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The Role of Business Communication in Decision Making Process:
Case Study- First Bank Nigeria Limited (FBN Sokoto ) Submitted By
Salihu Ahmad Tijani 14120905007
BEING A RESEARCH PROJECT SUBMITTED TO THE DEPARTMENT OF BUSINESS ADMINISTRATION, FACULTY OF MANAGEMENT
SCIENCES USMAN DANFODIO UNIVERSITY SOKOTO
IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMENT
NOVEMBER, 2015
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CERTIFICATION
This is to certify that this project work has been read, supervised and approved by the undersigned as meeting the requirement for the award of a post graduate diploma in management (PGDM) in Business Administration, Faculty of Management Sciences, Usman Danfodio University, Sokoto.
____________________ ________________
DR. A.S JUNAIDU DATE (Project Supervisor)
_____________________ ________________
DR.M.S UMAR DATE
(Head of Department)
_______________________ ________________
EXTERNAL SUPERVISOR DATE
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DEDICATION
This project is dedicated to my Amazing wife Fatimah, and to my most adorable and ever smiling daughter Michelle.
SALIHU AHMAD TIJANI
14120905007
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ACKNOWLEDGEMENT
I wish to express my sincere gratitude to Almighty God whom by His mercies, guidance, and protection saw me through the successful completion of this program.
Secondly, I wish to express my deep sense of gratitude to Dr. A.S Junaidu, my supervisor who supported me with full gaudiness from his expert proficiency, experience, and inspiring attitude.
Thirdly,the most respect and deep appreciation goes always to my lovelyparents who taught me and guided me through their long experience in how to be a hardworking and committed in achieving my goals.
To my wife who challenged me to take every bold step I have ever taken. It will be a disservice not to mention her. You mean the world to me.
And finally to my fellow colleagues and friends who always stood by my side through all the season. I want to say a very big thank you to all of you.
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TABLE OF CONTENT
Certification--- ii
Dedication---iii
Acknowledgement--- iv
Table of content--- v
List of Figures and Tables--- viii
List of abbreviations--- x
Chapter One: General Introduction--- 1
1.2 Statement of research problem--- 3
1.3 Research Questions --- 4
1.4 Research Objectives--- 4
1.4 Significance of the study--- 5
1.5 Hypotheses--- 6
1.6 Research variables--- 6
1.7 Scope and Limitation of the study--- 7
1.9. Definition of terms--- 8
1.10 Chapter Scheme--- 9
Chapter Two: Literature Review--- 11
2.1 Business communication--- 11
2.1.1 Functions of communication--- 12
2.1.2 Nature of Communication--- 13
2.1.3 Communication barriers--- 16
2.1.4 Organization communication--- 21
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2.1.5 Communication as a decision making tool--- 23
2.1.6 Electronic Communication--- 25
2.2 Managerial Decision making--- 26
2.2.1 Characteristic of managerial decisions--- 27
2.2.2 Decision making process--- 30
2.2.3 Barriers to decision making--- 35
2.2.4 Organizational decision making--- 40
2.2.5 Computer mediated decision making--- 43
Chapter three--- 46
3.1 Introduction--- 46
3.2 Data Collection--- 46
3.2.1 Secondary Data--- 46
3.2.2 Primary Data--- 46
3.2.3 Data measurement--- 47
3.3 Statistical analysis tools--- 47
3.4.1 Validity of Questionaire--- 48
3.4.2 Reliability of Research--- 49
3.5 Research population and sample selection--- 50
3.6 Characteristic of sample--- 51
Chapter Four--- 57
4.1 Introduction--- 57
4.2 Data Analysis and Discussion--- 57
4.3 Testing the hypotheses--- 75
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Chapter Five--- 78
5.1 Introduction--- 78
5.2 Conclusion--- 79
5.3 Recommendations--- 80
5.4 Proposed future studies--- 83
References--- 84
Appendix--- 88
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LIST OF FIGURES AND TABLES
Figure 1 A diagram showing the relationship between the dependent variable and
the independent
ones...
... 6
Figure 2 A General Model of the Communication Process (Source: Bateman and Snell,
2004………
14
Figure 3: the Steps of Decision-making
...
………. 30
Table 2 Correlation coefficient of each field and the whole of questionnaire... 48
Table 3 Cronbach's Alpha for each filed of the questionnaire and all the questionnaire………. 49
Table 4 Distribution of population according to post title... .50
Table 5 Sample selection by using stratified random sampling ... 51
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Table 6 Distribution of sample according to
gender... 51
Table 7 Distribution of sample according to
Age... .52 Table 8 Distribution of sample according to marital status ... .53
Table 9 Distribution of sample according to qualification ... ………...53
Table 10 Distribution of sample according to experience ... ……….54
Table 11 Distribution of sample according to managerial level ... 55
Table 12 Distribution of sample according to number of training courses in the field of
businesscomunication
...
... ...55
Table 13 Distribution of sample according to percentage of time allocated for communication...
... ……….56
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Table 14 Mean and Sign test for each paragraph of the first dimension and the
total of this dimension
...
... 57
Table 15 Mean and Sign test for each paragraph of the second dimension and the
total of this
dimension...
... ……….. .65
Table 16 Mean and Sign test for each paragraph of the third dimension and the
total of this dimension
...
... …….……...71
Table 17 Correlation coefficient between the modern business communications technologies and decision-making process in FBN ...
……...………...76
Table 18 Correlation coefficient between the business communications methods
decision-making process in FBN
...
. ………..76
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Table 19 Correlation coefficient between the personnel communications skills
and decision-making process in FBN
...
... 77
LIST OF ABREVIATIONS MCT’s --- Modern communication technologies
FBN --- First bank of Nigeria VC --- Video conferencing VPN --- Virtual private Network
xii ABSTRACT
This study aims at investigating the effect of business communication ondecision-making process in FBN by examining the role of Modern Communication Technologies (MCTs), business communication methods, and employee's communication skills on decision-making process. The research population consists of all FBN's employees in the low level management, middle level
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management, and top level management (446 in number). A stratified random sample method according to managerial level was utilized in order to ensure that particular managerial levels within the study population are adequately represented in the sample. Three hundred and forty employees participated in the survey. A total of 279 questionnaires were returned for a response rate of 82.1%, and seven of them were not valid.
