Importance of Time in Decision Making
Importance of Time in Decision Making
Decision making is one of the most important functions of the management in an organization. Decisions are the essence of management since they have a high impact on all the organizational plans of activities and results.
Decision making involves a choice between alternatives. It is the ability to react to the information available in the environment, and to select one of the few different action alternatives available. If there are no alternatives, then no decisions are needed or can be made. A decision is purposive and is made for attaining some objective. That is, there is a necessity of a reason for making a decision. Further, decision making is a course of action consciously chosen from available alternatives for the purpose of achieving the desired result. Also, decisions are required to be taken timely to avoid any emergency situation.
Time and decision making has a relationship. There are three elements of time which impacts the decision making process. The first relates to the timing of making decisions. The second is the availability of time for making the decision. The third is the time for implementation of the decision. The successful outcome of the decisions take place when these three timings are properly considered in the decision making process.
Decision making has a time factor. There are several interactions between time and decision making. Time is always present and is a prominent dimension in all decision making actions. Decisions take time to make. They are made to be implemented in future time. The consequences of decisions develop over time, and these consequences are sometimes thought about and debated for a long time afterwards.
Knowledge and experience of the decision maker has a big influence on the time taken for the decision making. While knowledge plays a major role in speedier decision making, the same cannot be applicable in case of experience. In case of experience, the memories can be distorted, or the environment for decision making may have undergone certain changes and may include certain different aspects. The longer is the timing of previous experience the higher is the distortion expected.
The process of decision making is one of the most complex mechanisms of human thinking, as various factors and courses of action interfere in it, with different results. It is about making choices by identifying a decision, gathering information and assessing alternative solutions. Decision making involves a series of cognitive operations performed consciously, which include the elements from the environment in a specific time and place.
Decision making time is an important issue for the successful outcome of the decisions. Timing of the decision is important since it allows decision maker to visualize various elements needed for the decision and helps the decision making more coordinated with critical key points considered while making the decision. Being indecisive often means that all or most of the best options have been eliminated and a decision maker is only left with the least beneficial option. Hence, delaying decisions either to get additional information or to take additional time to assimilate all the available information is not always helpful in decision making.
Decision making done based on the experience of the decision made on a similar event earlier can be erroneous since the earlier event had a different setting. With time, the environment changes and it does not allow a decision maker to depend totally on the previous experience. At best, earlier experience can show a decision maker a pathway for making a decision.
Decisions made today are for action in future. The consequences of today’s decisions lie in future. Decision making always has its future orientation. Hence, it can be seen as somewhat hazardous to base decisions on the past. Yet, the past can influence the current decision making process in many ways. One way is, naturally, learning from the past and not to repeat what is perceived as erroneous decisions.
There are many different relationships and interactions between time and decision making. It takes time to make decisions and sometimes the decisions dynamically change with the passage of time. However, there are a few aspects of time which are unique to their relationship with decision making. Further, when making a decision, there is normally a tradeoff between the speed of the choice to be made and its resulting quality.
During decision making, one of the alternatives is preferred from the available alternatives. There is growing evidence, that preference has a function of time relationship. With time the available alternatives undergo changes and with that the preference also undergoes changes. A graphical illustration of the changes in preferences as a function of distance of time to the decision is given in Fig 1.
In Fig 1, the decision maker is facing a choice between the preferred option represented by thicker line and the non-preferred option represented by thinner line. Much before the decision made, the preferred option has a higher overall reward. At the time of decision making, the decision for one of the non-preferred alternatives is taken since the value of the chosen alternative seems higher. Finally, after the decision has been made, the value of the chosen alternative over the earlier preferred option diminishes and the choice of the chosen alternative in retrospect becomes questionable. In this case of Fig 1, the changes in the discount rates are the same before and after the decision. In reality, there are most likely cases in which the discount rate is higher before or after the event.
Fig 1 Valuation of preferred decisions and timing of decision making
Changes in preferences as a function of time relationship are sometimes reasonable, but they can occasionally lead to self-defeating behaviours and can form serious obstacles to following a plan of action. Hence, changes in preferences are required to be overcome.
Time as a medium within which decisions take place
Any decision making process needs time for processing the information. Some decisions are very fast, and the decisions in several cases emerge with lightning speed. Such decisions are habitual or intuitive non analytic decisions and are not based on extensive information processing. However, these decisions endure for short duration. The more a decision making process is analytic; the more time is needed for decision making. Decisions requiring long time are generally laborious. Normally, most of the decisions fall in one of these two categories.
