Espacios. Vol. 36 (Nº 03) Año 2015. Pág. 2

Managing individuals, collectiveness and environment in Decision Making Process for Businesses (an unpretentious approach)

Gerenciando indivíduo, a coletividade e o ambiente num processo de tomada de decisões em negócios (uma visão despretensiosa)

Jairo Aparecido MARTINS 1; Klaus Peter CONRADY 2; Estaner Claro ROMÃO 3

Recibido: 02/10/14 • Aprobado: 28/10/14

Contenido

1. Introduction

2. Individuals – social group (evolutionary approach)

3. Company - Environment

4. Company profile and purpose

5. How to manage the Decision-Making process

6. Conclusions

References

1. Introduction

Every day, minute and in some cases, even seconds, people face choices and take decisions, big and small under higher and lower importance but these are with us almost all the time. Understanding how people arrive at their choices is an area of cognitive psychology has deserved attention. Theories have been generated to explain how people make decisions, and what types of factors influence decision making in the present and future (Dietrich, 2010).The process of decision-making involves many disciplines and gather several variables. It is well known and recognized that mathematicians have worked hardly in order to obtain manners on how to take decision and making the better choice. The history of decision making goes back to the 1600s – to Descartes and Poincare who created a first 'calculus' of decision making. The modern view of decision-making, which takes into consideration of human information processing and the use of heuristics is a result of the 20th century and goes back to the groundbreaking work of Herbert Simon (Dietrich, 2010).

The way of making decisions, according to the same author, is the "moral algebra", it mean you have the options you analyze the consequences, ponder them, and apply certain weight for each variable and procedure with mathematical calculations. Several events have, in certain way, contribute to the decision-making theory, such as Human Evolution, World Wars I and II, Cold War, Individual or Collective Sports, Society Cognitive Improvements, Technologies Advances, Companies Management Methodologies, Emotional Intelligence and several other. In this context, the decision –making process is discretized by the scientists in three major categories; logical, probabilistic and heuristic. Not discarding the personal values, on the other hand, which are the roots that define humans as individuals. Personal values, such as honesty, reliability and trust, determine how one will face the world and relate with people. It also consists of caring, courage, creativity, friendliness, honesty, honor, independence, integrity and spirituality (Tran et. al. 2012). In several environments stay the challenge on how to manage such decision process in order to bring benefits for the enterprise´s stakeholders. In fact, this is one of the most contemporary and frequent challenges studied these days. Best-sellers like "From God to Great" (Collins, 2001) and "How Mighty Fall" (Collins, 2009), are important readings to understand the interactions between individuals, companies internal and external environments.

Learning with processes and finally analyzing decisions made which succeed in management & results and sometimes brought to failure is extremely important. This paper aims to bring an overview of the humans as individuals, the enterprises with their tools and management profiles and finally describes the necessary merging between individual reward and happiness with success. The understanding of such complex environment and puzzled-scenario is important to manage a company or an enterprise to get the real benefit to the enterprise firstly and in parallel for the society as a whole. The description that follows are based on important scientist´s theories and in the author´s industrial and academic experiences.  

2. Individuals – social group (evolutionary approach)

All of us want to succeed and be happy, even if we don´t admit it openly or choose to cloak our desire in different words. Where our dreams are about professional success, spiritual fulfillment, a sense of connection, a purpose in life, or love and sex, we convert those things because ultimately we believe that they will make us happier (Lyubomirsky, 2008).

Nevertheless, and as individuals, the human being have innumerous strengths (qualities) (Figure 1) and some consistent and sometimes intense drawbacks (and/or weaknesses). The qualities are impressive and present in higher or lower degrees and levels in all individuals, undependable on his personality, education, formation, companion, wealth, etc…; the weaknesses wouldn´t be different.

Fig. 1. Human qualities (Gopi, 2013).

However, there are ambiguous factors, strengths or weaknesses, in each individual, like Ego, Greed, Jealous and Fear. Each of them may be a strength, when having them as a reference to grow (aiming the personal growing), or weaknesses when non-profitable, battles where self-esteem or monetary benefits, are considered the most relevant factors.