The results of this study revealed that there is a significant correlation between MCTs and decision-making process. MCTs found to make attaining information easier and increase the efficiency through teamwork and effective decision-making.MCTs also motivate employees to participate with their ideas.
In addition, this study revealed that there is a significant correlation between business communication methods and decision-making process.Employees were receptiveto the useof oral communication methods for complex tasks. This study also found out that written communication methods are utilized to easily identify the problems encountered.
The analysis of this study revealed that there is a significant correlation between the personnel communication skills and decision-making process. One of the important findings of this study was the positive effect of engaging the employees in decision-making process.The study revealed that MCTs are impersonal, some of the employees suffer from communication apprehension.
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CHAPTER ONE 1.1 INTRODUCTION
In a world where speed and adaptability can make or break a business, organization increasing is how companies win and keep on winning (Cook andMacaulay, 2004). What separates the winners is the ability to make the rest important decisions well-and then to make them happen.
The key is not structure but rather an integrated organizational system. Decisions, if you can't make them; you won't be an effective manager. It requires getting the right people focused on those decisions at theright time. That's true whether the decisions involve the largest issues that a company faces (what’s our strategy?) or more tactical, day-to-day concerns (should we buy more components now or next month? Should we accept this customer's return?)(Batemanand Snell, 2004).
Survival and long-term success will often depend on finding the right solution. To take the right decision is typically not a simple matter, as most decision problems are highly complex in nature. A key issue for all managers is how far they should share decisions with their team or colleagues (Adair, 2007). Integral to decision-making is the management and creation of shared meaning, focusing on the mastery of communication is inseparable from effective decision- making.
Communication is a vital aspect of human existence. Aslong aslifeexists,the humanrace isperpetuallyseeking toheard and understood. Communication is the lifeblood of every organization (Nelson and Economy, 2005). It is themedium through which an organization’s vision and goals areinterpreted and understood by both its internal and external stakeholders.
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Communication is the transfer ofideas from the sender to the receiver,It is an indispensable management tool that provides the need by which people in business, politics and other professionals act, interact, and exchange information and ideas (Mozammel et.al, 2005).
No business organization;be it private or public sector organization can thrive without effective communication. It is the life-wire of every organization. In a classical business setting, communication helps both the employer and the staffs understand themselves, as well as providing a medium by which people in an organization act, interact, exchange information, ideas, develop plan, proposals and execute them; It is not possible to have good human relations without communication. An effective communication is required, not only for maintaining human relations, but also for achieving good business performance. In addition, practical experience shows that there is no communication without conflicts. Sometimes, conflicts can be useful, as they help to make correct decision.
Communication is the specific process through which vital information movesand is exchanged throughout an organization. Information flows through both formaland informal structures and it flows downward, upward, and laterally (Schermerhorn et al. 2002). Today, more than ever before, communication plays a major role in how managers get important things done in timely, and high quality ways. If they cancommunicate effectively, they can overcome many challenges (Durham et al. 2005).
Effective workplace communication is a key to cultivation of success and professionalism (Canadian Centre for Communication, 2003). A company that communicates throughout the workplace in an effective manner is more likely to avoid problems with completing the daily procedures, and less likely to have a problem with improper occurrence and will generate a stronger morale and a more positive attitude towards work. When employees communicate
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effectively with each other, productivity will increase because effective communication means less complains and more work getting done (Quilan, 2001). It removes confusion and frees up wasted time that would have been otherwise spent on explanation or argument (Fleming &
Larder, 1999). It makes workplace more enjoyable, less anxiety among co-workers which in turn means positive attitude towards work and increased productivity (Makin, 2006; Taylerson, 2012). Furthermore, another aspect of communication that affects productivity is noise level.
Noise has negative influence on communication, frustration levels increase while productivity decreases in relation to persistence and loudness of noise. A reason adduced for this is that spoken communication becomes progressively more difficult as noise levels increase.
1.2 STATEMENT OF RESEARCH PROBLEM
In the present time, First Bank Nigeria, which is considered as one of the biggest financial service provider in Nigeria, faces many challenges and threats that imposes on it deal with them seriously and properly. As business grows more complex, its ability to act quickly and adapt to change can get stretched thin. It faces increasingly dynamic, complex and unpredictable environment where technology, the nature of competition, industry boundaries and the rules of the game are changing dramatically. It must deal with a playing field that has become global, while customers are separating into "micro segments". Data cascades into companies, at the risk of obscuring meaningfulinformation.The need to control cost and increase efficiency coupled with increasing customer expectations mean that an effective organization is vital to succeed (Salamanand Asch, 2003).
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According to Dessler(2004), managers spend 60% to 80% of their communication time doing meetings and interacting with customers and colleagues. Managers that do not develop and encourage the use of such processes give up optional competitive advantages, and may underutilize company's strengths than before,organizations need to promote communication skills to facilitate precise decision-making that keeps them competitive. Moreover, manager's need to understand that the role of communication on decision-making is growing as the technological advance offers them more communication options. As access to technologies such as computer chat and videoconferencing increases, decision makers are choosing to use or to avoid these media without knowing the impact of their choiceson their decisions (Vicker and Hein, 1999). Thus, it is clear, the role that business communication plays in decisionmaking and hence the effect on the success of the organization. So, the researcher is conducting this study on business communication and its role on decision-making, as a result of his awareness of the importance of this study in improving the process of decision-making in First bank Nigeria Ltd sokoto. Accordingly we can say that the research problem is to identify to what extent can the use of business communication take part inimproving the decision making in first bank of Nigeria limited sokoto.
1.3 RESEARCH OBJECTIVES
The present study seeks to measure the following objectives:
1. Determine the effect of Modern communication technologies (MCTs) on decision-making Process in FBN Sokoto.
2. Determine the effect of communications methods on decision-making process in FBN Sokoto.
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3. Examine the effect of communications skills on decision-making process in FBN Sokoto.
