Analysis of the Current Decision
In this case, relocation and expansion of the Agama Port is the main decision issue. Redevelopment of the old port facility, however, is an overlapping concern. It is apparent that goal of expansion of the operational capability of the Port influenced the occurrence of succeeding goals such as relocation to near Saudi Arabia and redevelopment of old Jordan facility. Consistency is showed by the fact that the old facility had received an increasing level of investments and trades which are not in line with its core objective as urban tourism area. To address environmental constraint such as lack of capacity and conflict of identity, expansion and relocation of the facility is proposed. Based on experience, however, the decision group also redesigns the development plan to the Jordan facility by formally announcing its waterfront structure and mainly real state investment offerings.
Local rationality is required to determine the individual importance and relationship of three overlapping decision issues that the group addressed. Although their effort may result to maximization of total value, those three areas can be characterized with inconsistency (i.e. outcome, quality, resources invested). For example, accepting the concepts being proposed by political arguments about organizations, shared decision-making processes will link the issues into coherent topic to deal with. For example, since Agama Special Economic Zone is originally aimed for the people in geographical boundaries of Jordan, priority of resource allocation would be reserved for its purpose. Alternatively, bargaining can be executed wherein the substantial investment in Saudi Arabia relocation (i.e. Billion) will provide levy for the interest of Jordan port in the future or as soon as it results to profit.
Pops are also tapped because organizations can only attend to one goal at a time especially that these issues are crucial to the objectives of the group and the firm. With private companies being involved in delivery of results, the risks are automatically minimized and expediting the finish date can be claimed. However, it is apparent that private companies are not involved in the planning stage (i.e. figuring-out the budget and time-frame) and mainly included for implementation or financing means. This behavior can be explained by the need of control by Agama that plans are concretized by insiders. As they are already arranged, the project can be maximized by simply waiting for private companies to deviate from the planning convention (i.e. provide lower bids in case of build/ material contract). In addition, private companies may likely come from international market where differences can create bottlenecks in planning.
Relocating in Saudi ports is rationalized by the fact that its seas have deeper seas to accommodate bigger ships. With reference to the new site’s geographical superiority compared to the Jordan port, these combined natural resources can result to address Agama’s aim to exploit increasing trade volume and zone-based investments. These analogies are based on adaptation in search rules such as Jordan ports may have shallower waters and limited land size. Further, it is mentioned that the new port entices numerous investors as well as rivalries that can aid in efficiency goals of Agama. In the contrary, since the firm is new to the operating environment of Saudi Arabia, adaptation to attention rules will necessitate updating of knowledge and impression about the new port over time. Perhaps, the social environment does not allow significant number of investors as manufacturing firms due to negative externalities.
Although the transfer to new port is basically motivated by volume-related issues, increasing the aesthetic value of the Jordan port and lucrative opportunities in Saudi Arabia, these clear aspirations do not prevent the firm to adopt an assurance strategy using progressive expansion. This can be explained by adaptation of goals in which it will be evaluated based on past period experiences. For example, the out-of-control situation in old port showed that one-time investment without adapting to continuous changes in the environment can pose threats to stability and growth. Organizational learning is in action where it considers specific adaptations (i.e. search rules, attention rules and goals). Knowledge is power and the decision group is aware that operating in a new environment with substantial investment at stake requires prudence.
Decision-Making Best Practices
Agama has two main choices on how to address the five basic stages of a decision as initiator of action; rational or irrational (i.e. based on reality). The choice can be polished by considering various factors in the expansion, relocation and redevelopment decision issues. In the current case, the search for alternative solution is largely based on garbage can model because of decision-making characteristics of the Agama group wherein solutions existed just before the problem and means-ends are uncoupled. Expansion is an opportunity wherein lost identity is a weakness and also relocation is a means where the end is both in favor of increase in volume capacity and increase in aesthetic appeal. To increase commitment, overlapping goals and main problem must be identified and known to project participants.
In estimating consequences, irrational model is used by Agama wherein positive consequences of the relocation are disclosed (i.e. deep waters) with minimal regards to negative consequences (i.e. costly venture) or perhaps minimizing the impression of a negative consequence (i.e. saying intense rivalry will increase efficiency). However, using this method, the firm is exposing the project to risk of ignorance or indifference to participants. This can bring down their interest to symptoms that may lead to negative consequence that is earlier hindered and even transformed to positive one. Aggravatingly, it is in accordance to the garbage can model of housing uncertainty to the operating environment. Although commitment is assured, it is heavily trapped on the fence of ignorance of negative consequences. As alternative, rational model should be used when negative and positive consequences are explained to participants.
