Rational Decision Making Process

Rational decision making is a systematic method of selecting among the available choices based on facts and reasons. In this process the business manager has to analyse various steps to review the relevant facts, observe them and get idea about possible outcomes before taking up any decision. There are several factors that can influence decision making in case of managing uncertainties like past experience has a great influence in present and future decision making, when a positive outcome is received from a decision, people start deciding in a similar way in similar situation, (Dietrich, C, 2010). People usually avoid making decisions that caused negative impact in the past. Cognitive biases also influences decision making as it is based on generalizations and observations that can cause memory errors, judgements that are inaccurate and faulty logics. Age difference can also influence the decision making as people of lower age group have limited access to resources and education that makes them susceptible to experience negative impact that is beyond their control, this age group often ends up making poor decision.

Import Decision Made by Dole Food Company

Dole is the largest producer of fruits and vegetables and makes import from other countries to make supply of fresh fruits and vegetables in its operational areas (Dole Food Company Inc, 2016). Dole has to make a rational decision relating to its supplier and supply chain. It follows the following procedure:

Selection of Supplier and Related Problems

Before the identification and selection of a suitable supplier, Dole conducts a research related to purchase, marketing and quality assurance (Eldridge, B, 2012). They identify a few suppliers and make assessment to their capabilities and then compare the price offered by various suppliers. They assure that cost should not be a lone driver. Make sure that the supplier has agreed to make commitments for timely deliveries and is responsible, as they deal in the supply of fruits and vegetables which are highly exposed for decay after a certain period.

Search and Weigh the Alternatives

After identifying suppliers Dole conducts a survey to identify alternative suppliers who are willing to supply better quality products for a lower cost. Price plays a very important role in determining various alternatives available in the food market. All suppliers are categorized according to their significance and level of risk. Dole makes sure that it has followed all the legalities and ethics in making a research for best suppliers for the food products.

Choosing Among Alternatives

Dole makes a wise decision in choosing a suitable supplier and thus eliminating other options. When they is an urgent need for supply of food products a best supplier is selected amongst the eliminated ones. Dole works for satisfying the needs and wants of their customers for fresh fruits and vegetables and other food related product, so they ensure a standard quality to make a good reputation and to gain customer loyalty.

Mode of Transportation

Dole Food Company keeps their main focus on transportation. They ensure faster delivery of products as they are subjected to natural decay. Sometimes due to natural disorder it becomes difficult to make delivery on time, which causes a severe loss to the company.

Ensuring Quality for Customers

Dole is responsible for communicating and trending of microbiological testing of their process and providing final product materials that are approved by the testing authorities. (Gale, T, 2006). All these processes involve higher cost and is time consuming, but Dole considers safety of their customers to be their first priority.

Managing Uncertainties

The import of food products process in Dole Food Company has many uncertainties coming in its way. There are a variety of system that can be followed it holds certain uncertainties relating to technology, methodology and epistemology. Food system models hold some value in managing the constraints and knowing about the system behaviour and ensuring quality in the models (Syrett, M, Devine, M, 2012).

Decision Making Before Importing Food Product

Importing food product from overseas is a very complex task for large retailers like Dole.  Many factors are concerned before making the first import order. It is important to determine the price variation available in possible alternatives and choose the best alternative offering better quality in a price that is comparatively low among all the alternatives. The first decision is to find out that the product that is to be imported is available in the local market. It should be assured that there is enough demand for the food product that is to be imported. Identify the potential customer by conducting survey to ensure that importing will bring profitability in the business.

The consent from the Government must be obtained before spending money on decision making process and research. Another important factor that Dole should take into consideration is the cost of import; make estimations and calculations that what will be the cost and charges involved in importing the product. Importing cost includes transportation cost and insurance cost which is totally dependable on negotiating the trade terms. GST and customs duties are also a part of import cost. It relates to al the financial charges and services like customs brokers and freight forwarders. Make sure that the import is cost efficient this can be done by making the accountant and investment advisers of the company to calculate the actual cost that will be incurred. The food particles are exposed to decay within a short duration of time; it becomes hard to ensure that fresh food products are being transferred. In case the food received is not appropriate or is defective exchange procedure will consume a lot of time. Because of time issues Dole may have to deal in the product that is inferior in the market due to its low quality (Ellefson et al., 2012).

Rational Decision Making – A Normative Concept

Usually most decisions in Dole are made under uncertain circumstances. A decision has to be made rationally by not being sure that what will be its outcome. Dole often makes a decision that shows highest expected utility (Bell, D, Raiffa, H, 1988). The company should apply normative theory in making decision but usually we end up choosing a descriptive theory or a predictive theory in which we predict about the decision of the people under uncertain situation. In normative concept a person should make decision according to the steps and process defined in the decision making model but sometimes it becomes very difficult to relate this concept to be relevant, (Briggs, R, 2014).