4. Realize the constraints that restrict proficiency of communications systems in process of decision-making process in FBN Sokoto.
1.4 SIGNIFICANCE OF STUDY
In this research, information about the effects of business communication on decision-making will be integrated in order to assess objective and subjective decision making outcomes, across communication media richness (face-to-face) computer mediated-communication, Video conference, telephone, E-mail …etc, and to identify any obstacles at present and draw some recommendation that may help in improving the existing situation of using business communication system at FBN Sokoto. The major significance of this study is that it will help provide ways of implementing new communication technology strategies in private and public organizations and also help to appreciate different level of media satisfaction and quality of organizational communication. Aside that, it will also add to the body of previous literature on organization communication. It is germane for managers who could use this study as a template for decision making in their various organizations.
1.5 HYPOTHESES:
Hypothesis 1: There is a significant correlation between the modern communications technologies and decision-making process in FBN Sokoto?
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Hypothesis 2: There is a significant correlation between the business communications methods and decision-making process in FBN Sokoto?
Hypothesis 3: There is a significant correlation between the personnel communications skills and decision-making process in FBN Sokoto?
1.6 RESEARCH VARIABLES:
This study has one dependent variable, which is decision-making process, and three independent variables which are:
1- Modern Communication Technologies.
2- Communication methods.
3- Personnel communications skills.
Figure 1: diagram showing the relationship between the dependent variable and the independent one
7 1.7RESEARCH QUESTIONS
1. what are the effects of Modern communication technologies (MCTs) on decision-making Process in FBN Sokoto?
2. Determine the effect of communications methods on decision-making process in FBN Sokoto?
3. Examine the effect of communications skills on decision-making process in FBN Sokoto?
4. What are the constraints that restrict proficiency of communications systems in process of decision-making process in FBN Sokoto?
1.8 SCOPE AND LIMITATION OF STUDY
This study is essentially concerned with the effect of business communication as a tool for improving decision making process inorganization , using first bank of Nigeria ltdSokoto state branch office as case study. Some areas the researcher looked at in this study are importance of communication to organization.
The major limitation to this work is time constrain as there are other academic activities that requires the researchers attention, while also the respondent were not quite cooperative. Also the questionnaires could not be distributed to all the staffs because of this some employees could not complete the survey. Also, because the participants work in an office setting there's usually numerous documents on their desk. The survey was printed on whitepaper, therefore causing the survey to blend in with the other documentation. Other employees were not available to complete the survey due to absenteeism (vacation,personal time, sick, etc.)
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The research is limited the three (3) branches of FBN ltdSokoto state where staffs at different cadres and department were interviewed as regards communication.
1.9.1 DEFINITION OF TERMS
Sender - somebody or something that sends or transmit something.To establish yourself as an effective communicator, you must firstestablish credibility. In the business arena, this involves displayingknowledge of the subject, the audience and the context in which the message is delivered. You must also know your audience (individuals orgroups to which you are delivering your message). Failure to understandwho you are communicating to will result in delivering messages that aremisunderstood (Fowler, 2005).
Message - a communication in speech, writing, or signalsWritten, oral and nonverbal communications are effected by the sender's tone,method of organization, validity of the argument, what is communicated and whatis left out, as well as your individual style of communicating. Messages also haveintellectual and emotional components, with intellect allowing us the ability toreason and emotion allowing us to present motivational appeals, ultimatelychanging minds and actions (Fowler, 2005).
Channel - a course or a means of communication or expressionMessages are conveyed through channels, with verbal including face-to-facemeetings, telephone and videoconferencing; and written includingletters, emails, memos and reports (Fowler,2005).
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Receiver - These messages are delivered to an audience. No doubt, you have in mind the actions or reactions you hope our message prompts from this audience. Keep in mind, your audience also enters into the communication process with ideas and feelings that will undoubtly influence their understanding. Your audience will provide you with feedback, verbal and nonverbal reactions to your communicated message. Pay close attention to this feedback as it is crucial to ensuring the audience understood your message (Fowler, 2005).
Context - the words or phrases or passages that come before and after a particular word or passage in a speech or piece of writing and help to explain its full meaning (Encarta,2005). The situation in which your message is delivered is the context. This may include the surrounding environment or broader culture i.e. corporate culture, international cultures, etc. (Fowler, 2005)
Feedback- comments in the form of opinions about the reactions to something intended to provide useful information for future decisions and development (Fowler, 2005)
1.9.2 RESEARCHSCHEME
This research work is divided basically in five (5) chapters.
Chapter one forms the background of the study. It is made up of the introductory part of the study, statement of the research problem, objectives of the study, significance of the study, research questions, scope and limitation, definition of terms as well as the organization of the research work.
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Chapter two examines the recent literature review in this field and work of several scholars related to this research work.
Chapter three deals with the research methodology, sample of the population of study, source of data collection and the method of data analysis.
Chapter four contains data presentation, and analysis with particular reference of the case study.
Finally chapter five contains the summary of the researcher’s findings, recommendations with regards to the case study of the research work, conclusion and recommendations.
11 CHAPTER TWO: LITERATURE REVIEW 2.1 Business communication
The act of communicating is basic and fundamental that most people don’t think much about it.
It happens all day, every day and in every corner of the globe; using the telephone, the fax machine and the computer. Thanks to modern satellite technology, it can even happen between two people standing on opposite poles of the earth. In virtually every way that matters, it could be argued that the world today is built to support communication.
Effective communication occurs when the intended meaning of the source and the perceived meaning of the receiver are virtually the same (Schermerhorn et al. 2002). Although this should be the goal in any communication, it is not always achieved. Efficient communication occurs at minimum cost in terms of resources expended. Time, for example, is an important resource (Alamry and Alghalby, 2007).
On the other hand, if a company’s employees lack communication skills, not only could teams not coordinate their efforts and individuals seek feedback from and communicate their successes to their managers, but also customers would have a pretty tough time placing orders, and challenges to services being delivered. When this happens, the company will falter and ultimately fail (Nelson and Economy, 2005). Managers and companies that do not develop and encourage the use of communication process give up potential competitive advantages and may underutilize company strengths (Vicker and Hein 1999).
