decided to close on a Wednesday afternoon and
reopen on Monday morning. After the decision was made, the storm did not do
much damage and the college could have stayed open.
Last fall the college once again closed for weather
and this time the decision was warranted. Hurricane Matthew was on a mission to
hit the coast of central Florida head on. There was a chance that my small
beach town would be devastated. The college decided to close and encouraged
students and employees to leave the area. Luckily, Matthew swayed just enough a
couple of hours before landfall to only sideswipe our area. The weather is an
environmental factor that always has a chance to influence decisions at the
college.
The three methodologies of navigating systemic
complexity, managing multiple stakeholders, and navigating environmental
complexity all play major roles in the decision-making process of the college.
It would be amiss of me to try to determine which methodology is more important
in the decision-making process of the college as they are all utilized in a
different manner.
References
Chen, G. (2016). Why student enrollment rises as the economy falls. Retrieved
from https://www.communitycollegereview.com/blog/why-student-enrollment-rises-as-the-economy-falls
Hoch, S., Kunreuther, H., & Gunther, R. (2001).
Wharton on making decisions. John Wiley & Sons, Inc.
Lewis, B., & Otto, D. (n.d.). Using computer models to help make decisions.
Retrieved from http://www.centurionconsultinglaw.com/arp47LAWOCT.html
Rykrsmith, E. (2010). Decision making with multiple stakeholders.
Retrieved from http://www.quickbase.com/blog/decision-making-with-multiple-stakeholders
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