(Qualitative Decision Making)
In this section we employ a number of insights from organisation behaviour, social psychology and sociology to enable us to gain a wide understanding of decision making, its importance and interdisciplinary nature.
We are concerned to explain a variety of ways of understanding decision making and will concentrate in particular on the rational and the administrative approaches.
Making decisions is what all managers will have to engage in and so we will consider the individual approaches and skills of decision making.
You will be encouraged to explore your own decision making preferences and one of the supporting lectures will examine what we know of decision makers and their styles. Also relevant here is a review of the barriers to effective decision making that have been identified in research.
Increasingly important for the practice of managers is that they understand and are able to handle the ethical issues that are encountered in decision making.
As a member of group I should write 275 words or more for part 2
(please read the Report file, me and my group have done part 1 and nearly half of part 2)
Part 2; which I would like you to write about it, is about evaluation of the group decision making process. This will be firmly based upon concepts and ideas drawn from the decision making literature. Your team will also consider the decision itself in terms of models of decision-making theory (you will find the theories that I should use some of them in the power point file)
• Harvard references
• You could use 4 or more references
Part 1: Produce a “Decision Document”.
For this part of the assignment your team takes on the role of a group of consultants working with other teams of consultants to prepare a bid to build a hospital for the Mid Southern Hospitals NHS Trust. It has to be stressed that there are other teams working on various aspects of this bid.
Your consultancy has only recently commenced business and this is the first major task you have undertaken. It has been suggested that if you do a good job here then there is the clear possibility of further work. Given the current economic climate this is important.
The task of your team is clear – you are charged with producing a “Decision Document” making clear recommendations concerning the following:
What you regard as the best location for a hospital in this district.
An outline of the thinking that lies behind your decisions and justification for the decisions including key evidence or criteria that you influenced you. This is a very important section. It is not sufficient to simply make a decision. You need to justify that decision: show what you are aiming to achieve and also what are the most important features of your chosen site in comparison to others.
An evaluation of the key political forces impacting upon this decision. Provide some indication of the likely ways in which these might be dealt with.
Other teams of consultants involved in the project will begin working once your report is accepted. Their focus is very different to your own – it will be on detailed decisions to do with the bid (such as the exact look and feel of the hospital) and will not overlap the work of your consultancy. Yours is a key decision because all subsequent decisions depend upon it. You are not only required to arrive at decisions but also to offer a clear insight into your thinking including what you were principally seeking to achieve.
This part of the assessment requires you to demonstrate your capability to participate in active decision-making processes with others and to develop a reasoned and creative approach to decision making. In addition you are required to demonstrate professional credibility in being able to produce a credible document. This part of the assessment will be approximately 2000 words.
Part 2: Produce an evaluation of the group decision making process throughout the process of constructing the “Decision Document”. Your group will demonstrate appropriate reflection and analysis of the decision making process throughout the construction of the tender. This will be firmly based upon concepts and ideas drawn from the decision making literature. Your team will also consider the decision itself in terms of models of decision-making theory. For this section to be effective your team will need to be reflective at all times. In practice this means that the team must not only make a decision but be prepared to comment upon that decision and the decision making process that emerged. This part of the assessment will be approximately 2000 words.
Each part is worth 50% of the total marks available for this assignment.
Each member of the group must assess the other members of the group in terms of their contribution to the assessment, the exact criteria for peer assessment to be decided by the group themselves. All members of the group must sign the peer assessment to confirm they agree with the peer assessment. If there any disputes concerning the peer assessment they should be referred to the module leader.
Business Decision Making
Assessment Case Study (Behavioural Component)
You are a group of consultants charged with making a decision about the location of a hospital to be built for the Mid Southern Hospitals NHS Trust. The financing of this project is by a consortium of companies comprising banks, building firms, developers and service providers. The overall aim of the consortium is to put together a bid and win the contract to build and run a new hospital under the scheme that allows private consortia to build new facilities and lease them back to the NHS, usually along with non-clinical support services such as maintenance, catering, cleaning, laundry and portering. Lease agreements are legally binding and have a typical duration of 25 years. The NHS trust pays an annual payment to the consortium, which covers construction costs, rent and support services. These annual payments are, in general, much higher than the capital charges that would have been paid had the treasury financed the building costs of new facilities. In addition, rather than circulating back into the NHS, unitary payments flow back to the coffers of the private companies that make up the consortium, and are issued as dividends to shareholders. Winning the contract is, therefore, an attractive proposition.
