The purpose of this study is to investigate how decision-making and execution aid in business performance. Substantial literatures present the significance of managerial decision-making to business practices as an act that depends on how the decision is made and executed. Some studies show that engaging all the team-members in decision-making helps to introduce better and innovative ideas to the group, as well as motivate and increase morale of the team to perform. On the other hand, some show that engaging all team-members in the decision-making process is time-consuming for execution.
Scope of the study
The scope of the study addresses the following key areas: the decision-making process, the significance of execution and examples of business teams that execute, and the biases that occur in decision-making.
Significance of the study
This study is of significance to the researcher because as a professional football coach, knowledge about the best way of creating a performing team is required. For the purpose of creating a performing business team in the current business environment, the decision-making process should engage every team-member, and the leader should ensure execution of the strategy to completion. The current environment is very competitive and a winning team is that which develops strategic decision- making. The dilemma is that various studies show that decisions that are executed in speed are likely to boost the competitive advantage of a business team. However, it is shown that for a good decision to be made, participation of team-members is important, yet this can jeopardize the speed at which the decision is executed.
This research will therefore provide insight to other team managers who can use the information to create the optimal decision-making and execution strategy that will push their teams to performance.
The review of literature takes place in the following dimensions: first, the definition of decision-making; second, the importance of execution in business; third, example of business teams that execute; and fourth, the biases influencing business decision-making. The factors discussed are framing, motivational and emotional commitment, escalation of commitment, fairness in decision-making, and understanding biases. Data is gathered from a variety of literature sources including journal articles and books that report on the issue.
Definition of Decision-Making
Decision-making is a necessary managerial function. Morgeson and Lindeorfer, (2010) define decision-making as a cognitive or mental process that result in the selection of an action course appearing among several alternatives. The ultimate purpose of a decision-making process is to produce a final choice (Skarzauskiene, 2010). Decision-making is a process, (See appendix A) that initially involves diverging ideas for the purpose of exploring possibilities, and converging to a solution (Chong, 2007). See appendix B. Decision-making involves cutting out from the alternatives and establishing the specific idea to be followed (Ali, Chen, & Lee, 2008). Decision is the key to transformation and shows that a person understands a reason to an action. According to Nihalani, Wilson, Thomas, and Robinson, (2010) decision is one of the basic character traits that distinguish high performers from the vast mediocre. Behind every great achievement, a decision was made and executed. Beilock & Carr (2005) also argues that the quality of decisions drives the success of the business and therefore good decisions mean good business.
The decision-making process involves a variety of steps (Ball, 2010). First, the leader needs to outline the goals and outcomes in order to enable the decision makers to precisely see what they are attempting to accomplish and stay focused on a particular path (Ball, 2010). Second, the decision-making process involves the gathering of data that can enable the decision-makers to have actual evidence to assist them to come up with a solution. According to Ball (2010) there are two types of managerial leaders; the thinker and the feeler. The feeler uses reason and logic to guide the decision-making process and this is usually a good feature because evidence is used to back up any claims made. On the other hand, the feeler uses emotions and subjective judgment to place conclusions. Ball, (2010) asserts that as much as intuitions can assist in passing good judgment, they should not be used over factual judgment. The third decision-making step is to brainstorm in order to develop alternatives and find out which solution works out best (Ball, 2010). The fourth step is to enlist the pros and cons of each alternative and eliminate the solutions basing on the magnitude of the cons (Ball, 2010). The fifth step is to make the actual decision after analyzing each solution and picking up the one that has more pros than cons. Sixth, execution of the decision should take place immediately. A quick implementation of the decision enables the business to stay ahead in competition (Ball, 2010). The seventh step in decision-making is to learn from, and reflect on the process of decision-making. The reflection step enables the managerial to identify the faulty parts, the correct parts and the putting of the decision into use.
