Impact of Outdated Decision-Making Techniques on Executive Leadership

Declining Executive Leader’s Decision Effectiveness

Having learned how decision-making occurs overall and in business, this section describes how business decisions have been ineffective when using traditional theories and styles. Research shows that leaders make poor decisions when using old-fashioned techniques. However, when practitioners apply academic decision-making theories and styles in real-world situations, leaders find these tools and methods cumbersome and irrelevant to decision quality and effectiveness (Yates et al., 2003).

Effective decision-making. Effectiveness can be linked to planning ahead, to tying decisions to business objectives, and to providing authoritative control (Barnard, 1938; Bennis & Goldsmith, 1997). Bennis and Goldsmith (1997) expanded upon Barnard’s research stating that not only is decision-making an essential function for executives when managing a business, but that leaders use their experiences to make effective decisions. The executive leader’s role in the organization has the highest impact on organizational performance. The business environment is in a constant state of change and is ever evolving (O’Keefe & Wright, 2010). Today, leaders are required to make business decisions under difficult conditions, such as limited time, uncertainty, high stakes, vague goals, and unstable conditions

Leadership in organizations is driven by uncertainty. How leaders make decisions based on that uncertainty determines the performance of an organization (Hatch, 1997). Decisions are made on the basis of information available about various environmental variables. However, the variables are many and complex in nature. They may be related to political, economic, social, or other unknown variables. It is not possible to study all such variables in depth because of inadequate information or data. This leads to inaccuracy in