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Effects of Social Influence, Persuasion, and Risk Taking
Social InfluenceIn business most decision that guide the
performance of an organization are madeby a group of employees that
use decision making techniques to develop strategic decisions that
benefit the organization. In some cases, those decision makersare
influenced by protocols, persuasion, and the effects of social
norms to makedecisions that result in negative outcomes that can
cripple the organization. The following scenario demonstrates how
social influences can effect decision making negatively.Trouble in
the WorkplaceOn a hot July day Phillip, an equipment operator
working at a government facility, arrived at work. Phillip had been
off work for three days, reportedly due to
illness. Brad, Phillips boss, assigned him to a lower position,
in an effort tomaintain the continuity of the work force. Phillip
was upset, feeling that he was being punished for missing three
days of work and confronted his boss about being assigned a lower
position assignment for the day. After listening to Philliphis boss
reassigned him to a billet, commiserate to his grade. The employee
that was working in that billet was of lower grade and was
appreciative of the opportunity to work in a higher position. As
the day progressed, the Phillip and Bart began to have problems
working together. The lower grade employee, Bart felt that Phillip
was punishing him for stepping up and working in his absence.
Phillip felt that Bart was upset because he was back and Bart had
to move back to hisprevious position. Both men began to argue
loudly, drawing the attention of other employees throughout the
facility. When Brad showed up to defuse the situationseveral
employees approached him and stated that they heard Phillip make a
deat
h threat to Bart. The supervisor separated the two employees and
began his informal investigation into the incident. After receiving
several statements from other employees, the supervisor discovered
Phillip had possibly threatened to killBart and had thrown his hard
hat at Bart during the argument. The supervisor quickly informed
the facility director who directed both employees to go home
untilfarther notice; they were placed on administrative leave
pending a formal investigation. The director solicited advise from
his supervisors, of the six, threethought that a deeper analysis of
the possible causes were needed, and two thought that the death
threat was so egregious that termination was the only course of
action. In their discussion of how to handle Bart four supervisors
believed that Bart was the victim and Phillip the aggressor, while
two believed the opposite. Based on the input from the supervisors
the director made the final decisionby himself. Bart was called
back to work a week later and given a seven-day susp
ension. For his actions during the incident, Phillip was
terminated, pending a formal review of the case by the Resident
lawyer of the facility.The facility manager called all of his
supervisors in to discuss the situation and possible courses of
action. Each supervisor recommended differing methods forhandling
the situation. The six managers decided to reduce Barts suspension
to three day, and four supervisors wanted to continue the
termination of Phillip. While the attorneys were processing the
termination, Phillip remained on administrative leave receiving
full pay and benefits. Six months later the governments attorneys
recommended that Phillip be offer another opportunity to work,
because if Phillip fought the termination there was a strong chance
that the government would
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lose the case. Eventually Phillip returned to work without being
suspended or terminated and Bart served his three-day suspension
and returned to work.The above scenario demonstrates how social
effects can lead to decision that arecounterproductive and
divisive.Challenges to Sound Decision MakingBeing in a position of
authority is challenging to ethical and sound decision making.
Leaders sometimes focus on what is good for the organization or the
corporate culture rather than what is an ethically sound decision.
According to Nonaka& Takeuchi (2011), experiential knowledge
gives a leader the best tools for decision-making. Knowledge gained
through experience has been important to good leaders knowing how
to handle decision-making situations.Biases and RiskDecisions that
involve risk should be evaluated differently. According to Schrift,
Netzer, & Kivetz (2011) in decision involving risk, such as
large purchases,unskilled decision makers mitigate the risk by
attempting to simplify the problem of denigrating the alternatives.
As in the scenario, when the director was faced with the decision
of what to do about the issues he decided to mitigate the risk to
the staff by terminating the employee. Whether his decision was
based onthe input of his supervisors or his biases, his decision
was not well developed.Maule & Hodgkinson, 2003), evaluated the
perspectives of behavioral decision making, as seen in the
scenario, and concluded that human judgment and decision making is
clouded by errors and biases. Furthermore, their study shows that
decision makers the use of heuristics, simple modes of reasoning,
have the ability toflaw the perceptions of the decision maker to a
point where judgment is based on
their interpretation of the decision opportunity.Mistakes of
LeadershipIn the scenario, the management team made several
decisions based on bias, risk,and heuristics that resulted in an
unfair labor practice. The leadership shouldhave been allowed to
explore the root causes of the situation. As with any problem,
before a decision matrix can be created decisions team should
develop opportunities and alternatives to help in interpretation of
the situation. Though themanagement team discussed the situation,
the ultimate decision was the Directors and his decision did not
reflect the opinion of the team. The organizational protocol at the
time was to send employees involved in physical confrontations home
for the day. This is a situation where protocol influenced the
decision process, had the employees remained and were interviewed
by their supervisors, information pertinent to the scenario would
have surfaced.
Phillips parents were killed three days earlier in a car crash
and he was makingfuneral arrangements without the knowledge of his
fellow employees. The leadership of both employees failed to
properly evaluating the situation prior to developing a decision.
Three areas should be defined prior to developing a decision in
uncertain situations, what are the alternatives the outcome of the
decisions (how will they effect the employees and the
organization?), and the benefit thataccompanies each decision,
(Evans, 2010).Social effect MiscuesIn addition to not fully
evaluating the situation before forming a decision themanagement
team fail victim to the heuristics of the social culture of todays
society. When the director requested input from his supervisors,
two supervisors andthe director felt that a death threat was
something that must be taken seriouslybecause of the current social
climate of employees returning to work and killin
g fellow employees. This form of flawed risk analysis, according
to Evans et Al,risk analysis examines the impact of uncertainty, at
no time did the managementteam attempt to examine the risk
associated with terminating an employee basedon threats that were
not verified as true, (2010).PersuasionIt can be assumed that
persuasion did not influence the directors decision. Thatassumption
would be false, the director had obvious biases towards
supervisorshe had known the longest. His decision were backed and
supported blindly be those supervisors that had worked for him the
longest. This form of bias serves to alienate the junior supervisor
and create an environment where true team develope
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d decisions cannot be made.In conclusion, the scenario discussed
was an actual case, two years after the case the two employees sued
the government for unfair labor practices and won. Bart was awarded
the monetary damages because he was the only employee that was
reprimanded. Manager and management team must understand the
decision-making toolsdo not only apply to mathematical analysis of
decision situation but behavioraldecision also.
ReferenceEvans, J. (2010) Statistics, Data Analysis, and
Decision Modeling, Prentice HallMaule, A., & Hodgkinson, G. P.
(2003). Re-appraising Managers' Perceptual Errors: A Behavioural
Decision-Making Perspective. British Journal of Management, 14(1),
33-37. doi:10.1111/1467-8551.1401007
Nonaka, I., & Takeuchi, H. (2011). The Wise Leader. Harvard
Business Review, 89(5), 58-67.Schrift, R., Netzer, O., &
Kivetz, R. (2011). Complicating Choice. Journal of Marketing
Research (JMR), 48(2), 308-326. doi:10.1509/jmkr.48.2.308