According to Kesler and Kates (2010) the executive can assist the design process of effective decision-making in various ways including defining the right problem, use of effective design frameworks, involving the right people in the process, tying the talent and the organization together, and implementing the change. There are various design models that can be used to involve the people in the decision-making process. These include the expert model in which the leader works with a very small group of advisers and either an external or internal consultant. The executive team may not be aware of the work being carried out by the leader. Nevertheless, the leader makes a decision and the selected group carefully orchestrates and creates communication and launch plans (Kesler and Kates, 2010). Another model involves the executive team which works closely with the leader in order to develop and evaluate options. According to Kesler and Kates (2010), this model works well if the executive team is effective in making quick decisions. The other model is the delegated design team in which the executive team identifies a group of high potential employees at lower hierarchical level and assigns them the task of exploring the design options. The team therefore presents a set of alternatives and recommendations back to the executive team for review. The other model is the multi-level design team in which the design team is composed of mixed members of executive team and managers and employees for the purpose of availing the best input and overcome the problems that result from the other models.
Decision making is a very important aspect in the life of a human being as it is what determines their failure or success. Decision making is highly based on the resources and therefore if the resources are unavailable or limited, the decisions made will involve opportunity costs. The key components in economic thinking are scarcity and opportunity costs. Due to the scarcity of resources, individuals have to forego some of resources in order to incorporate other new ones which will bring more benefits.
Economic analysis is considered to be a science of rational decision making in the world of limited resources. This situation confines people to think rational due to the scarce resources and the unlimited wants available. Cost benefit analysis is a technique that is used to determine whether a certain planned action is effective or not. In this analysis, the benefits should be more than the costs incurred. If there is a change that needs to be made and the change is greater than the costs, then the change should be implemented.
The analysis requires that the companies change the costs and the benefits into monetary value so as to be able to assess accurately for the choice to be made.
It is also very essential that the business entities or companies carry out a risk assessment so as to identify the risks involved in the choice they have to make. If the risk is too high, it is advisable not to go for the change as it may cause more damage than there is. For the rational decision makers, they need to understand the importance of the time factor so as to avoid making the wrong decisions. This is part of risk assessment as one is able to determine the risks involved in a certain situation
Explain the importance of execution in business
Execution refers to the step in which an action is taken from the decision made. Execution is said to represent the result of performance. Execution is therefore the most important step of the decision-making process and it has been termed as a critical aspect to success by several managers especially in the current highly competitive business environment. Execution involves the act of beginning and carrying a plan through to completion (Bauer, 2006). The business environment today faces volatility and high competitive pressures that have resulted with technology advancement, globalization, and diversity, among others (Welborne (2006). To succeed, businesses have to be able to execute in order to react quickly to the changing business chances and technologies. However, many managers admit that it is almost impossible to achieve execution. If decisions are made and not implemented, there would have no need of carrying out the decision-making process in the first place. Bauer (2006) asserts that many managers find easier to plan but they lag when it come to putting the plan into action. Execution should take place in a quicker and efficient way. Execution fails to deliver success because either the execution was not done or it was done with sub standard efforts. Kesler and Kates (2010) point out to the factors that affect the execution of the laid strategy. First, the culture of the organization and its appropriateness for future challenges determines how smoothly execution is carried out. Depending with the culture of the organization, change is embraced or resisted. Second, the incentives and rewards can drive execution. Kesler and Kates (2010) further argue that it is likely for execution to be conducted appropriately in firms in which people are rewarded for performance and competitive achievement as opposed to where reward is based on the length of time that an individual stays in the business. Third, execution is hindered by rigid traditional functional ways of performing things in the organization structure. To become a great business execute, such rigid rules have to be broken at times. Fourth, the challenges inherent in change management as a team adapts to new competitive conditions also affect change. Wener and Davis (2007) also assert that conflicting organizational activities, redundant processes, silos, and confusing governance policies hinder effective consistent execution.