In terms of definition, the Ego, for example, is - the opinion that you have about yourself, or a part of the mind that senses and adapts to the real world. Detailing, - the one of the four divisions of the psyche in psychoanalytic theory that serves as the organized conscious mediator between the person and reality especially by functioning both in the perception of and adaptation to reality — compare (Tonn et. al. 2000). The second is Greed, defined as - having or showing a selfish desire to have more of something (such as money or food)" (Tonn et. al. 2000). The Jealous as - the intolerant of rivalry or unfaithfulness or disposed to suspect rivalry or unfaithfulness or even hostile toward a rival or one believed to enjoy an advantage (Erskine, 1988). Lastly, the Fear is - a feeling of agitation and anxiety caused by the presence or imminence of danger (Koury, 2009). These feelings are part of every human and ought to be pondered properly along the decision-making process.

Beyond of such complexity of emotions and feelings, internal complex chemical reactions can influence decisions, mainly when heated emotional battles for decisions are in the context. As knowledgeable, our whole body depends on chemical reactions for proper functioning. These chemical reactions keep on happening in our body throughout our life (Tonn et. al. 2000). Such chemical reactions flow through all the cells, nervous, muscles, synapses, neurons, etc… and these passes through or are ignited by our main box, the Brain. The Brain, on the other hand, when in such intense emotional state has its command vulnerable and sometimes it changes depending on logically the emotional state involved. Until now the deep influence on hormones, soaking through the body is not plenty understood (in details) by the scientific community but recognized as an influential part of the decision-making process, mainly by the E.I. specialists (Emotional Intelligence) (Goleman, 2005).

Clausing and Katsikopoulos (2008) are favor of rationality in systems engineering. According to them "Operational rationality is the foundation for the improvement of quality, cost, and delivery that leads to continued success in the market place". On the other hand, the authors also recognize that rationality is not simple present or absent, but there are intermediate degrees of rationality, this last which is of profound importance. An alternative concept of rationality is seen in the Figure 2 below.

Fig. 2. Some alternative concept of rationality [12,13].

There are other literatures like Tran et. al. (2012) and Medina (2008) recognizing that the lack of emotions leads to extreme difficulties to make decisions and, in last analysis, a poorly social discernment, even when the factual intelligence is integer  (Ratey, 2002). Therefore, emotions are key for having success in the decision-making process. This brings contradiction whether it thought that logic is the unique reasonable way to take decisions and puzzled when the absence of emotion jeopardize the decision process in the mind. Nevertheless, the best way to decide is properly manage the emotional, guided for reasonable tools, methodologies and pondered thoughts.

Indeed, a very beneficial and important feeling to take into account in an organization and for individuals is certainly the "reward". Reward brings pleasure for humans by the brain; this last, spreads out through the body a hormone called dopamine. Dopamine works in the individual body reward and keeps his attention. This attention and the level of dopamine increase when the people faces new situations and challenges (normally external incentives / inputs). The same happens with the injection of nicotine, carbohydrates, alcohol, etc… These substances compensate low levels of dopamine in the body when deficit of hormone exist and the body does not have enough "pleasure" (Ratey, 2002). Along his life, the individual look for such kind of recognizing and reward, being from his social or either enterprise environment.  The dangerous side of the external award, when it is used (appreciation, bonus, status, etc…) is that the person gets used to it. Moreover, the lack of a bonus you are used to, will therefor demotivate the person, then very often, you have to increase the doses. On this hand, it is recommendable to apply intrinsic motivation and based on achievements, this should be the goal. Certainly, a bit of culture of a people might balance in order to avoid misunderstanding and the labeling of relations as "cold relationship in the workplace".

The importance of the social group of modules can be gleaned from the fact that nearly all the primates live in complex social groups. Furthermore, social living has almost certainly been a feature of the evolutionary ancestry common to humans and primates over the past 30 million years. The group-level modules enable individuals to function in groups in mutually beneficial ways. The recognition and discrimination of kin provides an important facet of increasing inclusive fitness, while the disposition to accept social ideologies would provide a much-needed cement to bind together non-kin for reciprocal exchanges. If early hominins were engaged in intergroup competition, mechanisms to bind groups together, and, moreover, treat in-group and out-group members differently would provide a competitive advantage (Cartwright, 2008). 

