Managerial Decision Making In Risk, Uncertainty and Certainty at Google Part II
Virtually, all managerial decisions are made in a certain or uncertain environment. Uncertain environments have high propensities for risks. However, the environments for decision-making vary between organizations and environments. Environments of certainty provide the manager with reasonable surety of likely events under the reached decision. Most importantly, decision-making depends on available data and information regarding the issue (Bell, Raiffa, & Tversky, 2009). Therefore, the available data should have degrees of reliability and credence in order to direct the management to make decisions under the lowest possibilities of risks. In addition, these are crucial for providing the management at Google with comprehensible cause and effect relationship.
It is essential to note that at Google, most decision-making activities occur under meager databases. In this case, the management does not have the tools and capabilities to evaluate the credence and reliability of the provided data and information. Because of these practices, risky situations have emerged from these decision-making environments. It is essential to note that the management model of Google differs from traditional management models (McGrew, & Wilson, 2012). The two founders intentionally avoided traditional management models in order to create an atmosphere of challenges and creativity. These are the two crucial factors for risks within the decision making model at Google.
Following these model, the firm does not use information and data on the ground to form a foundation for its decision-making. The firm focuses on its knowledgeable workers because it identifies knowledge as the leading source of wealth. Therefore, Google requires its workers to apply their knowledge to tasks in order to facilitate productivity (McGrew, & Wilson, 2012). In addition, the firm wants its workers to apply their knowledge in new tasks in order to advance innovation. This leads to the notion that knowledge gives the firm capabilities to achieve its missions and goals.
The breakdown in decision making at Google can be illustrated using some of the failures at the firm. For instance, Google was forced to buy YouTube after its video streaming service and product, Google Video, failed. In addition to the video services, Google introduced a service in which users paid to search the web. However, customers refused to pay for the services, Google Answers, and the firm stopped the services. Other product flops by Google include its Web Accelerator that reduced internet access time through caching technologies (McGrew, & Wilson, 2012). However, these products had privacy and bug issues that forced the firm to drop the product. The Google Video Player was developed for playing video, but at that time, the market was flooded with video players, and customers did not consider the product.
An analysis of these product failures shows that the decision-making procedure at Google did not consider product and market research that would have given the firm much data and information for guiding the product release. In addition, these show that the firm operated under immense uncertainty because of the product failures. This means that the firm does not outline objectives and action plans for ensuring the realization of these objectives. In addition, effective decision-making models did not support the growth in complexity and size at Google. As a result, the firm makes some of its crucial judgments under uncertain environments (McGrew, & Wilson, 2012). It is essential to note that senior officers at Google are usually disconnected from the actuality at the firm. The team has faced management challenges over the years because of defragmentation. For instance, the firm does not have a meeting and travel schedule that has challenged communication at the firm. Additionally, the management does not share or integrate crucial information.
5.0 High-Level Solution
The establishment of high-level solutions depends on an analysis of the management’s attitude towards risks. In addition, this requires an understanding of the interaction between risks and returns. The management at Google has different perceptions towards risks. These arise because of the management’s emphasis on worker’s knowledge. In addition, Google has different work areas that involve different interactions with risk. For instance, the advertisement section has high propensity for risk and income. However, the firm must continue to facilitate innovation in this section that leads to higher degrees of risk. This means that different advertising platforms present high-risk levels for the management. Additionally, this has led to the perception that high risks lead to high profits (Chacko, 2008). For instance, Larry Page, a co-founder, believes that returns and risks have correlation. Because of this correlation, the firm spends enormously in product development, without studying the likelihood of the product failing in the market within 12 hours of launch. The co-founder believes that business and management have a duty of maximizing risks. This environments lead to uncertainty because of the potentials of the product or investment to attain production within the specified time.
In order to deal with the uncertain environment and the present risks, it is essential to ensure that the management orders the collection of information before making decisions. In addition, the management should find reliable and credible strategies, means and ways for identifying and dealing with risks. In case the risks and uncertainty persist, the management should seek ways for managing risks. It is essential to comprehend that risks are manageable business and organizational occurrences (Chacko, 2008).
The high-level solution will have its basis on the collection and analysis of accurate, credible and reliable information and data for guiding the decision making process. This will provide the manager with the right knowledge for managing the risk and the problem that leads to uncertainty (Chacko, 2008). It is essential for the management to avoid intuition and feelings during decision-making. Additionally, the management team should avoid generalization and subjective estimation concerning the prospects of Google.
Adequate information targeted at the decision making process is crucial in ensuring the management gets a clear picture of the situation. The collection of adequate information will lead to a trade-off that will lead to the abandonment of tendencies that check other aspects of the problem, and focus the management towards the solutions. Collecting information will occur in a systematic manner that will begin with the preparation for the collection and analysis of the collected information (Shapira, 2002). The analyzed information has present and future applications during decision-making. Data collection plans help in formalizing the data collection process.
6.0 Benefit of Solving the Problem
Solving the issue of decision making under risks and uncertainty at Google will lead to immense befits for the organization. For instance, the organization will have insights into the market requirements that will lead to research and development of market specific products. The firm will also cut costs in research and development because it has a tendency of producing numerous products that are not released to the market. This does not add value to the firm. In addition, collection of adequate information will ensure the firm identifies uncertainties and risks within its environment (Shapira, 2002). Active processes and engagement in data and information collection are crucial in ensuring the management has concrete comprehension of the problems facing the organization. This will lead to the elimination of risks through the elimination of uncertainties.
