Decision Making and Greyhound
Greyhound Lines is a bus transportation company that had problems with operating costs and customer service. It did not have union in solving vital problems, more concretely, while Greyhound’s executive faced with these issues by reorganizing such as massive cuts in personnel, routes’ and service, along with computerization, middle managers in computer programming, human resource and terminal managers considered that executive’s solution was inappropriate. As a result, it was impossible for them to handle, did the number of passengers not only plunged dramatically but rivals also had been picking off Greyhound’s customers.
To understand more deeply about what is going on in Greyhound Lines, we turn to discuss about the way executive managers made decision and analyze what was not satisfactory. 1. Was the decision facing Greyhound executives, programmed or non-programmed? From the case study, we can obviously identify with certainty that Greyhound’s executives were facing with non-programmed decision. Let remind a bit more about non-programmed decisions, that apply specific solutions crafted for a unique problem. 1] It was the first time facing with being unaffordable to dispatch nearly empty vehicles or have buses and drives on call to meet surges in demand. They did bring two solutions to reduce operating costs and improve customer services. For examples of non-programmed decision, first, Greyhound’s top managers introduced Trips through computerization of everything from passenger reservations to fleet scheduling. Modern technology helps work out automatically, quickly and effectively that may bring Greyhound for competitive advantages.
They seemed to be lucid decisions because applying technology leads both saving labor cost and time. However, is technology always good or it also come long with various conditions? The second example of non-programmed decision was cutting labor force, routes, and services. It may be a suitable way to cutting cost . Nevertheless, whether Greyhound can improve customer service by these massive cuts? To conclude, Non-programmed decisions are made when new and unexpected situation occurs and information deficiency. Thus every executives manager need to awake to give solution carefully or they will influence badly. . Do you think Greyhound executives should have used the classical model, administrative model, political model or judgmental heuristics approach? Which do you believe they used? Discuss In my point of view, Greyhound executive should have used classical model that describes decision making with complete information because of some reasonable evidences below. Firstly, they exactly understood what problem they was facing with that they clearly defined were difficult in providing buses which is of maximum capacity and they are not providing enough bus services when the demand for rides increased.
Secondly, they got knowledge of possible alternative that managers in computer programming urged a delay in introducing the computerized Trips system, to work out bugs in the highly complex software. Next, they knew clearly their consequence by being provided adequate and significant information from other managers in different departments. For instance, the human resource managers pointed out that the terminal workers were unskilled in using Trips- new technology or they had needed extensive training program before they used the new system.
Besides, the terminal managers also warned about their partial customers’ finance status such as they did not have credit card or even telephone to use Trips. Consequently, if they continued to take over applying Trips program, they might land in an impasse. The result was proven, the number of passengers fell down and they lost their market share. Although they had some above limit respects, they still have based on their sufficient information to make an optimizing decision to rescue themselves from problems and classical decision model is better choice.
However, they used administrative decision model that affected a whole badly. Greyhound’s executives ignored all other department managers’ ideas and essential information. This was the very reasons for create boundaries, cognitive limitation that leaded them to making decision with partial knowledge. They put themselves into risky and uncertain conditions, which made them considered that administrative decision model was the most useful. Then they chose the first alternative that appeared to give a satisfactory resolution of the problem. They did mistake in running new system in that inappropriate period.
In conclusion, I believe that the classical model is more appropriate to be used due to the clarity of the problem, condition of certainty and the availability of information that Greyhound actually had. 3. Analyze the Greyhound’s case in terms of the five steps of managerial decision-making process. Discuss and give your idea. Five steps of managerial decision- making process are finding and define the problem, generate and evaluate alternative solutions, select preferred solution and conduct ethic double-check, implement the solution and evaluate results.
The first step in decision making- identify and define problem is vital step that impacts on how managers determine suitable strategy to solve problem. Greyhound done well in this step, they found that their major problem that neither broadly nor narrowly is inability to dispatch virtually empty buses, having employees who were not displaying professional behaviors and also not having drivers or buses on call to meet the demand by customers. That was also the root cause not symptom of problem and they found out their correct trouble to face with.
The second step is generate and evaluate alternative problem, at this stage, more information is gathered, more involvement of other people is needed that will create the whole picture with sufficient information to evaluate alternative as well as consequence. However, in this step Greyhound did all mistake, executives gave solution too quickly and chose an alternative that was not as good as others that might be discovered. If I was Greyhound’s executive, instead of making decision in information deficiency, I will get all other department to commit to have whole vision about company’s respects.
After that, I would conduct the cost-benefit analysis. This analysis allows the comparison of the cost and benefits of each potential course of action whereby the best case scenario would be having the benefit of solving the performance deficiency to outweigh the cost of implementing the alternatives. Fixing bugs is just temporary solution so at the same time, I will create training program for employee know how to use Trips system. Hence, with careful preparation, I will turn into new system at the right time in the future to make more competive advantage. Third step would be choosing a solution.
The Greyhound executives actually made a satisficing decision. Meaning, they chose the first satisfactory alternative that came to their attention. In this case, they were dead set on choosing to implement the reorganization plan and introducing computerization. This is a decision made under the behavioral model, through which decisions are made with limited information and bounded rationality. If I was an executive, I would consider the suggestions made by my managers before I choose a solution. This is an optimizing decision and an optimizing decision allows me to choose the lternative giving me the absolute best solution to a problem. Subsequently, we have to implement the solution. Participation is crucial for a successful implementation. Participation is evident as the middle managers, managers in computer programming, the Human resource department and the terminal manager all contributed their ideas. Nevertheless, the managers had an equivocal thought with the executives. Surprisingly the plan was still given the green light by the executives. Given the solutions presented by them, I would have tried to reach a compromise.
This will show my respect towards them as a fellow employee. Finally, we must evaluate the result of the decisions made. A continuity of commitment to gather information on performance result allows us to make corrective actions. The outcomes were not positive for the case of Greyhound Lines Inc. The strategies and premature introduction of the new computerization reservations system resulted in inefficiency of customer service, dissatisfied customers and a decrease in ridership. The management ought to formulate corrective measures after identifying the dire state of the company.