The contract in question involves building hospital(s) to best serve the Mid Southern Hospital district. Your consortium is in direct competition with a number of other consortia. The bid is complicated by your (and the other consortia) attempts to increase the available profit from the deal.
All current hospitals in the district are extremely old and beyond their useful service life. One issue has to do with the number of replacement hospitals. Ideally, the consortium would prefer one large hospital serving the entire district. This would result in a hospital sufficiently large enough to provide excellent special treatment centres across a wide range of specialities. This is extremely important in terms of attracting top class specialists. It would also be the preferred option in terms of return on investment and this is important. There is strong pressure within the partners to go for this option. Any move away from this will result in a lowering of the return on investment and you would have to strongly justify such a decision.
However, transport links across the district are not good with very poor bus services particularly from and to the east side of the district. It is very difficult to see exactly where the ideal location is for a single hospital though a strategy that sought multiple hospitals in the district would be much clearer.
Each of the proposed sites has benefits and drawbacks. The three potential sites are:
Potential Site A: Old Colliery
This is a disused mining site situated in the east of the district. In a recent report on social exclusion within the district the “Old Colliery” area was identified as made up of “Wards with acute and concentrated deprivation”. The clear disadvantage of this site is that it requires some considerable amount of investment to clean it up and sterilise it before it can be built upon and this is extremely likely to impact upon the eventual return on investment. Work is currently taking place to landscape the site and to provide a basic infrastructure but there might be problems and costs not yet foreseen – there are no records and it is officially denied but verbal evidence suggests that part of the site was used at one time as a hazardous chemical dump.
Transport links are extremely poor – particularly for those travelling from the west of the district. Other problems include the extremely meagre supply of good quality housing and facilities though there is potential to build new housing. One of the key problems is the perception of the “Old Colliery” district.
Since the closure of the “traditional” industries of coal, steel, glass and chemicals this entire part of the district has become very poor with a low quality environment. An example here is the scarcity of green spaces – a history of coal mining and chemical production has left its mark visually with a large amount of scarred land.
It would be extremely difficult to persuade professional staff to move here and almost impossible to find suitable accommodation for them.
On the positive side there is a large availability of unskilled and semi-skilled workers available to fill lower grade jobs – such as cleaners and porters. Unemployment is well above the national average in this eastern part of the district.
Work could begin on the site almost immediately and there would be few local objections. In fact, the local population plus key politicians would welcome the job opportunities.
Potential Site B: Dams Nature Reserve
This site would appear to have everything. It is close to a railway station, bus services are fairly good from the middle and west of the district and it is a popular area for professional staff to live. There are few problems other than draining the land (a small water feature would be an attractive low cost possibility). It is a prestige site in what is a very desirable part of the district. The large number of golf sites and good green space within walking distance further add to the attractiveness.
The only problem is that the nature reserve itself has been declared a Site of Special Scientific Interest (SSSI) due to the presence of Great Crested Newts in some of the ponds and wetlands. There are also some extremely rare water insects present. Currently the county Wildlife Trust is surveying the area with help from an English Nature grant.
The wildlife protection groups have heard a rumour that this site is being considered and there is talk of forming a protest group. A group of “wildlife activists” are rumoured to be preparing to take up residence in the trees on the site in order to protect them. The local newspaper, “The Mid Southern Clarion” has traditionally been very conservative but is taking quite a strong interest in the fate of this wildlife site. Choice of this site will undoubtedly result in delays & bad publicity due to strong opposition from environmental and wildlife groups and a strategy to deal with this would need to be considered.
One representative of a bank involved in the consortium and an ardent supporter of this site has put forward the idea, in confidence, that for a small sum it might be possible to “rid ourselves of the Newts and other beetles from hell”. This is certainly an attractive site and must not be ruled out. If the problems can be resolved relatively quickly and without too much cost building a hospital here should result in a very good return on capital. It has another benefit in that it is close to a number of private health facilities which would make it possible for the private provision to take link in very nicely with the NHS hospital.
