Decision-Making and Organizational Learning

Individual Analysis and Application Paper CRN 2501: Seminar in Organization Theory & Behavior Chapter 15: Decision-Making and Organizational Learning Microsoft Corporation Student: Xiaoguang Liu (Jack) Instructor: John C. Sivie 5/10/2011

Decision-Making and Organizational Learning Abstract This paper will provide an overview of decision-making and organizational learning. There are two major points will be covered that are types of decision-making and decision-making process. This

paper introduces the processes that will help improve the quality of your decisions. On the other hand, by use Microsoft Corporation as a case study to explain how they become one of the most phenomenally amazing companies in the world. This paper will extend several main events about Microsoft Corporation to support how do they make right decisions during the appropriate time. Finally, the conclusion will state a brief summary that concludes the relationship between decision-making process and better decision.

Decision-Making and Organizational Learning Introduction All of us have to make decision every day. Decision-making can be defined by mental process that leads to the selection of an action among several alternatives. A final choice will be produced after each decision making process and the output will be an action or an opinion of choice (Reason, 1990). Whether the work of managers, scientists, engineers, lawyers, or the work that lead the course of society and its economic and governmental organizations that all involves making decisions and solving

problems. Good decisions can help individuals, group, or organization to achieve their goals and solve the problems. Oppositely, bad decisions will block the goal attainment and lower the performance. Types of Decision-Making According to the outline from Bowett (2010) introduce that in terms of business management are complex and diversiform in current organizations that result in the operation management decision having many different types of decision-making. According to different range of influence and different degree of essentiality, the decisions can be divided into strategic decision and tactical decisions. Whether responding to a potential opportunity or deciding how to solve a problem, decisions can divide into programmed decisions and non-programmed decisions. The last type is operation decisions. 1. Strategic decisions & Tactical decisions Strategic decisions are related the long-term strategy and goals of business. Such as the decisions are about operating direction, guideline for management, or new product development in an organization. These decisions are often making from top leader and it usually related the future of organization whether successful or not. Tactical decisions are more focus on medium-term that help the long-term strategic to achieve the goal. Such as, the decisions about purchase of raw material and equipment, or production plan and marketing plans. These decisions are often making from middle managers. (Bowett, 2010). 2. Programmed decisions & Non-programmed decisions Programmed decisions are establish decision making to resolve the problems with established goals and channels of information. Many problems occur again and again in organizations. Hence, the managers need to solve these problems by use common practice. Non-programmed decision-making occurs in opposite conditions than programmed decision making. The non-programmed decision usually has less information, poor structure, or vague goals. There are no more experiences to help managers to make decision when they meet non-programmed decision and it often different from any previous or standard decision (Linda, 2010). 3. Operation decisions

Decision-Making and Organizational Learning Operation decisions are the short-term decisions about how to implement the tactics and it also called administrative decisions. These are not one-off decisions or unstructured decisions, but it can be highvolume, repeatable, explicit decisions. These operation decisions could be part of operating a transaction or handling an interaction and no one has ever considered before (Taylor and Raden, 2008). Decision-Making Process When people need to think of decision making in organizations, some steps they need to prepare

to support their decision. There are many researchers have been advanced some different process that help decision maker to make better decisions. A good manager or leader must has ability to making right decision, if a manager or leader who is poor in decision making is fit to be called only an administrator and not a manager or leader. Sometimes, the decision-making may easy to saying yes or no in some case, but it still hard and complicate to taking these decisions. According to the Rajan (2010) advanced that a professional manager should choose how to respond to opportunities and problem by following these six steps: 1. Problem definition A decision maker needs to be absolutely clear the problem they are trying to reach a decision on before they start to take any decisions. For example, managers or leaders may need to consider whether to implement a separate company for the purpose in a new name, at a new infrastructure or create the new products in the established one (Rajan, 2010). 2. Collecting information Much information will relate to decision-making process. For example, the information may cover potential market, availability of funds and profitability related facts. These kinds of information should already done while the manager or leader make decisions. The sources of technology, relative costs, relative reputation, benefits and limitations also need to be considered as important information for the decision maker. In collecting information, some resource may have limit or even some information are inadequate and incorrect. Hence, decision maker has to calculate risks where the data or resource cannot be collected accurately (Rajan, 2010). 3. Identifying alternative choices An alternative is to get clear on the ideal outcome and use this ideal outcome to inform the choices. For example, the government may give some subsidies or special tax benefits for one place, then the company should chose this place to build the plant, not other locations (Rajan, 2010). 4. Seeking opinion

Decision-Making and Organizational Learning As a decision maker has to explore different perspectives when they meet various choices. Those people who give the opinions can be peers, team, superiors, or even family. Even these perspectives cannot be clearly to help make the final choice, but it still can offer some potential inspirer. If a decision maker think their know it all can seriously impede the decision making process (Rajan, 2010). 5. Pondering over the facts, figures and opinions