7.0 Business/Technical Approach
Increased efficient knowledge in management and facilitation of collaboration throughout the product and business lifecycle are crucial decision-making aspects. In addition, this will help in the reduction of errors during decision-making. This will be approached through technical processes such as extended business components, advanced decision-making, process knowledge components and integrated collaborative platforms. These approaches will reduce the costs and time for arriving at decisions. In addition, this will increase the productivity of Google and reduce the time to market for Google products (Shapira, 2002).
8.0 Business Process Change
The process of collecting information for making decisions will lead to diverse changes in the business process. The two co-founders of the organization oversee decision making at Google. The two individuals must assess the decisions made at the firm. The introduction of a research aspect to the decision making process will lead to the introduction of consultation aimed at providing administrative support (Bell, Raiffa, & Tversky, 2009). Consultations will help the firm to develop specialized administrative activities and address issues such as procurement systems and negotiating crucial business aspects such as product development, partnerships and labor agreements.
The use of adequate information and data will lead to changes in the organization’s approach to product development, labor agreements, partnerships and procurements. The collection and analysis of this vital data will help the organization to check or identify crucial aspects of the business. As a result, the management at Google will play an active role in analyzing the problem and seeking solutions to the problem in order to remove elements of uncertainty, and facilitate certainty (Bell, Raiffa, & Tversky, 2009).
9.0 Technological or Business Practices Used To Augment the Solution
Google has immense technological and business tools, practices, strategies and practices for augmenting this solution. The level of uncertainty and risks vary depending on the data and information available to the managers. Therefore, decision making in this case will be supported by business practices that recognize that management occurs as an artistic and scientific discipline. This means that the manager can use scientific approaches such as data collection methods for supporting theories (Bell, Raiffa, & Tversky, 2009). In addition, the management can use business tools in management such as accounting, motivational and accounting theories. In addition, Google can use vital technological tools such as accounting software and computer platforms for forecasting and analyzing data.
10.0 Conclusion and Recommendations
Google, an American organization that specializes in internet-based services, gained incorporation in 1998 after its foundation by Sergey Brin and Larry Page. The firm offers internet based products and services such as internet search, cloud computing, advertising technologies and software. Its main revenues originate from its advertising services. The firm operates solely on the internet platform, and faces immense competition from Yahoo, and China based internet organization. The environment for Google operation is characterized by certainty and uncertainty. However, the degree of uncertainty surpasses the levels of certainty. Because of these uncertainties, the firm usually performs decision making under risks. These risks arise because of inadequate information for comprehensive analysis. In addition, internet based services and platforms are new to the corporate and global setting. As a result, there is not much information and data in the various domains. Despite these uncertain environments, the firm must perform its organizational and business obligation of decision-making. These uncertain environments for decision-making have led to several product and service failures at Google. In order to ensure effective decision-making under low possibilities of risks, it is essential for Google to ensure comprehensive collection and analysis of data and information.
Google should ensure adequate collection of information for facilitating decision making. In addition, the organization should ensure that it checks different elements of the issue and the possibilities of uncertainty and risks before making decisions. Most importantly, the organization should ensure that the team actively engages in collecting and analyzing the information and analyzing the problem (McGrew, & Wilson, 2012). In order to protect against risks, Google should seek risk management tools such as insurance and partnerships.
11.0 High-Level Implementation Plan
High-level implementation of the approach for collecting adequate and reliable information and data for decision-making will depend on the technical and administrative support from the management and organization. It is essential to note that data and information collection are tasking activities and they require labor and financial support. Implementing this approaches will also require the decision making team to have data collection techniques, comprehension and skills. This means that the manager requires cognitive, normative and psychological perspectives during decision-making. This will enable the manager to possess crucial tools for data and information collection (McGrew, & Wilson, 2012). Implementing these requirements needs the establishment of an oversight body that will ensure decision making at Google is based on adequate and reliable information. In addition, the body will oversee the application of this information within organizational processes. The oversight body will comprise of people drawn from diverse departments.
12.0 Summary of Project
Decision making at Google is based on the knowledge of the workers. The organization does not use traditional and modern management practices that follow extensive research and use of empirical data during decision-making. Therefore, the firm should begin to use reliable, comprehensive and adequate data and information during decision-making. This was motivated by the fact that the firm has faced product failures and organizational meltdown. As a result, decision-making will be based on collected data and information. This will confer competitive advantages because the collected information will offer insights into the market. These approaches in decision-making will lead to changes in business processes because it will lead to a decentralization of decision-making.
Bell, D. E., Raiffa, H., & Tversky, A. (2009). Decision-making: Descriptive, normative, and prescriptive interactions. Cambridge: Cambridge University Press.
Bouyssou, D., & Wiley InterScience (Online service). (2009). Decision-making process: Concepts and methods. London: ISTE.
Chacko, G. K. (2008). Decision-making under uncertainty: An applied statistics approach. New York: Praeger.
McGrew, A. G., & Wilson, M. J. (2012). Decision-making: Approaches and analysis: a reader. Manchester: Manchester University Press in association with the Open University.