The site is owned by the local authority and, given an acceptable resolution of the Newt problem, it would not be adverse to selling the land.
Given that this is one of the more prosperous parts of the district there might be problems recruiting workers for the less skilled jobs but this would be the ideal site for professional workers. This would also be a good choice if you wished to advance your career for there are some very powerful voices in the consortium very much in favour of this option. If the opposition to the nature reserve can be sterilised then this option, thought not necessarily the best option for health care in the district, is potentially the most profitable one.
Potential Site C: Derelict Woolen Mill Complex
This site enjoys good motorway access and is a short bus ride from the middle of Woolen Town. Once an extremely deprived part of the district; of late Woolen Town has become something of a desirable place to live. This is partly due to the availability of large old stone built mills. Abandoned in the 1970s and 80s, lately many of these have been converted into apartments. This has resulted in something of a regeneration of the town with large numbers of young workers fleeing to it from the expensive accommodation in Alderman Town.
This would be a mid cost site, however, general access to the site is a problem due to its position in a busy, built up, residential area. There would be little opportunity to build reasonably sized car parks. New transport links would also be necessary and these might take up to a quarter of any budget.
Some Characteristics of the Mid Southern District
The District covers 850 square kilometres with a population of 625,400 as at March 2002. Interspersed amongst green belt are approximately 40 towns and villages. The main population centres are Alderman Town, closely followed by Woolen Town, Chemical Town, Coal Town, Glass Town and Steel Town. Hospital provision is fairly self-contained within the district for there are no hospitals outside of this district close enough to be useful.
The district economy is not competitive in a national context. The district covered by the Mid Southern district comes bottom or next-to-bottom on virtually all the government’s Regional Competitiveness Indicators. There are few growth sectors within the district. The medium term forecast is for jobless growth. The exception to this is the Alderman Town where the local economy has taken something of an upturn in recent years. Woolen Town, although it contains pockets of extreme disadvantage, has demonstrated growth in jobs recently but this might be fragile and any downturn in the economy might create problems.
Some neighbourhoods in the East such as Steel Town, Chemical Town, Coal Town and parts of Glass Town, face serious problems of economic decline and a change in function. New jobs bypass these older urban areas.
The real economic problems are in the east of the district – the old coal mining and chemical areas – where unemployment remains a substantial problem. Coal Town, in particularly, is characterised by a low wage, low skill economy. Coal Town and Chemical Town have the highest proportion of low skilled workers and the lowest proportion of highly skilled workers in the Mid Southern district. Car ownership is extremely low in this eastern side of the district when compared both to other parts of the district and national figures.
In terms of population change, there has been a relative increase in population in the west of the district as families with children locate in those areas most accessible to new employment opportunities. At the same time the east of the District is suffering a relative fall in population with the elderly representing an ever growing proportion of the population.
This uneven distribution is reflected in patterns of population change across the different areas. The West and Alderman Town have seen population rises above the district wide average and strong increases in the numbers of children over 4 and middle-aged householders (35-55). In contrast, parts of the East are experiencing a relative loss of population and a decline in working age population (25-64). One result of these changes is a larger than expected growth in the over 65 age group in this eastern section
Whilst deprivation is widespread, a fifth of the District’s population live in areas that have the most complex and inter-related issues of social exclusion and there is a significant clustering of these areas within the District. Three major concentrations of deprivation are apparent. Alderman Town East with the highest proportion of deprived areas and Coal Town South.
A modest wage, modest skill economy appears to prevail in the district as a whole. For example, few local companies (58% compared to 63% regionally) invest significantly in information and communication technology (ICT) – some 20 per cent of the local workforce have never used a PC; a figure that rises to 45 per cent in the most disadvantaged wards.
The supply and demand side of the local labour market is problematic. Woolen Town is characterised by a relatively poorly qualified workforce. It has (by some margin) the highest proportion (28%) of workers in the district with no formal skills and the lowest proportion (20.7%) of highly skilled (i.e.NVQ Level 4 and above) workers. This is partly due to the lack of presence of growth sectors that demand high skills.