It cannot be denied that normative theory has certain ethical value that can help in making rational decision but it is not very effective in making business decision as it is totally based on assumptions; they provide pragmatic framework for making right judgement but results in making wrong decision. Normative theory is said to be too neat and tidy (Crane, A, Matten, D, 2007) that is not acceptable in the real world of business where the conditions are highly dynamic. They involve a very high range of abstraction from reality as the real world to too complex and normative concept is a principle approach of resolving problem about behaviour which becomes irrelevant in connecting to the real world context in case of decision making. They are highly academic; it is a reflection of the theoreticians who lived in a world that was different from the present world. The main focus lies on the principles and neglects the importance of human behaviour and their emotions (Fitzgerald, M, 2012).

Factors Affecting Decision Making in Dole Food Company

Whenever a decision has to be made, it involves several factors that have some influence over business decisions. Such issues includes: Perception, Organizational and Environmental Issues.

Perception Issues

It can be described as a way in which Dole interpret its environment. Dole can be influenced by the background and experience of the individual, personal values and expectations from certain things and personal interests. Situational factors such as time and location also has certain influence.

Organizational Issues

Organizational Issues includes issues related to the policies and procedures, organizational hierarchy and organizational politics in Dole. It has formalised their policies and procedures to resolve issues and problems, and help in decision making. They keep their procedures documented so that proper records can be maintained which can guide managers in resolving problems with the members.

Environmental Issues

The external factors have a great influence on the decision making. The economy; government legislation; customer reaction towards the products and services; and the market of operations are the heads under environmental issues in the company.

Ethical Practice in Decision Making

Ethical code of conduct in a business is must to earn a reputation for a business. The main objective of the company should be making profits by maintaining the ethical values and standards while carrying out business activities. Leadership plays a very important role in decision making; the leaders of Dole should always consider ethical practices in every situation (Phillips, C, 2016). Decision making is the true test of the leader in determining his ethical conduct. Ethics and respect in a business goes hand in hand. To gain reputation a business should not practice unethical activities and show respect to their customers to gain respect in return.

The Limitations of Mixing Decision Models

There is basically two decisions making model and Dole should not be mix their process with one another. Once a wrong model is selected it becomes very difficult to correct the wrong decision made due to lack of time and extra cost. When decision is made under pressure it usually do not bring effectiveness and success (Harrison, R, 1999). Some decisions are suppose to be taken urgently; in such situation a wrong decision will bring negative impact on all the business activities of Dole. 

Conclusion

Dole Food Company should work to remove uncertainties involved in a business to take rational decision. The company should first identify the problem then collect information and details, and select among the best possible alternatives. It is a process from problem to solution. The rational choice made will satisfy the conditions of deductive completeness and brings consistency. Making decision according to the model is only acceptable when everything is going as it was planned. It is irrelevant for a company like Dole to follow the principles and ethics of business decision model when the behaviour and needs of people keeps taking variations.

References

Bell, D,  Raiffa, H. (1988). DecisionMaking: Descriptive, Normative, and Prescriptive Interactions. Cambridge University Press.

Briggs, R. (2014). Normative Theories of Rational Choice: Expected Utility, Stanford Encyclopedia of Philosophy. Retrieved 23 September 2016 from http://plato.stanford.edu/entries/rationality-normative-utility

Crane, A, Matten, D. (2007). Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization. Oxford University Press.

Dietrich, C. (2010). Factors that Influence Decision Making. Decision Making: Factor that Influence Decision Making, Heuristics Used, and Decision Outcomes, 2(2), 1-3. Retrieved 23 September 2016 from  http://www.inquiriesjournal.com/articles/180/decision-making-factors-that-influence-decision-making-heuristics-used-and-decision-outcomes

Dole Food Company Inc. (2016). Fresh Solution for Fresh Produce. Retrieved September 2016 from http://go.sap.com/about/customer-testimonials/consumer/dole.html

Eldridge, B. (2012). Supplier Manangement: Six Steps to Selecting the Right Supplier. Retrieved 23 September 2016 from http://www.foodsafetymagazine.com/magazine-archive1/augustseptember-2012/supplier-management-six-steps-to-selecting-the-right-supplier

Ellefson, W, Zach, L, Sullivan, D. (2012). Improving Import Food Safety. JohnWiley & Sons.

 Fitzgerald, M. (2012). Managing Under Uncertainty: A Qualitative Approach to             Decision Making. Australia: Pearson.

Gale, T. (2006). Dole Food Company, Inc. Retrieved 23 September 2016 from http://www.encyclopedia.com/topic/Dole_Food_Company_Inc.aspx

Harrison, R. (1999). The Managerial Decision-Making Process. New York, NY: Houghton Mifflin Company.

Kreitner. (1989). Organizational Behaviour 8E (Sie). Tata McGraw-Hill Education.

Phillips, C. (2016). Six Characteristics of an Ethical Business. Retrieved 23 September 2016 from http://smallbusiness.chron.com/six-characteristics-ethical-business-22401.html

Syrett, M, Devine, M. (2012). Managing Uncertainty: Strategies for Surviving and Thriving in Turbulent Times. John Wiley & Sons.

 

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