12 2.1.1 Functions of communication
Communication serves four major functions within a group or organization: control, motivation, emotional expression, and information. Communication acts to control member behavior in several ways. Organizations have authority hierarchies and formal guidelines that employees are required to follow. When employees, for instance, are required to communicate any job-related grievance to their immediate boss, to follow their job description, or to comply with company policies, communication is performing a control function. But informal communication also controls behavior. When work group tease or harass a member who produces too much (and makes the rest of the group look bad), they informally communicating with, and controlling, the member's behavior (Abedalbaqi 2003).
Communication fosters motivation by clarifying to employees what is to be done, how well they are doing, and what can be done to improve performance if it's subpar. Formation of specific goals, feedback on progress toward the goals, and reinforcement of desired behavior all stimulate motivation and required communication (Hareem, 2004).
For many employees, their work group is a primary source for social interaction. The communication that takes place within the group is a fundamental mechanism by which members shoe their frustration and feeling of satisfaction. Communication, therefore, provides a release for the emotional expression of feelings and for fulfillment of social needs (Robbins, 1996).
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The final function that communication performs relates to its role in facilitating decision-making.
It provides the information that individuals and groups need to make decisions by transmitting the data to identify and evaluate alternative choices (Robbins, 2003). No one of these four functions should be seen as being more important than the others. For groups to perform effectively, they need to maintain some form of control over members, stimulate members to perform, provide a means for emotional expression, and make decision choices. Thus, assumptions can be made that almost every communication interaction that takes place in a group or organization; perform one or more of these four functions.
2.1.2 The nature of communication
The Latin root of the word communicate is communicare, which means to make common or to share. Communication, therefore, is the transmission of information and meaning from one party to another through the use of shared symbols (Bateman and Snell, 2004). An Idea, no matter how great, is useless until it is transmitted and understood by others. Effective communication would exist when a thought or an idea was transmitted, so the mental picture perceived by the receiver was exactly the same as that envision by the sender (Robbins, 1996).
Figure (2) shows a general model of the communication process. The sender is a person or group trying to communicate with someone else. The sender seeks to communicate, in part, to change the attitudes, knowledge, or behavior of the receiver. A team leader, for example, may want to communicate with a division manager in order to explain why the team needs more time or resources to finish an assigned project. This involves encoding the process of translating an idea
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or thought into a message consisting of verbal, written, or nonverbal symbols, or some combination of them (Alamian 2005).
Such messages are transmitted or sent through various communication channels, such as face-to- face meetings, electronic mail, written letters and telephone communications or voice – mail, among others. The choice of channels can have an important impact on the communication process; some communication channels convey more information than others. The amount of information a medium conveys is called media richness. The more information or cues a medium sends to the receiver, the "richer" the medium. The richest media are more personal than technology, provide quick feedback, allow lots of descriptive language and send different types of cues. Thus, face-to-face communication is the richest medium because it offers a variety of cues in addition to words: tone of voice, facial expression, body language, and other nonverbal signals. It also allows more descriptive language, say, a memo does. In addition, it affords more opportunity for the receiver to give feedback to and ask questions of the sender (Bateman and Snell, 2004)
Figure 2 A General Model of the Communication Process (Source: Bateman and Snell, 2004)
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The telephone is less rich than face-to-face communication, electronic mail is less rich than yet, and memos are the least rich medium. In general, you should send difficult and unusual messages through richer media, transmit simple and routine messages through less rich media like memos, and use multiple media for important messages that you want to ensure people attend to and understand. In the earlier case of the team leader communicating with the division manager, for example, it can makequite a difference whether the message is sent face-to-face, in written memo, by voicemail, or by Email.
The communication process is not completed just because a message is sent. Thereceiver is the individual or group of individuals to whom a message is directed. In order for meaning to be assigned to any received message, its contents must be interpreted through decoding. This process of translation is complicated by many factors, including the knowledge and experience of the receiver and his or her relationship with the sender (Alamian 2005).
The top half of the model in Figure (2) is operating in on-way communication, where, information flows in only one direction from the sender to the receiver, with no feedback loop. A manager sends a memo to subordinate without asking for response. A boss gives an order over the phone, when receiver provide feedback to the sender by encoding a message, in response to the sender's message, completing the Figure (2) models, two-way communication has to occur.
The communication process often is hampered by noise or interference in the system that blocks perfect understanding. Noise could be anything that interferes with accurate communication ringing telephones, thoughts about other things, or simple fatigue or stress (Schermerhorn et al, 2002).
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The model in Figure (2) is more than a theoretical treatment of the communication process. It points out the key ways in which communication can break down. Mistakes can be made at each stage of the model. A manager who is alert to potential problems can perform each step carefully to ensure more effective communication. The model also helps explain communication pitfalls, misperception, and the various communication channels.
2.1.3 Communication barriers
Unfortunately, most of the stages in the process model have the potential to create distortion and therefore the sender's intended message does not always get across to the receiver. In the encoding stage, words can be misused, decimal points typed in the wrong places, facts left out, or ambiguous phrases inserted. In the transmission stage, a memo gets lost on a cluttered desk, or words are spoken with ambiguous inflection. Decoding problems arise when the receiver doesn't listen carefully or reads too quickly and overlooks a key point. And, of course, receivers can misinterpret the conclusion from unclear memo, or a listener takes a general statement by the boss too personally.
More generally, it is important to understand the following sources of noise that are common to most interpersonal Exchanges: Communication Apprehension, physical distraction, cultural differences, semantic problems, absence of feedback, status effects, people's perceptual, and filtering processes.
17 2.1.3.1 Communication Apprehension:
Some people – an estimated 5 to 20 percent of the population – suffer from debilitating communication apprehension or anxiety. Communication apprehension is a very serious problem because it affects a whole category of communication techniques. People who suffer from it experience undue tension and anxiety in oral communication, written communication, or both.
For example, oral apprehension may find it extremely difficult to extremely anxious when they have to use the telephone. As a result, they may rely on memos or letters to convey messages when a phone call would not only be faster but more appropriate (Robbins, 1996).
