Decision Making

In today's class we delved deeper into Problem Solving and Decision matrix. But we started from a different perspective. We were asked what elements management constitutes of? The graph below will summarize this concept.

This gives us a matrix of the four different styles of management. They are:

1) Individual Decision Making and Individual Implementation - happens only in single person business.
2) Individual Decision Making and Team Implementation - very common in hierarchical organizations.
3) Team Decision Making and Individual Implementation - rarely ever happens.
4) Team Decision Making and Team Implementation - very common in flat organizations.

This matrix helps us to understand WHERE the problems start from because problem are usually fundamentally linked to the management style.

There are four steps in the Problem Solving - Decision Making process:

Step 1: Situation Analysis. We need to do some valuing and we need to set priorities of what is urgent and what is important.

Step 2: Problem Analysis. This first needs information gathering from various sources both internal and external. Then we need to properly DEFINE the problem at hand.

Step 3: Solution Analysis. First we need to GET IDEAS. This can be from brain storming sessions. Then we need to MAKE A DECISION. By nature, both these are contradictory. IDEA GETTING is an expanding or selection process while the DECISION MAKING process is a contracting or eliminating process. Usually we use the Dialectical Method to reach a decision.

Step 4: Implementation. This is extremely important. Without this then all the decision making is an utter waste of time. We need to get others involved as they are also stakeholders and we need to make a proper plan for implementation.

Problem Solving

Many different concepts were discussed in this class. Hence, rather than writing about the class in a chronological order I have decided to give a summary of the important learnings from the various topics discussed in class.

1) Problem Solving (An Introduction):

The first and most important step in problem solving is IDENTIFYING the problem because unless we know a problem exists we cannot convert it into an OPPORTUNITY. Basically problem solving involves using generic methods, in an orderly manner, for finding solutions to problems.

The next part of the problem solving loop is to explore ideas and select an idea. This leads us to another important aspect of management called Decision Making.

2) Decision Making:

Decision making can be regarded as the process resulting in the selection of a course of action among several alternative scenarios. Every decision making process produces a final choice.

The output can be an action or an opinion of choice. But Decisions can be made in two ways : (a) Individually and (b) In a Group.

Individual Decision making is extremely fast and simple. It does depend on the structure of the organization. However the fundamental problem with Individual Decision Making is that is tends to be parochial. There can be severe bias in the process.

Group Decision making is a more systematic process to solve problems because a problem is EVERYONE'S not just of the one person making the decision. However it is not without its flaws. For starters it extremely Time- Consuming. There is also a very good chance of polarization in the group which can lead to too much time being wasted in taking the necessary decisions.

3) Job Design:

Job Design is the process of deciding the contents of a job. It fixes the duties and responsibilities of the job, the methods of doing the job and the relationships between the job holder and his superiors, subordinates and colleagues.

We must understand that Job Design is different from Organizational Design. Job Design is a MICRO level process while Organizational Design is a MACRO level process. How jobs are designed is very important and crucial to an organization. Jobs SHOULD lead to happiness and self-satisfaction which in turn MUST lead to high Productivity and better levels of Excellence. We can improve significance by giving incentives. Incentives need not be money alone. It could be recognition from higher management (like a photo with the CEO for the best employee.

Job design basically takes place by looking into 5 Aspects:
1) Skill Variant - If it is Low , Medium or High?
2) Task Identity - If it has Low , No or High identity?
3) Task Significance - Is the job least significant, most significant or of no significance at all?
4) Autonomy - does the worker have autonomy?
5) Feedback - how quickly will feedback be given?

4) Group Cohesiveness:

When discussing social groups, a group is said to be in a state of cohesion when its members possess bonds linking them to one another and to the group as a whole. Although cohesion is a multi-factored process, it can be broken down into four main components: social relations, task relations, perceived unity, and emotions.

Members of strongly cohesive groups are more inclined to participate readily and to stay with the group. The mental distances between the group shortens. Of course, some teams are more cohesive that others.

Three Idiots!!

There are many ways to learn about team work and managing a team but none quite as quirky as using a unique cartoon strip. The cartoon strip we used in class is shown below.




As a manager our task is to make this team of three "Idiots" to perform the sky-walk.

Let me first explain the three basic premises in this exercise:
1) Three people need to cross a deep "valley".
2) The distance between edges is more than one step but less than two steps.
3) Jumping from one side to the other and walking on a pole placed on the two edges is DANGEROUS.
4) The only item they have with them is a small thick pole/stick.

In the above exercise, each person faces 3 states of riskiness:
(a) Safe
(b) Half Safe/ Half Risky
(c) Risky

We should understand that in the course of the entire exercise the work done by each person is EXACTLY EQUAL. No one person does more work than the other. This is an important lesson in how we must DIVIDE LABOUR. Let us make a table and quantify the work done by each worker whilst in each of the three given states of risk.