3. Company - Environment  

Our environment, private or in the company, also influences indirectly the individual behavior (Ratey, 2002). In this context, several types of working environments exist; among them highlights;

Empowered, democratic and based on free speeches;
Productive and based on ideas exchanges and data basis. Most of times use tools to analyses scenarios and take decisions - democratic, called challenging.

Authoritarian and based on the upper level power;
Destructive and based on power superiority and battles of Egos. Achievements are rarely reached, called non-productive.

Fearful and always complaining about the risks;
Static with eligible changes and fade to bankruptcy. Any movement brings risk and stand still is the unique way, thinking that the world function in the company way and in its rhythm, not the opposite. None affecting.

Irresponsible, lack of consistency and commitment;
No worries about the society and Customers, the last, faced as an enemy not a partner. All errors came from an unique source, the Customer. Called disconnected with the reality.

It is important to notice that, according to Sandel (2009) and particularly in reference about Locke J.´s theory, the humans have three rights in terms of justice, based on libertarian´s principles – like right of "life", "freedom" and "property". Therefore, it might be an interesting exercise to think which of the profiles above fits better with the majority of the individuals working in enterprises and tuned with libertarian´s theory.

4. Company profile and purpose

Like individuals, the company also has its own identity. The main reason of the enterprises' existence, for sure and in capitalism definition, is to obtain "incomes - profits". In this context the capitalism can be defined as  "an economic system in which trade, industry and the means of production are controlled by private owners with the goal of making profits in a market economy (Dietrich, 2010; Tran et. al. 2012). Central characteristics of capitalism include capital accumulation, competitive markets and wage labor (Collins, 2001). In a capitalist economy, the parties to a transaction typically determine the prices at which assets, goods, and services are exchanged (Erskine, 1988; Fulcher, 2004; Jenks, 1998; Durlauf , Blume, 2008) but differently and in the opinion of the authors (and in phase with some contemporaneous thinkers), capitalism had to be, in essence, an economical system. This aims to obtain resources in the benefit of its own creator (humanity), and in respect of its own environment.

There are several types of companies in terms of sizes, philosophy, type of products, processes, management approach, metrics, shareholders, stakeholders, etc… Nevertheless, is consentaneous clear for the industrial community the main thing the contemporary companies should have is their identity. Its identity reveals the main principles of the company or its reason of existence. The companies' characterization, necessary in the contemporary corporates view, pass through its definitions of; Mission, Vision and Values.

Mission Statement: A corporate mission statement defines what the corporation does, who it serves, and how it serves (creates value for) its clients. It is designed to provide clarity of focus and direction for those in the company and answers the questions of who we serve and how. It also creates clarity of value for those outside the company and answers the question of whether this company can be of value to me and/or my company (Campbell, Yeng, 1991).

Visions Statement: A corporate vision statement sets a dynamic and compelling view of the corporation at some point in the future. It is an emotional driver to some "big idea" or challenge that drives those in the corporation toward it. It is not intended for those outside the company. It is not a goal, as they should be SMART, but rather it can be a wild, crazy, and even unattainable idea, as long as it provides a deeply emotional drive to accomplish something great that those in the organization can get behind and drive toward (Campbell, Yeng, 1991).

Corporate Values: Corporate Values are a company's ethical and moral compass and decision-making foundation. They are the ideals and ethics that management holds dear. They drive decision making in that they are constantly referred to in the decision making process. That is, when in a tough spot, the answer needs, first and foremost, to be consistent with the company values. They are generally for both internal and external consumption. They tell those in the company how things are done and those outside the company why they want to be associated with this company. Corporate values are best when they are few in number (between 5 and 10) but high in meaning and lived daily (Campbell, Yeng, 1991).