For a good decision have another important thing that a period of judgment reserved. A decision maker has to spend times to digest all the information collected and let them sink into sub-conscious mind before make the decisions. When the manager meet the emergency situations may not have extra time to consider about that, but a reasonable time spent here will prove its worth in the long run (Rajan, 2010). 6. Decide and act Once the decision maker gone through the previous five steps, deciding on the best choice or a couple of best courses of action and make it happens. Once a decision is taken, that means no more adjustments. Therefore, making up the mind and think clearly what the best consequences be desired and then take place with the final decision and do not be flabbiness (Rajan, 2010). If decision makers follow these six steps, they will make optimal decisions. However, these steps may not be totally followed by decision maker. The reason may they do not have enough experience for take any kinds of these six steps, or they cannot ensure each of information is accurate or not. Therefore, many bad decisions seriously result in organizations incurred loss. On the other hand, good decisions can increase work efficiency and material benefit and lead organizations become more successful. The Introduction of Microsoft Corporation According to the date from (2006) GAR accountability profile for Microsoft Corporation, over 95 percent of the worlds computers run on Microsofts Windows operating system (n.d). The other software programs of Microsoft still are used by hundreds of millions of people all over the world. Microsoft products include Windows operating system, Office applications including Word, Excel, and Access, Windows Server, web development tools, Internet resources, and business solutions software. It also has covered the cable television market with MSNBC as well as developing MSN Internet portal and the Microsoft Encarta encyclopedia. In order to obtain profit from gaming market, Microsoft developed the Xbox and currently challenges the market leader Sony with the new Xbox 360 console (Microsoft, n.d). Microsoft founder by Bill Gates and Paul Allen in 1975 and it headquartered in Redmond, Washington, U.S., with offices in another 105 countries. It employees approximately 89,800 and Microsofts revenue reached $60.4 billion in 2008, earned more than $17.68 billion in operating income

Decision-Making and Organizational Learning in 2008. Consistently ranked by Fortune magazine as one the Worlds most Admired Companies and among the top 50 largest companies in the United States (Batchelor, 2008). Microsoft cannot be so successful without huge amounts of good decision-making in nowadays. There are several important events also essential decisions for the Microsoft during these decades. 1. 1984-1994: Windows and office While Microsoft and IBM developing a new operating system together in 1984, Microsoft decided to released Microsoft Windows, a graphical extension for MS-DOS, on November 20. In that time, the personal computer was in the preliminary period. However, Gates thought this is a super opportunity, hence he and his team get started with this amazing development and the Windows develop very fast in following years. After that, Microsoft led to the introduction of Microsoft Office in 1990, this software bundle help to business to improve productivity, it including Word and Excel (Allan, 2001). These two essential events make Microsoft soon became the market leader, far surpassing its closest competitors. They seems always know what the world need. 2. 1995-2005: Internet and the 32-bit era Microsoft began to work on a product line into computer networking and the World Wide Web in 1995. Gates and his team think about if there is a thing that can connect people all over the world and share the information by Internet? They decide to create the things, which are Internet Explorer and online service MSN. Meanwhile, they created a completely new user interface with a novel start button, and 32-bit compatibility (Borland, 2003). The explosion of these two products in the 1990s initially caught

Microsoft off guard. They extend their amazing creativity to the world very quickly, and practically there is no one competes with them because they are first one and only one in that time. 3. 2006-present: Vista and Windows 7 Microsoft released Windows Vista in January 2007, focused on features, security, and a redesigned user interface dubbed Aero (Vamosi, 2007). In 2008, the company released a product Azure Services Platform and let the Windows joined into the cloud computing market (Fried, 2008). After they released Windows Vista in 2007, many negative feedbacks appeared from users. The main reason is Windows Vista makes operating rate goes slowly. While Microsoft met this problem, they have to make decisions to solve this problem. The final idea come up with them is that decide to shorten the release time of new Windows. Hence, they released Window 7 on October 22, 2009 (Mintz, 2009). Windows 7 is the latest release of Microsoft Windows. 4. Xbox