2.1.3.2 Physical Distractions:
Any number of physical distractions can interfere with the effectiveness of a communication attempt (Bateman and Snell, 2004). Some of these distractions are evident in the following conversation between an employee, Mohammad, and his manager. Okay, Mohammad, let's hear your problem (phone ring, boss picks it up, promises to deliver the report, "just as soon as I can get it done"). Uh, now where were we – oh, you are having a problem with marketing. They (the manger's secretary brings in some papers that need immediate signatures; he scribbles his name and the secretary leaves) … you say they are not cooperative? I tell you what, Mohammad, why do not you (phone rings again, lunch partner drops by) … Uh, take a stab at handling it yourself.
I have to go now. Besides what may have been poor intentions in the first place, Mohammed's manager allowed physical distractions to create information overload. As a result, the
communication with Mohammad was suffered. This mistake can be eliminated by setting priorities and planning. If Mohammad has something to say, his manager should set aside adequate time for the meeting. In addition, interruption such as telephonecalls, drop-in visitors,
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and the like, should be prevented at minimum, Mohammad's manager could start by closing the door to the office and instruct his secretary not to disturb them.
2.1.3.3 People's Perception
Perception is the process of receiving and interpreting in formation. As youknow, such processes are not perfectly objective. They are subjective, as people's self-interested motives and attitudes toward the sender and toward the message create biased interpretations. People often assume that others share their views, and naturally pay more attention to their own views than to those of others (Alamian 2005). However, perceptual differences get in the way of shared consensus. It helps to see others viewpoints as legitimate and incorporate others perspectives into your interpretation of issues. Generally, adopting another person's viewpoints is fundamental to working collaboratively. And at a more personal level, your ability to take other's perspectives can lead to higher assessments of your performance.
2.1.3.4 Cultural Differences
People must always exercise caution when they are involved in cross-cultural communication—
whether between persons of different geographical or ethnic groupings within one country, or between persons of different national cultures. A common problem is ethnocentrism—the tendency to believe one’s culture and its values are superior to those of others. It is often accompanied by an unwillingness to try to understand alternative points of view and to take the values they represent seriously. This mindset can easily create communication problems among people of diverse backgrounds (Maher, 2000).
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The difficulties with cross-cultural communication are perhaps most obvious in respect to language differences. Advertising messages, for example, may work well in one country but encounter difficulty when translated into the language of another. Problems may accompany with the introduction of Ford’s European model, the “Ka,” in Japan. In Japanese, Ka means mosquito and analysts wonder if a car that is named for a disease-carrying pest can ever sell well.
Gestures may also be used quite differently in the various cultures of the world. For example, crossed legs in the United Kingdom are quite acceptable, but are rude in Saudia Arabia if the sole of the foot is directed toward someone. Pointing at someone to get their attention may be acceptable in Canada, but in Asia it is considered inappropriate (Dessler 2005).
2.1.3.5 Status Effects
Status differences in organizations create potential communication barriers between persons of higher and lower ranks. On the one hand, given the authority of their positions, managers may be inclined to do a lot of “telling” but not much “listening.” On the other hand, we know that communication is frequently biased when flowing upward in organizational hierarchies.
Subordinates may filter information and tell their superiors only what they think the boss wants to hear (Alamry andAlghalby, 2007). Whether the reason is a fear of retribution for bringing bad news, an unwillingness to identify personal mistakes, or just a general desire to please, and the result is the same: The higher-level decision maker may end up taking the wrongactions because of biased and inaccurate information supplied from below. This is sometimes called the MUM effect in reference to tendencies to sometimes keep “mum” from a desire to be polite and a reluctance to transmit bad news. To avoid such problems, managers and group leaders must develop trust in their working relationships with subordinates and team members, and take
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advantage of all opportunities for face-to-face communications. Management by wandering around, or MBWA for short, is now popularly acclaimed as one way to achieve this trust. It simply means getting out of the office and talking to people regularly as they do their jobs.
Managers who spend time walking around can greatly reduce the perceived “distance” between themselves and their subordinates. It helps to create an atmosphere of open and free-flowing communication between the ranks. As a result, more and better information is available for decision-making, and the relevance of decisions to the needs of operating workers increases (Schermerhorn et al, 2002).
2.1.3.6 Filtering processes
Filtering is the process of withholding, ignoring, or distorting information. Senders do this, for example, when they tell the boss what they think the boss want to hear, or give unwarranted compliments rather than honest criticism. Receivers also filter information they may fail to recognize an important message, or attend to some aspects of the message but not others (Abedalbaqi 2003).
2.1.3.7 Absence of Feedback
One-way communication flows from sender to receiver only, as in the case of a written memo or a voice-mail message. There is no direct and immediate feedback fromthe recipient. Two-way communication, by contrast, goes from sender to receiver and back again. In these constructive exchanges, information is shared between both parties rather than delivered from one person to the other. It is more accurate, fewer mistakes occur, and fewer problems arise. It is characterized by the normal interactiveconversations in our daily experiences. Research indicates that two-way
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communication is more accurate and effective than is one-way communication, even though it is also more costly and time consuming (Schermerhorn et al, 2002). Because of theirefficiency, however, one-way forms of communication—memos, letters, E-mail, voicemail, and the like are frequently used in work settings. One-way messages are easy for the sender but often frustrating for the receiver, who may be left unsure of just what the sender means or wants done.
2.1.3.8 Semantic Problems
Semantic barriers to communication involve a poor choice or use of words and mixed messages (Dessler 2004). The following illustrations of the “bafflegab” that once tried to pass as actual
“executive communication” are a case in point:
A. “We solicit any recommendations that you wish to make, and you may be assured that any such recommendations will be given our careful consideration.”
B. “Consumer elements are continuing to stress the fundamental necessity of a stabilization of the price structure at a lower level than exists at the present time.”
One has to wonder why these messages weren’t stated more simply as: (A) “Send us your recommendations. They will be carefully considered.", and (B) “Consumers want lower prices.”
In this regard, the popular KISS principle of communication is always worth remembering:
“Keep it short and simple.”