Welborne (2006) there are several aspects that determine the gap between what needs to get done and what actually gets done. To successfully achieve execution, Welborne (2006) gives the various suggestions. First, that the management should conduct workshops to highlight the invisible. This is because the unseen little things that the management does not know about the outsourced or the off-shore-bound business process that creates the biggest of problems. Experiential workshops should provide an opportunity to deeply analyze the objectives, requirements and the business processes to be outsourced. Welborne (2006) argues that such a step would enable a manager to avert disaster and prevent loss of resources. Secondly, a proper business execution occurs when the bridges between everyone involved in the execution process are connected. At times, a single team’s perspective of performance could be different from that of other teams or different to the entire organization requirement to success. As a leader, a strategy should be worked out to ensure that despite the differences in the culture of the teams, they are all working towards a common goal of success. Third, the manager should allow different kinds of partnerships and outsourcing relationships with the various stakeholders that are involved. Execution does not require a one-size fits all mentality and all stakeholders should be allowed to work in the best innovative way possible as well as maintain good relations. Fourth, the execution process should not only be about managing costs but should be a balance of both managing costs and increasing value. The need to increase value stems from the current environment of changing consumer preferences in which value is insisted. Other than value of products, the customer value is important, and therefore execution has to be done in a way that the outcome is of value to customers.
Finally, there should be a committed follow up of the execution plan and loopholes should be identified early and filled before they widen. Additionally, if an objective fails to align to the expectations, the decision-making team should always be ready to get back to the drawing board and reflect on a better strategy. This requires that the managers become appreciative of flexibility and visibility.
Examples of business teams execute
According to Kesler and Kates (2010) managers today understand the importance of organizational capabilities to compete, although many are less clear on how to create these capabilities. Managers today are required to align components of the organization to execute strategy and eliminate barriers so that the people in the organization can make the right decisions and give their best performance. A leader today needs to have the ability to inspire individuals, and guide team-work. Teams should execute for the reasons that there is global expansion and competition is now made up of more sophisticated players. Additionally, the business models are changing and there is need to manage a portfolio of varied business models. Moreover, innovation increases in both business process and product and therefore there is need for businesses to innovate in order to attain a competitive advantage. Furthermore, there are efficiency pressures to increase volume, reach and capability without necessarily adding overhead expenses. Kesler and Kates (2010) gives the example of IBM in which complexity in the organization resembles the complex strategy that the organization designs to be executed. IBM is able to execute many projects at once through a web of structure, the business process and the human relationships and the design is very difficult for the competitors to copy. This already awards IBM a competitive advantage.
According to Magni Proserpio, Hoegl, & Provera, (2009), teamwork is the vital ingredient to make things happen in any given organization. However, for the teams to perform, they must be empowered to do so. A leader should be able to respect, encourage, enthuse, and care for the employees rather than exploiting or dictating to them (Hutt & Speh, 2007).
Business teams execute is demonstrated in the Motorola company in which a team of engineers and designers defied the rules set by the firm to create the RAZR VR phone that has since been considered as one of the most innovative phone technology from the company (Lashinsky, 2006). Expectedly, the team’s defiance was forgiven and the team mates were rewarded. Frost, the team leader that had geared for the change was even promoted to executive vice-president but unfortunately he passed on. There are more examples of team executes whose initiative to conduct the strategy to completion has placed the firms to where they are today. Fortune magazine (2006) reports on the desperate situation that Ford faced after losing $1.5billion in 1980 after a car model going awry. However, a group of about 400 engineers, designers and marketers were put in a room and set loose to think on their own. The brainstorming resulted to escalating Ford back into business and the model Taurus was named as car of the year in 1986 by Motor Trend. Holloway (2009) discusses about the SAP Design Services Team that was created to improve the design of the SAP software solutions as well as provide the firm with the means to scale up its adoption of design thinking, an aspect of an interdisciplinary nature. SAP is now considered one of the best in the business of software solutions and this is attributed to the ability of letting the team contribute to innovative decisions as well as learning from mistakes.