Decision-Making and Organizational Learning Microsoft always knows how to dominate the new markets. Obviously, they always can keep winning during most of competitions. They have never afraid of challenge and they always like to meet new challenges, because Microsoft has amazing creativity forever. Hence, there is another essential decision appeared that Microsoft released Xbox to burst into the video gaming market. The Xbox is a sixthgeneration video game console and it released on November 15, 2001 (n.d). The most nervous thing of gambling is you never know the result. When people put the bet in table with

hope, discomposure, fear, and unknown, their heartbeat goes fast and fast until to know who is the winner. Xbox is a gambling as well and the different between common gambling and Xbox of gambling is that the common gambling just can let few people being nervous, but the gambling of Xbox lets all the people of the world being nervous, because the gambler is Microsoft. Since they do not want to lose this gambling, they prepared many things before they decide to play this gambling. After two decades of provide the product for business customers, Microsoft has been spending billions of dollars to break into the dog-eat-dog gaming business. In that time, the Sony has the PlayStation 2 to rule the market, and another competitor is GameCube console from gaming veteran Nintendo. However, the signs are that Microsoft making the right moves to against them. As MDR/Instate analyst Brian O'Rourke said, It could be bumpy at the start. But if they're committed to it, I think they can pull it off. Look at Windows, Word, and Internet Explorer. When they came out, everyone said they were just a cheap knockoff of a superior product. But Microsoft was persistent, and now they're No. 1 in the market (Becker, 2001). Microsoft absolutely knows there are the risks existing, but they still being brave to face the challenge. The Xbox of Microsoft has proved that the right business decision can result in the company keep leading position in the changeable market. Conclusion The better decision-making related to how successful for the organization. Once organization determine the goal of decisions, they should know how to perform the decision-making processes step by step. The organization also should know how to control and adjust during the decision-making processes operating. If an organization find there is an opportunity could let them more successful, they need to act it without any afraid. Of course, the precondition is that organization needs to collects all the information they need then analyze it and finally act it. Sometimes, there are many problem would appeared during the decision-making processes, the organization has to know how to solve it or even make decision to stop it. Microsoft Corporation could so successful as today depends on their discernment of the market and also better business decisions. Even though they are not successful for everything they made, but one thing is Microsoft was the persistent, and now theyre No. 1 in the market. As a decision maker, Gates decide to leaves Harvard for some reasons. He always knows what the world need and what the Microsoft

Decision-Making and Organizational Learning need to do for the world. No one can know the outcome would be setback or opportunity with every decision-making. Hence, keep a good Mentality for decision maker is very important. All in all, all of us

have to make decision everyday and people cannot avoid facing the options. When setback or opportunity comes in front of us, we should have confidence to make the decision to handle with it, because many successes come from the perfect decision-making.

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Becker, D. (2001, November 15). Has Xbox Transformed Microsoft? CNET (CBS Interactive). Retrieved from http://news.cnet.com/2009-1040-275784.html#ixzz1LZ5pu8vn Bowett, R. (2010). The Main Methods of Business Decision-Making. Retrieved from http://tutor2u.net/business/organisation/decisionmaking.htm Borland, J. (2003, April 15). Victor: Software empire pays high price. CNET (CBS Interactive). Retrieved from http://news.cnet.com/2009-1032-995681.html?tag=toc Cope, J. (1996, March). New And Improved. Smart Computing (Sandhills Publishing Company) 4 (3). Retrieved from http://www.smartcomputing.com/editorial/article.asp?article=articles/archive/95win/95win02/95win 02.asp&guid= Fried, I. (2008, October 27). Microsoft launches Windows Azure. CNET (CBS Interactive). Retrieved from http://news.cnet.com/microsoft-launches-windows-azure/ Linda, P. Morton. (2010). Decision Making: Programmed Vs. Non-Programmed. Retrieved from http://www.strategicmarketsegmentation.com/decision-making-programmed-vs-non-programmed/ Mintz, Jessica (October 22, 2009). Windows 7 operating system makes its debut. MSNBC. Associated Press. Retrieved from http://www.msnbc.msn.com/id/33429899/ns/technology_and_sciencetech_and_gadgets/ Rajan, C. V. (2009, January 09). Managerial Decision Making and the Decision Process. Retrieved from http://www.helium.com/items/1289688-managerial-decision-making-and-the-decision-process Reason, J. (1990). Human error. New York, NY US: Cambridge University Press. Retrieved from EBSCOhost Taylor, J. & Raden, N. (2008, July 31). The Nature of Operational Decisions. Retrieved from http://www.bpminstitute.org/articles/article/article/the-nature-of-operational-decisions.html Vamosi, R. (2007, January 23). CNET Windows Vista review. CNET (CBS Interactive). Retrieved from http://reviews.cnet.com/windows/windows-vista-ultimate/4505-3672_732013603.html?tag=txt%3bpage Xbox Press: A Letter from Marc Whitten: Discontinuation of Xbox LIVE for Original Xbox Games Xbox.com (2010, February 5). Retrieved from http://www.xbox.com/enUS/Press/archive/2010/0205-whittenlette 2006 GAR Accountability Profile - Microsoft (2008, November 17). One World Trust. Retrieved from http://www.oneworldtrust.org/index.php?option=com_docman&task=doc_download&Itemid=55&g id=93