2.1.4 Organizational Communication
No organization exists solely in isolation with one member who has no contact with anyone or anything. The exchange of ideas, information or instructions is a fundamental of all organizations. This exchange may take place internally betweendifferent sectors or departments,
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or externally with other organizations. Organizational Communication is the specific process through which information moves and is exchanged throughout an organization. Information flows through both formal and informal structures, and it flows downward, upward, and laterally (Schermerhorn et al, 2002).
Information flows in organizations through both formal and informal channels of communication. The formal communication in an organization sets out the command structure and interrelationships between the departments within it. A company organization chart will usually outline the chain of command and responsibility and hence indicate the likely information flow within that organization. Flows of communication can move upward, downward. Horizontally or diagonally and often are prearranged and necessary for performing some tasks.
Informal communications tend to co-exist alongside the formal structures that are established by management. In this way individuals formal networks and information is communicated as people chat during tea breaks, over the photocopier and as they pass in corridors. Such informal networks arise due to social needs and to fill the information gaps left by the formal communication (Hareem, 2004).
One familiar information channel is the grapevine or network of friendships and acquaintances through which rumors and other unofficial information are passed from person to person (Bateman and Snell 2004). Grapevines have the advantage of being able to transmit information quickly and efficiently. Grapevine also helps fulfill the need of people involved in them. Being part of a grapevine can provide a sense of security from "being in the know" when important
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things are going on. It also provides social satisfaction as information is exchanged interpersonally. The primary disadvantage of grapevine occurs when they transmit incorrect or untimely information; Rumors can be very dysfunction to both people and organization (Schermerhorn et al, 2002).
2.1.5 Communication as a Decision-Making Tool
At least one historian of corporate management has argued that increasedavailability and effectiveness of communication technology allowed management to develop as a systematic method of controlling business organizations (Whetten andCameron 2005). Certainly, the practice of management consists primarily ofcommunication activities, and most of that communication is devoted to decisionmaking processes of one kind or another.
2.1.5.1 Written Communication as a Decision-Making Tool
When documents are well written, their management function can be invisible.The writer and reader create a relationship, share information and take action. Although they will tend to describe themselves as implementing strategy, solving a problem, ormaking a decision, it was the successful interaction, effective articulation of ideas, andcreation of shared meaning that allowed those decisions to be made. Writtencommunication plays a special role in this process by virtue of its permanence,prepare consistency, and precision: The decision-making importance of documents becomes most apparent when theyfail. When people neglect to the reports and documentation the company needsto operate, or individuals cannot easily interpret and use them for communication, theefficiency and effectiveness of the entire organization can suffer.
24 2.1.5.2 Oral Discussion as a Decision-making tool
Given the significant advantages of written communication, it is perhaps surprising that the bulk of managerial decision-making is oral (Abedalbaqi 2003). For most practicing managers, the time and care required to create written documents is simply more than they can spend in the whirlwind of day-to-day activities. Instead, most decisions are made “on the fly” as small groups of individuals meet, consider a problem and its potential solutions, and agree on a plan of action.Oral decision-making is particularly useful in facilitating an exchange ofinformation, and in contextually grounding decisions. By definition, an oralcommunication event involves the give and take of a conversational exchange. The immediacy of feedback, including the subtle physical cues that indicate confusion, disagreement or support, allows communicators to quickly verify that information has been successfully exchanged (Bateman and Snell 2004).
2.1.5.3 Visual Communication as a Decision-Making Tool
Visual diagram can be particularly helpful when it comes to explainingrelationships between facts, things or idea. Words are a basic part of communication,but they come out in a long, long string. That can make it difficult to see theconnections between something said in the first paragraph and something said in the lastparagraph. A writer or speaker has to provide a new paragraph to explain therelationship—perhaps after the reader or listener has already forgotten the details of thefirst paragraph.
2.1.6 Electronic communication
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Electronic communications have revolutionized both the ability access otherpeople and to reach them almost instantaneously. We have moved from the world of the telephone, mail, photocopying, and face-to-face meetings into one of voice-mail, Email, facsimile transmission, computer-mediated conferencing, and use of the Internet and Intranets. Managers use computers not only to gather and distribute data but also to talk with others electronically. In electronic decision rooms, software supportssimultaneous access to shared files and allows people to share views and do work collectively. Advances in electronic communication technology are allowing organizations to;
(1) distribute information much faster than before; (2) make more information available than ever before; (3) allow broader and more immediate access to this information; (4)
encourage participation in the sharing and use of information; and, (5) integrate systems and functions, and use information to link with environments in unprecedented ways (Whetten and Cameron 2005).
The potential disadvantages of electronic communications must also be recognized. To begin, the technologies are largely impersonal; people interact with machines, not with one another.
Electronics also removes nonverbal communications from the situation—aspects that may otherwise add important context to an interaction.In addition, the electronic medium can influence the emotional aspects of communication. Some argue, for example, that it is far easier to be blunt, overly critical, and insensitive when conveying messages electronically rather than face-to-face. The term “flaming” is sometimes used to describe rudeness in electronic communication (Schermerhorn et al, 2002). In this sense, the use of computer mediation may make people less inhibited and more impatient in what they say.
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Another risk of the new communication technologies is information overload. In some cases, too much information may find its way into the communication networks and E-mail systems and basically overload the systems—both organizational and individual. Individual users may have difficulty sorting the useful from the trivial and may become impatient while doing so. In all this, one point remains undeniable: Newcommunication technologies will continue to keep changing the nature of work and of office work in particular. The once-conventional office is fast giving way to new forms such as telecommuting and the use of electronic networks. Workers in the future will benefit as new technologies allow them to spend more time out of the traditional office and more time working with customers on terms that best fit individual needs (Dessler, 2004).
2.2 Managerial Decision Making
One of the most important activities engaged in by any organization is decision making: the process of deciding what action to take; it usually involves choice between options (Adair, 2007). Obviously, the quality and timeliness of decisions made and the processes through which they are arrived at can have an important impact on organization effectiveness. Every success, every mishap, every opportunity seized ormissed is the result of a decision that someone made or failed to make. Never mindwhat industry you’re in, how big and well known your company may be, or how cleveryour strategy is. If you can’t make the right decisions quickly and effectively, andexecute those decisions consistently, your business will lose ground (Rogers andBlenko, 2006).
