The Burning Cost Approach
In the previous article, we have already seen how reinsurance policies are generally priced and what factors are taken into account while pricing them. There are certain specific methods and approaches which have been used by reinsurance companies across the globe for many years. These methods or approaches have now become a standard that is […]
Smart Feedback Communication Strategies – The Importance of Clarity
Receivers are not just passive absorbers of messages; they receive the message and respond to them. This response of a receiver to sender’s message is called Feedback. Sometimes a feedback could be a non-verbal smiles, sighs etc. Sometimes it is oral, as when you react to a colleague’s ideas with questions or comments. Feedback can […]
Pros and Cons of Catastrophe Modeling
Catastrophe modeling used to be considered very complex and difficult to use. Just a few decades back, most insurance companies were either unwilling to or unable to use catastrophe models. However, over the past couple of decades, the field of catastrophe modeling has seen rapid change. The increase in computing power has led to catastrophe […]
Role of Effective Public Speaking in Career Growth
Public Speaking refers to the art of communicating with a large audience. Public speaking definitely plays an important role in one’s career. Let us go through the role of public speaking in career growth: Being a public speaker indeed makes you a popular face in your organization. Let us go through two situations: Tom worked […]
Designing Failsafe Systems
Business Decision Making in the 21st Century We live in a world of increasing complexity and compression of time which means that the systems whether they are business structures, economic and political institutions, or even societal systems need to take into account complexity and increased interconnection along with reduced time to react and acceleration of […]
Any decisions taken at any level have to take into account the conflicting needs of the individuals who are affected by the decisions and hence conflict resolution is a part of the decision making process. How well the conflicts are resolved depends on the skill and leadership traits of the decision maker.
After all, any decision that is taken is to balance competing interests and is essentially an allocation of shared resources among the different groups.
The point here is that in any organization there are scarce resources that need to be allocated among competing groups and hence the decision maker has to ensure that all the needs and concerns of the different groups are taken into consideration when making the decision.
Since most decisions involve some emotional component as well, the decision makers have to be especially sensitive to the needs of the people who are affected by the decisions.
Consensual decision making ensures that most concerns of the different groups are heard and taken into account. However, in the real world organizations, decision making by consensus might not be feasible since each group has its own agendas.
Hence the decision makers have to ensure that the decisions that they take involve some amount of consultation and some amount of overriding the individual agendas. The reason being that though individual concerns can be taken into account, the decision makers have to keep the interests of the organization in mind and hence proceed accordingly. This is needed so as to prevent individuals and groups hijacking the decision making process with their agendas.
In most organizations it is common for the decision makers to elicit as much information as possible from the individuals and then only take the decision so as to provide balance and grievance redressal to the affected parties.
As this article has discussed, conflicts are inevitable when decisions are taken and the best way to deal with conflicts is to resolve them to the satisfaction of the aggrieved parties. However, this is easier said than done in this competitive world where nobody is willing to lose out on lucrative resources and forego their chances.
So it takes quite a bit of skill and managerial abilities not to mention leadership traits to ensure that the decisions result in amicable settlements among the competing groups.
The point here is that while it is not possible to please everybody, it is possible to give them a fair hearing and be patient with them so as to give an impression of consensual decision making.
In extreme cases when the competing groups do not agree or abide with the decision, it is left to the higher-ups in the organization to play the role of peacemakers. This is the process of appeal to the senior management as part of the concerns and grievance redressal. This is an essential component of the decision making process in organizations and only when there is active recourse to appeal can true decision making work.
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Why the Digital Age Demands Decision Makers to be Like Elite Marines and Zen Monks
February 12, 2025
