Ethics and Decision Making in Business Establishment

Topics: Risk, Decision making, Decision theory Pages: 2 (677 words) Published: March 19, 2013
Planning for Exceptional Reactive Decision Making
When doing this, the first step is to look at the risks you face and determine if they have a high or low probability of occurring. You can use a Risk Assessment Matrix (RAM) to do this. To create a Risk Assessment Matrix, draw a graph, matrix or simple table with a vertical axis marked as "Consequences" and a horizontal axis marked as "Probability". Use a simple scale of 0 (very small) to 5 (very large). "Consequences" are credible potential worst-case scenarios that may develop. "Probabilities" are your best assessments of the likelihoods that individual consequences will occur. Now brainstorm the possible consequences to which you're exposed, and then assess the risk of each consequence occurring. Where possible, base these assessment of risk on real-world evidence and experience. Then plot these on the RAM. You'll find that that as you do this, your contingency planning priorities quickly become clear. Keep in mind that using a Risk Assessment Matrix is not an exact science: What it is is a useful visual tool for looking at the relative importance of each risk. This will allow for better planning and optimal outcomes when reactive decision-making must be relied on. But what to do when forced to make a reactive decision without having a plan in place? When this is the case, there is not time to complete a thorough RAM. Such a decision must be quickly made using appropriate reasoning, based on the best possible outcome. Making Unexpected Decisions Under Pressure

For instance, a team leader unexpectedly walks off the job in the midst of the company's largest project, jeopardizing the project's outcome and negatively impacting other areas in which he or she is involved. Obviously, work must go on. This is when it is important to make a quick reactive decision based on perceived risks and possible consequences. In such a case, it may be appropriate to gather the team and re-assign certain tasks so that everyone...
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