Effective Decision-Making and Conflict Resolution in Business

Decision-Making in Organizations

Decision: Decision-making is the process of making a selection between two or more courses of action with different outcomes, in order to reach the optimal choice.

Types of Problems

• Structural: Related to organizational structure.
• Situational: These appear sporadically, outside of the usual operations.

Typologies

• Individual: Taken by a single person.
• Group: Taken by several people.

Le Moigne's Levels of Decision-Making

• Level 1: Decisions made by the upper hierarchical level of the company.
• Level 2: Reversible decisions, taken by middle management.
• Level 3: Decisions related to daily operations.

Traditional Decision-Making Approaches

• Programmable: Decisions taken on habitual matters.
• Non-Programmable: New decisions taken when situations are not foreseen.

Decision-Making by Approval

• Authoritarian: Imposed decisions.
• By Majority Vote: Approved by the majority.
• Unanimity: Everyone agrees.

Factors Influencing Decision-Making

• Rationality: Decisions can be based on rationality or intuition.
• Experience: Decisions can be based on past situations, events, and custom.
• External Factors:
  • Stability
  • Risk
  • Pressure
  • Time
• Internal Factors:
  • Mental attitude
  • Aptitude
  • Skills
  • Personal and professional experience
  • Culture

Development and Phases of Decision-Making

1. Approach and definition of the problem.
2. Study of the problem and setting objectives.
3. Analysis of alternatives and selection of appropriate solutions.
4. Putting the decision into practice.
5. Monitoring of results.

Centralized vs. Decentralized Decisions

• Centralized: Responsibility rests with a single person or a small group.
• Decentralized: Shared responsibility.

Conflict Resolution in the Workplace

Conflict: A confrontation between opposing ideas and reasoning among several people. It is a matter discussed from two different perspectives.

Causes of Conflict

• Unclear division of work responsibilities.
• People with different interests.
• Differing values.
• Clashes between members.

Types of Conflict

• Individual: Between worker and employer.
• Group: Between workers.
• Legal: Different interpretations of the law.
• Economic: Conflicting interests.
• Positive: Positive result for both parties.
• Negative: Parties become more distant.

Phases of Conflict Resolution

1. Approach and definition of the conflict.
2. Study of the causes to create solutions.
3. Choice of solution.

Variables that Influence Conflict Resolution

• Pressure
• Time
• Experience
• Risk
• Complexity
• People involved

Peaceful Conflict Resolution Methods

• Reconciliation: The parties initiate a dialogue to reach an agreement. The people involved are not required to propose a solution.
• Mediation: An outsider intervenes, providing information and proposing solutions.
• Arbitration: A third party has the obligation to adjudicate the dispute.