We now can clearly see that the work done by each worker is exactly the same. We can also see that 66.6% of the time the worker is fully safe. In fact we could argue that the worker is actually safe 88.89% of the time given that Half Safe is also safe. Hence Division of Labour also share the risk and mitigates it. The work of a manger is to minimize the risk on each individual worker.

Now, what good is an example if you don't do it practically?!! That is exactly what we did. Prof. Mandi had actually arranged for a thick long pipe and we were going to try out the cartoon.

Organizational Culture

THE ALIBABA GROUP

We started the class with a discussion on the AliBaba Group. AliBaba Groupis a privately owned China-based family of Internet-based eCommerce businesses thatcover business-to-business online marketplaces, retail and payment platforms, shopping search engine and data-centric cloud computing services.

The company was started by Jack Ma based on the simple realizations that he had:

1. I don't have the money.
2. I don't have a plan.
3. If you can't use the internet in this age, you are useless.

What was Jack Ma's objectives with AliBaba?

(a) Empower SMEs through the power of the internet.
(b) At least 80% of these SMEs who are working with AliBaba MUSTgrow unimaginably.
(c) 0.0001% of the shares of AliBaba must be enough to support generations together.

What was the result?
Today AliBaba's consumer-to-consumer portal Taobao (similar to eBay) features nearly a billion products and is one of the 20 most-visited websites globally. Alibaba Group's sites account for over 60% of the parcels delivered in China.

ORGANIZATIONAL CULTURE
Organizations, just like individuals, have their own personalities—more typically known as organizational cultures. Understanding how culture is created, communicated, and changed will help you to be a more effective manager. But first, let’s define organizational culture.

Just as water is invisible to the fish swimming in it, yet affects their actions, culture consists of unseen elements such as assumptions and values that affect organizational life.

Organizational Culture encompass the values and behaviours that contribute to the unique social and psychological environment of an organization.

Organizational Culture is also called Corporate Culture. Organizational culture includes an organization's expectations,experiences,philosophy, and values that hold it together. It is expressed in its self-image, inner workings, interactions with the outside world, and future expectations. It is based on shared attitudes, beliefs, customs, and written (sometimes) and unwritten rules that have been developed over time and are considered valid.

There are various types of organizational cultures. We discussed a few of them in class. I am listing them below:

1. Open Culture - One where employees are motivated to voice their values-driven concerns regarding problematic business practices. An open culture helps to counteract any occasional lapse into passivity at the board level or on the part of institutional investors.

2. Safety Culture - One where safety is ALWAYS first no matter what the cost. A safety culture is one were all employees are proactive in ensuring safety at work place. People immediately report any perceived short comings in the work place safety and in the safety of products given to customers or clients.

3. Quality Culture - A culture where utmost importance is given to the quality of the product or service being rendered. Volume takes a back seat. So does cost. Batch recalling of cars/computers when defects are found is a good example of the quality culture. Toyota is a notable example.

4. Performance Culture - We could also call this OUTCOME ORIENTED CULTURE. This is one that emphasize achievement, results, and action as important values. A good example of an outcome-oriented culture may be the electronics retailer Best Buy. Having a culture emphasizing sales performance, Best Buy tallies revenues and other relevant figures daily by department. Employees are trained and mentored to sell company products effectively, and they learn how much money their department made every day.

5. Ethical Culture - A culture where great importance is given to ethical business practices and this importance is seen at all levels in the organization. We see that in such organizations, ethics are given precedence even if being so may lead to a loss of business and profit. The TATA Group is a good example to note.




There are three aspects to organization culture, namely :
(a) It is something that is practised by MOST of the people in an
organization.
(b) It is something that is practised MOST of the time.
(c) It is something that is DEEPLY believed by the employees.

Many thoughts about organizational culture came out in class. I am finding it a little hard to organize them into meaningful sentences and paragraphs. Therefore, I am giving these thoughts in point-wise form without any specific order or precedence. The various point we discussed where:

1. Organizational Culture leads to enhanced performance.
2. Organizational Culture is an important motivating factor.
3. Organizational Culture is depended on the type of structure which the organization follow. Flat Organizations have a different structure from more Hierarchical ones.
4. Organizational Culture is not STATIC. It changes from time to time.
5. Organizational Culture is invisible.
6. Organizational Culture is usually inferred. There is no book from where to read about it.
7. Organizational Culture - usually - is not documented. It is separate from the rule book. In fact, we could argue that if culture were to be written down then it would lose its impact.
8. Organizations can have multiple cultures of sub-cultures.
9. Organizational Culture can be WEAK or STRONG.

Mohammed Yunus and the Grameen Bank

Before coming to class we were asked to watch a video. Against all odds – for the first time in my life – I actually completed a homework before going to class!! Of course, there is a good reason why I watched the video. It was a speech by a person I was well aware of – Mohammed Yunus of Grameen Bank, Bangladesh. Before delving into what I learnt in class, I believe a small introduction is required.


The Grameen Bank is a community development bank started in Bangladesh. They give small loans (known as micro credit or "grameencredit" ) to poor people without asking for collateral.The system of this bank is based on the idea that the poor have skills but have no chance to use their skills without some money, that is their skills are under-utilised. Most of the banks loans go to women.