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Major business decisions are not simply choices, but processes through which groups of people harmonize their thinking such that they come to share perceptions, goals, and values. Many researchers have contributed to this field over the years. However, only recently have the roles of both knowledge and expertise in Decision-Making become better understood and more explicit as a result of work in cognitivesciences, psychology, knowledge management, and related fields (wiig, 2004). This section discusses the kinds of decisions managers face, how they are made, and how they should be made.
2.2.1 Characteristics of Managerial Decisions
Managers face problems constantly, some problems that require a decision are relatively simple;
others seem overwhelming. Some demand immediate action, while others take months or even years to unfold (Bateman and Snell, 2004).
2.2.1.1 Decision Environments
Problem-solving decisions in organizations are typically made under three different conditions or environments: certainty, risk, and uncertainty. Certain environments exist when have all the information you need, and can predict precisely the consequences of your action. When a person invests money in a savings account, for example, absolute certainty exists about the interest that will be earned on that money in a given period of time. Certainty is an ideal condition for managerial decision-making. But perfect certainty is rare (Hareem, 2004). Risk environments exist when you can estimate the likelihood of various consequences, but still do not know with certainty what will happen. For instance, managers can make statistical estimates of quality rejects in production runs, or a senior production manager can make similar estimates based on
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experience. Risk is a common decision environment in today’s organizations. Uncertain environments exist when you has insufficient information to know how the consequences of different actions. Uncertainty is a key difficulty in decision-making (Simon, 2000). It forces decision makers to rely heavily on individual and groupcreativity to succeed in problem solving.
It requires unique, novel, and often totally innovative alternatives to existing patterns of behavior. Responses to uncertainty are often heavily influenced by intuition, educated guesses, and hunches. Furthermore, an uncertain decision environment may also be characterized as a rapidly changing organizational setting in terms of (a) external conditions, (b) the information technology requirements called for to analyze and make decisions, and (c) the personnel influencing problem and choice definitions (Schermerhorn et al, 2002).
2.2.1.2 Types of Decisions
The many routine and non-routine problems in the modern workplace call for different types of decisions. Routine problems arise on a regular basis and can be addressed through standard responses, called programmed decisions. These decisions have been encountered and made before. They have objectively correct answers and can be solved by using simple rules, policies, or numerical computation (Bateman and Snell, 2004). Examples of programmed decisions are reordering inventory automatically when stock falls below a predetermined level and issuing a written reprimand to someone who violates a certain personnel procedure. If most important decisions were programmed, managerial life would be much easier. But managers typically face non-routine problems. These non-programed decisions are new, novel, complex, and having no certain outcomes. There are varieties of possible solutions. The decision maker must create or impose methods for making the decision; there is no predetermined structure on which to rely
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(Alamry and Alghalby,2007). An example is a senior marketing manager who has to respond to the introduction of a new product by a foreign competitor. Although past experience may help deal with this competitive threat, the immediate decision requires a creativesolution based on the unique characteristics of the present market situation.
2.2.1.3 Conflict
Conflict, exists when the manager must consider opposing pressures from different sources, and this make the important decisions to become more difficult (Hareem, 2004). This conflict occurs at two levels. First, individual decision makers experience psychological conflict when several options are attractive, or when none of the options is attractive. For instance, a manager may have to decide whom to lay off, when he doesn't want to lay off anyone. Second, conflict arises between individuals or groups. The chief financial officer argues in favor of increasing long-term debt to finance an acquisition. The chief executive officer, however, prefers to minimize such debt and find funds elsewhere. The marketing department wants more product lines to sell to its customers, and the engineers want higher-quality products. But the production people want to lower costs by having longer production runs of fewer products with no changes. Few decisions are without conflict (Bateman and Snell, 2004).
2.2.2 Decision-making Process
In decision-making, there is a classic five-step approach that decision maker should find extremely helpful. That does not mean he would follow it blindly in all situations. It is a fairly
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natural sequence. Of thought, however, and so even without the formal framework he would tend to follow this mental path. The advantage of making it conscious is that it is easier to be swiftly aware when a step is missing or – moreprobably – has been performed without understanding or intention (Adair, 2007).
More formally, as Figure (6) illustrates, decision makers should (1) Recognize and define the problem or opportunity, (2) Generate and evaluate alternative solutions, (3) Choose a preferred course of action, (4) Implement the preferred course of action, and (5) Evaluate the results and follow up as necessary.
Figure 3: the Steps of Decision-making
Step 1. Recognize and define the problem or opportunity
The first stage in the decision-making process is to recognize that a problem exists and must be solved. A discrepancy exists between some current state of affairs and some desired state. Such
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discrepancies- say, in organizational or unit performance- may be detected by comparing current performance against (1) past performance, (2) the current performance of other organizations or units, or (3) future expected performance as determined by plans and forecasts (Bateman and Snell, 2004). Recognizing that a problem exists is only the beginning of this stage. The decision maker also must dig in deeper and attempt to define the true cause of the problem (Alamry and Alghalby, 2007).
For example, a sale manager knows that sales have dropped drastically; he should not automatically reprimand his sales staff, add new people, or increase the advertising budget. He must analyze why sales are down and then develop a solution appropriate to his analysis. Asking why, of yourself and others, is essential to understand the real problem.
A great deal of communication might be necessary for a group to quantify the problem, explore the extent of its effect, and determine whether other stakeholders have differing views of the problem. There should be agreement on the definitions and significance of the problem before the decision-makers proceed to finding solutions to it. It is a good principle not to make decisions in the absence of critically important information that is not immediately to hand, provided that a planned delay is acceptable. The rapid growth of methods of communication such as faxes, voice mail, e-mail, junk mail and the internet has now contributed to a new disease: Information Overload Syndrome. A recent international survey of 1,300 managers listed the new disease’s symptoms, which included a feeling of inability to cope with the incoming data as it piles up, resulting sometimes in mental stress and even physical illness requiring time off work. The survey found that such overload is a growing problem among managers – almost all of whom expect it to become worse (Adair, 2007).