In parallel with the statements below the environment in the company, which supposed to hold a certain level of confidence (trust), is imperial for succeed when managing people. Trust, as very important quality and characteristic, should be taken into account for any relationship in a serious and dedicated manner. There are several definitions of "trust" in the literature but the most used is as follow "Trust has been defined as the belief that a party´s word or promise is reliable and that a party will fulfil his/her obligations in an exchange relationship" (Schurr, Ozanne, 1985, p.940). Based on the simple but wise statement the internal relationship among the employees should be deployed under clear rules of trust as well as ethical principles. According to a research done by Berth (1996), "an organization based on trust, on the base of team, is one of the most important success factor in leading companies". The same study describes that companies based on trust have 286% better "Earnings Before Interest and Taxes" (EBIT), Cash Flow and Return Of Investment (ROI) when compared with those based rigidly on total control of their processes. These last statements give an overview and clarifies the extremely high influence / impact of an organization based on trust.

5. How to manage the Decision-Making process

Based on what is contextualize above the decision-making process seems to be not definitively associated uniquely with mathematical theories or formulae, like previously described, mainly because it depends on several factors and mainly one of them and the most important - humans. On the other hand, contradictory but rational and manageable, is reasonable to make use of tools that may help to make decisions, bringing rules and basing theories to support the proper decisions. The usage of the tools is a worth way to bring everybody together and under the same focus (purpose). Political actions when used tendentiously in order to ignore facts in making decisions processes should be definitely avoided (Clausing, Katsikopoulos, 2008). The politics, on the other hand, as known is a science and when properly managed in the decision-making processes becomes very important and influencing.

The awareness's addresses back the three main rights of humans in terms of justice (life, freedom and property) and the reason of his life (happiness and reward). In this context several psychologist have indicated the usage of a tool called "360 degrees analysis" as an important tool that can bring consciousness between the professionals who are in the command and those on operation. "Coaching" is another tool used to the individuals in order to study and whether is necessary correct his trajectory of life (behavior) when compared with the enterprise profile or people in the team. Alternatively, in another extreme, reasoning the need of moving to another challenge or company.

In fact, the usage of the Company purposes as the main guideline, (as a "bible"), is basic and is above any discussion. The company´s profile (Mission, Vision and Values) must cross all over the employees (undependable of hierarchy) and being plenty understood. These statements have to lead any discussion and served as a guideline for it, it means that the main beneficiary of each decision has to be the company. It should be clear in the employee´s minds that whether the company goes well the employees and the community will obtain direct or indirect benefits. Those statements bring logic for any discussion, the necessity to serve the company within its purposes and under its own rules. 

Another important tool for decision-making is the definitively the data input. However, caution should be taken in terms of reliability of data; they ought to be reliable in order to better decide. Their accurate interpretations are also minimum to have the better choice chosen or take the right decision. Probability usually is applicable in this case and can bring assertiveness when deciding.

With time, some companies have made use of such ideas exchanging and challenging even the "simpler" employee to share ideas, because creativity counts more than industrial machines (Ariely, 2009; Rupp et. al. 2011). According to Medina (2008) the brain appears to be designed to solve problems related to surviving in an unstable outdoor environment, and to do so in constant motion. There are social rewards that strongly motivate behavior – and one of the least used in corporate life is the encouragement of social reward and reputation (Collins, 2001).

Going against such tendency for individuality and for the teamwork are several tools like, Kaizen, Lean Manufacturing, Lean Enterprise, etc… Kaizen (Tran et. al. 2012) and Lean Enterprise (Jackson, 2006), among them, is one of the most brilliant ideas of the contemporary corporate world; consonant with the individual and collective "reward", make use of logic, probability and heuristic. It raises projects, address them, manage, practice and presented as a reality. PDCA - Plan-Do-Check-Act along all the company hierarchy (no barriers). These tools have shown superior results (Figure 2).

The concern usually is directly related to the fact of working as a team, mainly in terms of decision. The decision process, in this case, should make use of logic, probability, and heuristic and mainly under democratic pre-established rules.