The Grameen Bank was started 1976 when Professor Muhammad Muhammed Yunus at the World Economic Forum. Yunus, a Fulbright scholar and Professor at University of Chittagong, researched how to provide banking for the rural poor. In October 1983, the Grameen Bank Project was made into an independent bank by the government.The group and its first member, Muhammad Yunus, were awarded the Nobel Peace Prize in 2006. Grameen Bank is owned by the people who borrow the money, mostly women. The borrowers own 94% of the bank, and the other 6% is owned by the Government of Bangladesh.

I am embedding the video we were asked see below. Watch it, it's worth your time. It will also give some context to what happened in class and the key learning I had.
Our class did not focus solely on aspects of social business. Instead – being a Principles of Management class – we focused on the difference in style of management and in delivery of product. We started out by discussing the difference between a traditional banking system and the Grameen micro-credit system. 

In my last blog, I wrote about Management by Objective and Organisational Structure. Both these contribute to another phenomenon –Organisational Culture. Basically, it is the behaviour of humans who are part of an organisation and the meanings that the people attach to their actions. Culture includes the organisation values, visions, norms, working language, systems, symbols, beliefs and habits.

The culture at Grameen Bank is to find ways to eradicate poverty. The Managing Director of the bank is not asked, “Why are Profits down?”. Instead he is asked, “How many people have you taken out of poverty today. It is precisely this culture that has allowed the Grameen Bank to achieve so much.

This is the most important take away from this class. It is theOrganisational Culture that motivates employees to perform well. It is the Organisation Culture that affects the way people and groups interact with each other, with clients, and with stakeholders. It is the Organisational Culture that gives the organisation Branding.

NavranG Puzzle :)

I have never seen the NAVRANG Puzzle before. So when Prof.Mandi bought one into class, I must frankly say that I was a little puzzled (pun intended). The basic objective of the Navrang Puzzle (as Sir told us) is to get all 9 colours on all 6 sides.

The Navrang Puzzle

Unlike a standard Rubik's Cube, the Navrang Puzzle can be dismanteled and reassembled. We were challenged to find an algorithm or method to reassemble the Puzzle in order to reach the intended objective. After a few desperately minutes of thinking a few fast thinking Samaritans devised a plan (I was completely lost!!). Unfortunately, the plan didn't work too well.

But then Prof.Mandi solved the Puzzle in about 2 minutes using an well-defined method. Sir had used a 3-step algorithm. It is here we were introduced to two important concepts: (a) Organizational Structure and (b) Unity of Objective. Before going on further about what happened in class, I believe a short introduction to these ideas are needed.

An Organizational Structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims.An organization can be structured in many Unity of Objectives different ways, depending on their objectives. The structure of an organization will determine the modes in which it operates and performs. This of course leads us to the next idea. Unity of Objectivesstands for the philosophy according to which every individual and every process in an organization should aim to fulfil the organization's Objectives and Mission Statement.

Now, leveing the jargon behind, let me continue with my experiences in the class. Prof. Mandi related the above two concepts with the structured solution he had shown for the Navrang Puzzle. Given below is a video of how to solve the Navrang Puzzle:

The most important step was to understand is that without an objective, this puzzle would never have been solved. It is the objective that determines the method in which we have to solve the problem. Any method we device, it must be capable of being easily replicated. Only then can we achieve economies of scale and get effective outputs.

Magnets!!!

Magnets are fascinating things. Every time we see a magnet we are tempted to plat with it. It was therefore a pleasant surprise to see Prof.Mandi walking into class with a chunk of magnet and ask us, “Why does a magnet attract?”. After many botched attempts by us at giving a good answer, one person in the class was finally able to say the right ward – Alignment.

A Magnet has its power because it can align innate magnetic forces in metallic atoms. So, magnets (or Physics for that matter) align natural forces . A Manager aligns human forces to get work done. In effect an organization is a force that is aligned. The bigger or better an organization, the more perfectly it is aligned.

Managers align people and power. They align tasks and objective. They synchronize both time and space. Management is Music, not noise. It is like the conductor of grand orchestra, where each instrument contributes to harmonious music. So here we come to a very important management lesson – Management by Objective.

Management by objectives (MBO) is a process of defining objectives within an organization so that management and employees agree to the objectives and understand what they need to do in the organization in order to achieve them. The term "management by objectives" was popularized by Peter Drucker in his 1954 book The Practice of Management.

The essence of MBO is participativegoal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and choosing the course of action to be followed by them, they are more likely to fulfil their responsibilities.

We ended our discussion by comparing two Indian Sporting giants and understanding why they were unable to cooperate and work. We concluded that the main reason was a skill set mismatch. Multiple skills COULD come as a disadvantage as the ability to exercise choice comes into the picture. Management should figure out which all skills to hone & nurture and which all to get rid of or discourage.

The most important take away in today's class is – without any doubt – the concept of MANAGEMENT BY OBJECTIVE.