Biases influencing business decision making
The framing and carrying out of the decision-making process may be subject to bias as a result of various influences (Cross, Thomas & Light, 2009). Decisions can either go bad or good depending on how they are made. Cross, Thomas and Light (2009) argue that bad decisions and poor decision-making processes are a big drain to the management time and they waste precious resources that may not be detected by the balance sheet but put a serious crimp on innovation. Historically, researchers strived to understand the reasons for decision failures and came up with problems that are inherent to small groups and these include bad chemistry, failed group processes, ineffective leadership, and groupthink among others. However, psychologists have also highlighted the cognitive biases such as over-confidence, which influences the quality of the decision made. One’s own mind can become the enemy in decision-making. The following section discusses the various biases that influence decision-making and these are framing, motivational and emotional commitment, and escalation of commitment, decision-making fairness, and understanding biases.
Framing the question is usually the first step in making a decision. However, this step is also the most dangerous step in relevance to inviting biases and subsequent poor decisions. The way the question or the problem is framed can profoundly affect the choices that are made. The framing trap takes many forms and is closely related to the psychological traps (Ioannis, Damianos, & Nikolaos, 2009). Depending on how the problem is framed, the sunk costs can be highlighted or the leader may be guided into confirming the evidence. Frames can distort decision-making with a particular frequency in the various ways. Frames can be presented as gains versus losses in the decision-making process or as framing with different reference points. In the gain versus losses the leader presents the problem and provides choices that point on what the firm will gain or lose when a particular choice is made. On the other hand, presenting framing with different reference points provides evidence as to where the decision-makers can get evidence of a proposed problem or solution. A poorly framed problem undermines even the best considered decision while a well-framed problem enhances the making of a good choice.
Adverse effects of framing can be reduced taking precautions such as avoiding to immediately accepting the first frame, regardless of who formed it and trying to reframe the problem in various ways. By doing this the leader is able to look for, and identify the distortions caused by the frames. Another way is to try and pose the problem from a neutral angle in a redundant way that combines gains and losses or embraces various reference points. Next, the leader can avoid adverse effects of poor framing by thinking hard throughout the decision-making process about the frame. While doing this the individual should be considering how thinking can be changed with various frame models. When the other members recommend decisions for a particular frame, the leader can challenge them with a different frame and find out the extent to which the decisions alter (Davenport, 2010). This will not only lead to picking up the best frame, but also to get the best decision at the end.
Motivational & emotional commitment
Decision-making is considered a psychological construct in which the observable behavior shows whether a decision has been made. However, to make a good decision, the facts need to be weighed objectively such that the decisions are made on a rational and thoughtful perspective. Nevertheless, it cannot be denied that sometimes personal biases sometimes influence situations that require careful judgment. Motivational and emotional commitment is the mental stimulation that can enable a team to persist with a decision even when it is doomed for failure. Depending on the degree of logic that is included in the decision-making process, involvement of emotion instincts on choices cannot be denied. However, decisions that are made very rapidly are said to rely entirely on emotions than the ones which are delayed as issues are being rationally assessed. The emotional instinct is faster than the logic instinct and it the most commonly used in high temperaments or emergency moments. Some emotional decisions may use logic but emotion is the main driving force and this uses pseudo-logic to support emotional choices. In some cases, people begin with logic but use emotion to make the final choice. Beilock and Carr (2005) argue that emotions and motivation should be used in getting closer to the stakeholders and making them believe in you but logic should always be the guiding factor to make a decision.
The escalation of commitment
Escalation of commitment refers to the tendency to stick to a course of action even in the event of availability of information concerning its viability. Sometimes the decision is doomed for failure but commitment to follow its execution is seen in the leader.
Persistent decision is dependent upon the manager’s level of either intrinsic or extrinsic motivation. Escalation of commitment can be used to explain a variety of organizational issues such as reinvestment decisions on capital budget, and underperforming technological projects among others. Escalation of commitment in failing decisions can result to sunk-costs and this can be prevented through getting views from neutral perspectives and accepting that mistakes can be made but a change of course of action is worthier.