Educational attainment also lags behind national averages. The proportion of pupils achieving five or more Grades A to C at GCSE level in 2007 in Chemical Town was 45 per cent – well below the national average. However, the rate of improvement locally between 1998 and 2007 (6.1%) was greater than that nationally (4.1%), so the gap is narrowing slightly and slowly.
There is a significant cluster of local government wards with relatively high proportions of the population dependent on means tested benefits. Woolen Town West is particularly disadvantaged in this respect as is the whole of Coal Town.
Health deprivation is a major issue across the district and is reflected in the relative rankings on the Index of Multiple Deprivation (IMD). More than half the district’s local government wards are in the top 10 per cent of ‘health deprived’ wards according to the IMD (DETR, 2000)., whilst the East District has 6 out of the 10 most ‘health deprived’ wards in the District.
Health deprivation measured by admissions to hospital for cardiovascular disease and cancers is widespread across the district. Hospital admissions for these two illnesses are sometimes used as proxies for deprivation. Cardiovascular related illnesses are heavily cited in the literature as particularly correlated with deprivation. Certain forms of cancer are also linked to poverty and dietary factors related to poverty. The incidence of both of these is particularly marked in the western parts of Woolen Town, some parts of Alderman Town and Steel Town.
The incidence of low birth weight in babies (a common proxy for deprivation) is also widespread. The causes however, are complex, but where there is multiple deprivation and low birth weight the impact of poverty is much greater. Low birth weight babies tend to have greater respiratory and health problems in later life and as the Department of Environment, Transport and the Regions (DTRL) note “it is, therefore, a measure not only of immediate health risk but also of future health problems that may not present until later in life” (DTLR, 2000, p.26). Monitoring the distribution of low birth weight in deprived areas is an important instrument in tackling poverty.
Public health issues are of highest concern in the West Woolen Town and East Coal Town areas. The ranking of these two wards on the national index of health deprivation places them in the most deprived 2 per cent of ward nationally.
The rate of admissions to hospital for cancer per thousand population has fluctuated across the district at between 29 and 34 per thousand between 1998 and 2007. As with low birth weight the wards with the rates of admission for cancer above the district average have fluctuated accordingly.
A different pattern of morbidity emerges when looking at admissions to hospital for cardiovascular disease over the same period. The rate of admission to hospital for cardiovascular disease has remained around 25 per thousand in the general population. In 2006/07 the rate of admission ranged from 19 per thousand in Alderman Town to just over 30 per thousand in Woolen Town West.
The wards consistently above the district average for cardiovascular disease are a different set of wards from those appearing on the list of wards with consistently high rates of admission for cancers. The distribution at ward level show a more marked concentration of admissions for cardiovascular disease in areas traditionally viewed as being the most deprived parts of the district.
A more direct indicator of health outcomes and deprivation is mortality (death). Research has shown that when standardised mortality rates are used as a proxy for deprivation health inequalities in Britain have widened over the past 20 years. The mortality rates for unskilled workers were almost three times those of professional and managerial groups.
Index of Multiple Deprivation (IMD)
DETR (2000) Measuring Multiple Deprivation at Small Area Level: The Indices of Deprivation 2000, Department of Environment, Transport and the Regions: London.
SOME FURTHER IDENTIFIED ISSUES
If your consortium were to win the contract, shareholders in your member companies would expect a real return of 15% – 20% a year on their investment. This could be increased even further through refinancing the deal. Refinancing occurs when consortia borrow money to finance the building costs once the risky phase of construction is complete.
There are a number of additional issues that need to be addressed during the decision making process:
1. A recent opinion poll conducted in the district showed that 81% of citizens are vehemently opposed to a PFI financed hospital. A rumour is already circulating the local area of “a proposed PFI bid” and this has become a hot issue in the letter pages of local newspapers with most contributions strongly opposed. Local trade unions have formed a “joint action group” with other community bodies. A series of high profile protests are planned in the near future.
