Managerial Decision Making and Theory of Life


What influences managerial decision making? Is it personality or business conditions (situation)? Traditionally, scholars and practitioners in the area of organizational behavior considered personality and decision making situation to be the major factors which influences decision making behavior. This line of thinking has two implicit assumptions; decision makers are brutally rational and rationality could be defined in absolute terms. For example, a Japanese and an American manager are faced with a decision making situation of reducing head count as part of a cost saving initiative. Let us assume that both these managers have similar personalities and are in similar business situations. Under these circumstances one would expect, based on tradition thinking, the decision outcome of both these managers will be more or less the same. But in practice it could be quite different. What could possibly cause this difference? The managers' Theory of Life (TL)! In addition to personality and situation there are other factors, which are neither classified under personality nor situational factors, which influence the decision outcome and are collectively referred to as Theory of Life (TL). Ones' TL is a composite function of his or her cultural, religious or political orientation, education and experience and many other socially learned ideals and ideologies. Unlike personality, TL could change all the time and unlike situational factors, TL could be altered by concerted effort by the individual.

After reading about TL, as practicing HR and training managers, one would wonder that what are the potential implications of this on training and HR policies. TL of employees should match with organization's mission and the way organization achieves its mission. That means it is important to understand early on whether there is a potential match between the TL of the new employee (or candidate for a job) and the organization's mission. At this point it is important to note that TL is not simply ones values and beliefs, it is much more than that. Also the concept of TL is not a single construct but a meta-construct which takes many aspect of ones view of the world into account.

The value of understanding the extent of the influence of TL on ones decision making behavior comes from our ability to use it in management and leadership development interventions. Most leadership and management development interventions touch up on personality traits which are difficult to change in the short run and only marginally changeable in the long run. Whereas, TL is a better lever in leadership and management development interventions, it is changeable and in many a cases has much more influence on managerial behavior.


Pad Kumar