Decisions are either static or dynamic. The differentiating factor between static and dynamic decisions is whether decision maker actively takes time into account. In making a dynamic decision, it is not enough to know what is to be done, but also, when it is to be done. Taking time into account can be either in terms of considering the duration needed to make the decision, the optimal time to make a decision, or the changes in the decision structure as a function of time. Static decisions, on the other hand, are the decisions in which the decision maker takes no account of any aspect of duration and treats the decision task and process as static. An example of dynamic decision is that of a firefighter trying to control a fire where the context and the decision environment change over time, either as a function of the sequence of decision environment, independently of them, or of both. In fact, day to day decision tasks are dynamic, that is tasks in which sequence of decisions are continuously changing. Some simple decisions are also fall in dynamic category, since more likely they have long term implications and influence other decisions which the decision makers are likely to make. Only dynamic approach can do justice to the complexity of real world decisions.
There is a relationship between decision makers’ timing of actions and the evaluation and the rate of change of the dynamic system in which they are operating. Normally, the higher the rate of change, the earlier the decision maker is to have his intervention. But, generally people are not sufficiently sensitive to the rate of change and instead base their intervention decisions on the current state of system. As a result, there is lesser time available for the corrective actions when the system is rapidly deteriorating. This results into sub-optimal performance. Hence, decision maker is to be good at the right timing for the intervention.
Time as a resource and as a related characteristic
Decision making is a complex cognitive process. It requires attention and mental resource. The impact of limited resources can be harmful. Mental resources get reduced under time stress since large amount of information is to be processed in short period of time. This causes deterioration of decision making process.
Since decision making is usually a time consuming process, time is an important resource for making optimal decisions. The allocation of less time than what is needed for making decision can cause a feeling of time stress and can harm the optimality of the decision making process. Time stress takes place because of the shortening of the duration needed for decision making. Time stress can cause the decision maker to choose the alternatives which may not give the optimal results. The importance of understanding how and why time stress influences decision making comes from the fact that in several real life situations, and especially in the emergency situations, shortage of time, or the existence of a deadline is a natural characteristic of the decision making environment.
Time stress is an important variable which has an impact on the nature of the decision making process and in particular, on the strategies the decision maker selects. In general, there is negative effect of time stress on decision making effectiveness. However, some of the consequences of time stress are not necessarily negative. As an example, framing of bias is weaker under time shortage. In general, the effects of time stress on decision making are (i) a reduction in the information search and processing, (ii) a reduction in the range of alternatives and dimensions which are considered, (iii) an increased importance of negative information, (iv) defensive reactions, such as neglect or denial of importance information, (v) boosting of the chosen alternative, (vi) a tendency to use a strategy of information filtering which means that information which is supposed to be as most important is processed first and then processing is continued until time is up, (vii) increased probability of using non-compensatory choice strategies instead of compensatory ones, (viii) forgetting of important data, and (ix) wrong judgement and evaluation.
Time pressure (that is, a decision must be made by a certain point in time) has been shown to be one of the most important decision task variables. Errors in judgement can be made from either deciding too soon (rush-to-judgement) or from delaying decisions too long. An important effect of time pressure on decision making is that it changes the decision strategies. If the decision maker is not sensitive to the duration in which he can execute his decision, he tries to apply normal strategies under time pressure, but due to shortage of time and mental resources the decision maker is not able to complete all the steps or makes reasoning errors.
Decision makers facing time limits are forced to resort to strategies which are less demanding, less time consuming but also less accurate. They try to select a decision making strategy which save them from considerable effort at the cost of only a small decline in the accuracy. With this adaptive strategy, decision makers adjust to time pressure in ways which are sensitive to the accuracy of the decision making process.
Under moderate time pressure, decision makers adapt by being more selective in the information they consider, but under severe time pressure, they shift to strategies which are qualitatively, but not just quantitatively different. The utilization of these strategies is a necessity for performing well under time pressure.
Deadlines for taking decisions cause time pressure. They have a strong influence on decision making behaviour. Under deadline conditions, there are two forces which are working. Under the first force, deadlines increase the need to take decisive action, while under second force; deadlines can create feeling of lower decision making quality.