2. The district includes two parliamentary constituencies within its borders. The MP for the eastern part is Jerry Bourne, a long serving party MP who is ready for retirement and focuses mainly on local issues. However, to the west is Hilary Thompson: the boundaries of her Parliamentary constituency will be altered before the next election making the seat extremely marginal. Since the announcement of this boundary change Hilary Thompson has become ready to find any issue that can raise her profile with the electors. Recently she has made the siting of the hospital within the Western part of the district one of her chief campaigns. Be prepared for trouble if the decision does not go her way. She is extremely forceful and knows how to use the media.
3. A low wage, low skill economy seems to prevail in this district. Local enterprises are reluctant to invest in higher value added activities that would raise the skills base of the District. Consequently, the district has the highest proportion of low skilled workers and the lowest proportion of highly skilled workers in the county. Educational standards are below the national average but the gap is narrowing. As a result of this there is a growing feeling that the provision of a new hospital could be an opportunity to raise the skill level of the general population. A recent conference on economic regeneration spent some time discussing the possible benefits to the local economy of locating the hospital in the most deprived areas.
4. The Pakistani and Bangladeshi communities are rather more concentrated and, by implication, segregated from the majority of the population. These groups inhabit about 16% of the population with a strong focus on the wards surrounding the old mill. In these areas, Pakistani and Bangladeshi groups constitute up to 30 per cent of the population.
5. Health deprivation is a major issue across the district and is reflected in the relative rankings on the national scale. Mid Southern has 8 out of the 10 most ‘health deprived’ wards in the county. More than half of the district’s wards are within the top decile on the national index or are very close to the top 10 per cent nationally
6. Education deprivation is the single biggest poverty issue within Mid Southern after health deprivation. Seven wards are in the top 10 per cent nationally on this measure with “Old Colliery” once again figuring at the bottom.
7. Measuring the incidence of take-up of means tested benefits and low income is an obvious first step in measuring deprivation across the district. Estimates are that more than 1 in 5 households claim Council tax Benefit in the “Old Colliery” and “Old Mill” areas.
Measures of Poor health
The following indicators are assembled at small area level: low birth weight, admissions to hospital for cancers and cardiovascular disease and standardised mortality rates.
Low birth weight
Low birth weight is one of the indicators used at ward level as a component of the health domain and is often correlated with poverty. The causes however, are complex, but where there is multiple deprivation and low birth weight the impact of poverty is much greater. Low birth weight babies tend to have greater respiratory and health problems in later life, “it is, therefore, a measure not only of immediate health risk but also of future health problems that may not present until later in life” Monitoring the distribution of low birth weight in deprived areas is an important instrument in tackling poverty.
At ward level the distribution of low birth weight babies per thousand births fluctuates yearly. In 2007/08 for example, 8 wards had rates of low birth weight above the district average; in order these were Chemical Town, Coal Town and Woollen Mill. The remaining wards were all below the district average of 71 per thousand births.
Hospital admissions for two illnesses have been used in this research as proxies for deprivation. These are admissions to hospital for cardiovascular disease (heart or coronary related diseases) and admission to hospital for all cancers. Cardiovascular related illnesses are heavily cited in the literature as correlated with deprivation. Certain forms of cancer are also linked to poverty and dietary factors related to poverty.
The rate of admissions to hospital for cancer per thousand population has fluctuated across the district at between 29 and 34 per thousand between 2002 and 2008. As with low birth weight the wards with the rates of admission for cancer above the district average have fluctuated accordingly. One interesting development is that the number of wards with rates of admission above the district average has progressively declined, however this has been
accompanied by a slight spatial concentration at ward level. In 2002 for example, 11 wards were above the district average whilst this had dropped to 9 in 2005 and again to 8 in 2008.
However, 7 wards remained above the district average in each of the years of data: in order these were Chemical Town, Coal Town and Woollen Mill.
A different pattern of morbidity emerges when looking at admissions to hospital for cardiovascular disease over the same period. The rate of admission to hospital for cardiovascular disease has remained around 25 per thousand in the general population. In 2000/01 the rate of admission ranged from 19 per thousand in “Dams Nature Reserve” to just over 30 per thousand in Woollen Mill. Around 10 or 11 wards have rated above the average on admissions to hospital for this disease over a recent three year period. However, a core of 8 wards have rates consistently above the district wide average. These are: Woollen Mill, Chemical Town, and Coal Town.
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