Bill Hackos, PhD
Vice President, Comtech Services, Inc.

When things were booming in the high-tech industry, we could make a lot of management mistakes that went unnoticed because sales were great, profits were great, and the world was wonderful. It’s now 2003, and the world has changed. All our employers are struggling to make a profit, and many are struggling to stay in business. We as managers must do the best job possible to support our organizations. We can’t afford to make the mistakes that were inconsequential in good times.

Managers commonly make mistakes when they are making decisions, whether they are dealing with their own staff or with outsourcing organizations, when they allow personal relationships to interfere with rational decision making. These mistakes can have a negative impact on the well-being of their companies.

We are human. All decisions we make are affected by human relationships. We must constantly review our decisions to determine if they are in the best interest of our organizations or if they are instead made to advance our own personal relationships.

JoAnn and I have been lucky enough to view the workings of hundreds of companies during our 20 years as consultants. We find that each organization has its own unique culture. However, we can place organizational decision making into at least three groups:

  • Hierarchical—In a hierarchical organization, decisions are made by a few individuals or even by a single individual with little if any input from most of the organization’s members. Kings, dictators, some presidents, some CEOs, and many managers make decisions in this way. Many times the decision makers are not well informed. Sometimes staff may shield them from information that would contradict their decisions. Sometimes decisions are made based on the personal welfare of the decision maker.
  • Pluralistic—In a pluralistic organization, decisions are made by consensus. Democracies, voting blocks, communes, many volunteer organizations, and many for-profit companies are pluralistic. In pluralistic organizations, decisions may be made by many who are uninformed. Expert opinion is often discounted. Many times, these organizations can be manipulated by individuals or groups for their own gain.
  • Rational—Rational organizations are optimized somewhere between hierarchical and pluralistic. Decisions are made by those most responsible and accountable for the decisions with broad input from the group. Decisions are made for the good of the organization, not for the personal welfare of any member.

As managers, we want to ensure that our decisions are made rationally for the good of our organizations. Each of us should make a careful assessment of how we and our organizations make decisions and modify that process if necessary.