Digging a bit about kaizen and Lean - their sections, for example, usually spends one week and the decisions sometimes should be based in restrict and not much precise data, even so the democracy must be applied in any circumstance. Within the team, members an agreement must be clear, once decision taken in a democratic way, all the member must help in the decision implementation and whether it fails this belong to the team and never addressed to any individual. It should be pointed out that as a team the Kaizen ought to have a leader, who usually is called facilitator. His responsibility is to harmonize the relationship, to bring the necessity of data to the team and promote free speaking and wealth debates. Beyond of this he must recognize his responsibility but mainly the achievements of the team. As seem the facilitator has a high contribution to the team results in such limited time.  

Fig. 3. Kaizen – PDCA cycle (Jackson, 2006).

Actually, most of the companies recognize the essence of interaction and the specialty of the operators in the shop floor. The operators in the assembling lines and cells are closest to the problems (called treasures) and from the interaction come new ideas of; cost reduction, easy way of working, better environments, processes or project changes, etc…. Empowerment is then a clever attitude in order to get better results from your "most reliable and direct related person to the final Customer" – the operator. The merge between the interests, individual and by using teamwork to motivate improvements by decision-making is the right way to succeed in getting results in any corporation.

Another common practice is to invite professionals from different and non-correlate areas to participate in such activities of kaizen and lean. It has being impressive the contribution of professionals who are not in the front line and facing directly the issue (treasure) to overcome.

6. Conclusions

In order to reach the best decision at the decision-making process a recommendable scheme is drawn in Figure 4. The foundation and base should be stable and based on the Company, Community and Environmental benefits and therefore the six pillars are able to credit the decision.

Fig. 4. Decision Making Process Scheme.

The pillars being; Voice of Customer (VOC) – his expectance and needs, the Voice of Process (VOP) data from the source of generation, Company Statements (CS) – its characterization, rules and targets, Individual Values (IV) – reward as being a necessity, Team Work (TW) – where the creativity raises and the democracy must be present under a facilitator guidance. Finally, creativity (CR) which is one of the most important things in order to be ahead in the actual competitive market (Brainstorms sections are high recommendable).

Some additional inputs are necessary as follow;

• The humanity is composed by individual with qualities and weaknesses;
• the emotional side of the humans are part important on the decision-making processes, without it, the decision is not done or poorly performed;
• on the other hand detrimental feelings must be put apart in order to have a profitable  environment;
• the brain is designed to solve problems and this may bring recognition and reward in an add-value teamwork environment;
• like individuals the companies have their own identity and those should be clear all over the employees;
• the company identity, characterized as Mission, Vision and Values, should be taken into account along the decision making process once the most beneficial in such processes is the company directly and in parallel the employee secondarily;
• the employees should me motivated to part of the company and the principle of "reward" and "recognition" is totally applicable due the human nature (dopamine need);   
• such "reward" must be threaten collectively and an important tool to have the benefit is by using powerful tools like Kaizen, Lean Manufacturing, Lean Enterprise, etc…; 
• in a process of Kaizen, for example, as much as accurate input data possible, more assertive is the decision. Beyond of this  and when properly leaded, brings the trust expected among the collaborators of the companies and the pleasure of an achievement accomplished;
• the democracy must be part of the teamwork process developed within the team members and once the decision is taken all members must be part of it successfully. The team facilitator (leader) must take care of such aspects.

In general, the individuals are part of the society and favorable directly or indirectly by the companies. The humanity is totally connected and the normality usually has shown a normality within the human's behavior and sense of feelings. The commanders should use a driving force "Company statements" as the guideline for the company benefit, the feelings used to take decisions and the tools to individuals teamwork motivated. The system is complex but when properly knowledgeable and manageable bring extreme benefits, direct and indirect to the companies and society.

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1 Department of Materials, Mechanical Engineering Faculty, State University of Campinas, Brazil. jairophd@ig.com.br
2 TTC The Trade and Training company‏, Germany kp@conrady.eu

3 Department of Basic and Environmental Sciences, Engineering School of Lorena, University of São Paulo, Brazil. Corresponding author: estaner23@usp.br