32 Step 2. Generate and Evaluate Alternative Solutions
The second stage in the decision-making process is to explore alternative solutions to the problem identified in the previous stage. Decision-making experts call alternatives "the raw material of decision-making." (Dessler, 2004). This step reallyconsists of two parts:
- Generating alternatives - Evaluating alternatives
There are several ways to generate good alternatives. The following are three common ways to do that:
1- Brainstorming. Brainstorming can be done individually or in a group. Brainstorming requires an environment in which the participants (individuals or group members) are free to “think out loud.” Participants blurt out as many ideas as possible within a specified time period. No evaluation of ideas is permitted so as to encourage the free flow of creative ideas. These ideas are recorded. When the specified time period ends, then evaluation of the ideas begin (Dessler, 2004).
2- Surveys. Surveys economically tap the ideas of a large group of respondents. Surveys present respondents with the problem and a series of alternative solutions.
3- Discussion groups. Discussion groups should consist of those who are directly involved in decision-making. In generating alternatives, the group members should:
Becomprehensive. Avoid initial judgments (as in brainstorming). Focus on the problem, not on the personalities of the people involved in the decisionmaking process (Alateia, 2003).
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After you have generated alternative solutions, you must have some means of evaluating them.
Fundamental to this process is to predict the consequences that will occur if the various options are put into effect. Of course, you must attempt to predictthe effects on financial or other performance measures. Another part of evaluation is identifying contingencies alternative courses of action that can be implemented based on how the future unfolds (Alamry and Alghalby, 2007).
Step 3. Choose a preferred course of action
The third step in the decision-making process is to select one of the alternatives explored in Step 2 for implementation. The critical preliminary activity here is to establish the selection Criteria (Adair, 2007). After you have evaluated each alternative, one should stand out as coming closest to making the decision with the most advantages and fewest disadvantages. Important concepts here are maximizing, satisfying, and optimizing. Maximizing is making the best possible decision. In other words, maximizing results in the greatest benefit at lower cost, with the largest expected total return. It requires searching thoroughly for a complete range of alternatives, comparing one to another, and then choosing or creating the very best. Satisfying is choosing the first solution that is minimally acceptable or adequate; the choice appears to meet a targetedgoal or criterion. It means that a search for alternatives stopsat the first one that is okay. Commonly, people do not expend the time or energy to gather more information.Instead, they make the expedient decision based on readily available information.Let's say you are purchasing new equipment and your goal is to avoid spending too much money. You would be maximizing if you checked out all your options and their prices, and then bought the cheapest one that met your
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requirements. But you would be satisfying if you bought the first one you found that was within your budget and fail to look for less expensive options. Optimizing means that you achieve the bestpossible balance among several goals. Perhaps, in purchasing equipment, you are interested in quality and durability as well as price. So, you buy the one with the best combination of attributes, even though there may be options that are better on the price criterion and others are better on the quality and durability criterion (Bateman and Snell, 2004).
Step 4. Implement the preferred course of action
The decision-making process does not end once a choice is made. The chosen alternative must be implemented. People who implement the decision must understand the choice and why it was made. They also must be committed to its successful implementation. These needs can be met by involving those people in the early stages of the decision process (Alamry and Alghalby, 2007).
Managers should plan implementation carefully through developing an action plan, determining objectives, identifying needed resources, building a plan, and implementing the plan
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Step 5. Evaluate the results and follow up as necessary
The final stage in the decision-making process is evaluating the decision. This means collecting information on how well the decision is working. Quantifiable goals (a 20 percent increase in sales, a 95 percent reduction in accidents, 100 percent on-time deliveries) can be set before the solution to the problem is implemented. Then objectivedata can be gathered to accurately determine the success (or failure) of the decision (Bateman and Snell, 2004).
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Decision evaluation is useful whether the feedback is positive or negative. Feedback that suggests the decision is working implies that the decision should be continued and perhaps applied elsewhere in the organization. Negative feedback, indicating failure, means that either (1) implementation will require more time, resources, effort, or thought or (2) the decision was bad one. If the decision appears inappropriate, it's back to the drawing board. Then the process cycles back to the first stage: (re)definition of the problem. The decision-making process begins anew, preferably with more information, new suggestions, and an approach.
2.2.3 Barriers to Decision-making
Full execution of the five-stage decision-making process is the exception rather than the rule in managerial decision-making. But research shows that when managers use such rational process, better decisions result. Mangers that make sure they engage in these processes are more effective (Bateman and Snell, 2004). Why don't people automatically invoke such rational processes? It is easy to neglect or improperly execute these processes. The problem may be improperly defined, or goals misidentified. Not enough solutions may be generated, or they may be evaluated incompletely. A satisfying rather than maximizing choice may be made. Implementation may be poorly planned or executed, or monitoring may be inadequate or nonexistent. And decisions are influenced by subjective Psychological biases, time pressure, social realities, Organizational structure, and degree of certainty.
2.2.3.1 Psychological Biases
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One set of barriers that influence decision-making stems from human nature itself.Decision makers are far from objective in the way they gather, evaluate, and apply information toward making their choices. Following are some examples that represent documented subjective biases:
a) The Availability Bias
Managers tend to use only the information available and give more weight to more recent behavior. This is because of that, the managers use information readily available from memory to make judgments. The bias, of course, is that readily available information may not present a complete picture of a situation. For example, if you had a perfect on-time work attendance record for nine months but then were late for work four days during the last two months because of traffic, shouldn’t your boss take into account your entire attendance history when considering you for a raise?
b) Illusion of Control
It is a belief that one can influence events even when one has no control over what happen.
Gambling is one example: Some people believe they have the skills to beat the odds even though most people, most of the time, cannot. In business, such overconfidence can lead to failure because decision makers ignore risks and fail to objectively evaluate the odds success. Relatedly, they may have an unrealistically positive view of themselves or their companies believe they can do no wrong, or hold a general optimism about the future that can lead them to believe they are immune to risk and failure (Bateman and Snell, 2004).
c) The Representativeness Bias