Fairness in decision making
Fairness in decision-making means avoiding giving disproportionate weight to the first information that is received. Fairness in decision-making involves weighing proportionately all the available alternatives and logic reasoning is much needed to make a fair decision. No matter how easy the decision seems to be, the leader should always seek information from a variety of people or sources even after a personal-thinking through the problem. To ensure fairness in decision-making, all the evidence should be examined with equal rigor.
Understanding biases enable the leader to prevent those influences that may lead to poor decisions. On the other hand, it enables the leader to accentuate the biases that lead to the best choices. Nevertheless, a thorough examination of facts, arguments and experiences are required in order to make a good choice.
Application of Findings to Management of Sports, and Conclusion
This research highlights both the pros and cons of decision-making and execution of plan of action. It is seen that decision-making and execution is vital for performance of business teams. However, the two processes are not without challenge.
The advantage of a properly made choice and its execution is that the business is able to attain a competitive advantage and in the process boos the morale of the team members who will work even harder to maintain or improve the performance. On the other hand, poor decisions of failure to execute even a properly made decision results to failure and loss of motivation and business resources. The lessons learnt is that people must learn to separate their instincts from the actual logic needed to make a decision and this can be a challenge especially where the manager does not understand biases, or has a naturally higher emotional control.
The following questions may be used to address future research:
Most of the findings of this study are applicable to football management. The research is of great benefit to a football coach in which the profession requires that decisions affecting the team are geared towards performance. Football is a very competitive area of the athlete professions, and usually, the team’s performance is linked to the coach’s ability to drive the football team towards success. First of all, the findings reveal that the manager is the major influence on the direction that the decision-making process will take. The lesson learnt is that as a manager, decisions should be made based on logic as opposed to emotions. However, to connect to the team in a humane way, emotional reasoning can be included in the process.
Football sometimes requires decision-making and execution of skills under pressure and this includes in the playfield when the team seems to be losing grip and thus substitution decisions have to be made quickly and efficiently. As a coach, the decision made should be one that assists the team to gain a better competitive hand rather than cause further loses. A coach can apply the escalation of commitment only when there is certainty that the team will pick up on performance during the play and beat the opponents. Nevertheless, the coach can consult with other advisors who are experts in making quick but effective decisions on the proper step to take. In some of the matches that play, the coach’s decision to substitute a member of the group has resulted to unanticipated victory against the opponent. Nevertheless, sometimes, a coach can carry out a substitution of a player as an act of enhancing team togetherness in which each member feels that they are regarded as important members of the team. This alone can be a motivational factor toward performance.
Through the research, it is discovered that a leader who connects well with all members of the team is likely to learn their weaknesses and strengths and therefore be able to award every member roles depending on their strength. Decision-making skills can therefore be applied in deciding on the kind of players to put in every field position for the purpose of performance achievement (Martin, Parrant, Psotta, 2005).
The research has also been useful in showing that as much as the coach is the provider of guidance for the team; the team members can also be allowed to come up with suggestions on how to improve the team’s outlook and performance. This role requires a motivational rather than an autocratic kind of leader. For instance, during training, the coach provided guidance but should at times leave the players to identify better tactics that can be used against the opponent. Skill execution such as how to pass the ball through deception of an opponent, or how to overcome being tackled or chased can be best made by the players especially if the skills made them win in a similar environment with a particular opponent. Nevertheless, flexibility should be learnt and there is always need to change the tricks and tactics depending on how the opponent has discovered them or how the team has discovered that of the opponent.
Intra-communication between players can promote decision-making. Once a coach puts players that have a great understanding of the game collectively and know the requirements of their roles compared to the other team members, decision-making improves rapidly. Knowledge is synonymous with tactics that the football team uses against the opponent but through team-togetherness, this knowledge is shared and in turn yields better performance.
For a successful and highly performing football team, decision-making precision and skill execution are required. These can be gained from engaging the team members in the decision and execute process as well as providing encouragement and support.