Irrational model is also reflected in the appraising worthy alternatives. The decision group does not identify the problem at hand and therefore no primary objective is formed. For example, the objective to relocate is confusedly related to the root cause of such undertaking (i.e. whether to accommodate increasing volumes or minimize the identity crisis in Jordan port). In effect, consequences (i.e. relocation) invented such objectives to expand Saudi Arabia, leave the old area and redevelop it. This method made the expansion objective to support the supposedly alternative of leaving the old area or redeveloping it. With reference to rational view, the decision group skipped the step-by-step process of evaluating alternatives due to inability to relate them to certain criteria (e.g. resources needed, time constraint, quality target). To improve the scenario, coherent view should be observed while chaotic view (i.e. as in the current case should be avoided).
The spontaneous approach of Agama showed its consistency with irrational model in choosing an alternative. The specific action is dedicated to mitigate the specific perhaps rare problem in the old port and having double-edged benefit for undertaking a solution. This situation is partly explained in some parts of rational model particularly in processes involved in choosing. Sporadic processes are complete reverse of fluid processes where there is low quality of information, there are good and bad points and complex sources of pertinent data. However, it is to note that the project is under the control of an agency highly supported by the government. Therefore, it the resources and needed back-up support and there is no need to unnecessarily short-cut processes to arrive a decision to choose. As a result, due to substantial investment required to the project and its key role in the economy of Jordan and the region, choosing should be evaluated more extensively.
Lastly, on the aspect of making rational use of irrationality, the decision group is ultimately within the rule of applying irrationality such as in the cases of requiring commitment and motivation to participants. This is the reason why all of the stages in decision for initiating action adopted irrational model of resolving issues. This is because the project is a long-run engagement by the agency of Jordan (i.e. perhaps by its government) in cooperation of other domestic and foreign firms and regional governments. The relocation environment in Saudi Arabia as well as impression of redeveloping the old port which in the past are designed in traditional manner (i.e. according to local culture and tastes) is a very complex issue where numerous stakeholder and substantial investment are involved. As a result, the decision group initially settled the budget ceiling to control the ambiguous situation and unintended mixed the goals and consequences.
In this reason, irrational model is the most appropriate method to handle the complex problem. Rational model may consume too much time in the planning stage that can only aggravate the problems of under-capacity and identity conflict. As recommendation, the decision group should assure close coordination and partnership to the legal, business and political environments of Saudi Arabia and should not isolated consider that the only motivation of relocation is the deep waters, wide land space and efficiency. These are rather positive side of the strategy and inability to instill negative aspects can affect the risk position of the project. When the environment is understood, supporting strategies to make the project run smooth and expedite completion can be tapped. For example, anxieties of the firm about expatriation of assets or terrorism can be minimized by identifying their probability of occurrence to the level of insurance scope to be obtained.
Potential Problem with Irrational Model
One problem is that it may not address issues containing complex prepositions. For example, financial appraisal is required to weigh the financial benefit and cost of establishing modern port. With lack of expertise and historical data at hand, the quality of analysis required to select financially-viable undertakings is undermined. The second problem is about the long-term health of the project. Since irrational models consider short-term issues, it does not have the futuristic/ visionary stake with regards to the project. Commitment and motivation is identified as a necessity in the short-run operations primarily due to the workings needed in entering a whole new operating environment. However, long-term transactions may also require commitment and motivation such as the ability of the project to sustain and perhaps exceed the conventions and policies demanded by societal and political actors in the operating environment.
Evaluation of Characteristics of Private Companies
In the case of Pops, Agama needs the aid of private companies for ease and less risky investment and operations. One private firm that is a partner is Icon that has the responsibility to aid the redevelopment of the old port. Since the objective of this specific engagement is to increase the tourism opportunities in the area, Icon should demonstrate the compatible materials, processes and designs in relation to the cultural and political preferences of the local people. The detachment of global similarity of the motif is crucial because of the historical affluence of Jordan especially in religious and evolutional matters. Other aspiring companies must possess strength in one of key areas in value chain. Logistics is important in efficient delivery of construction and renovation materials and people to the designated location. Also, in the relocation project, logistic will play a crucial role in carefully transferring already-built plants and equipments with minimal damage or loss of value prior to reaching the new location.
SWOT Analysis
Some of the strengths in adopting the framework discussed above are increased in commitment and motivation across all stakeholders, efficient management/ transfer of resources and financial intervention to decision making (i.e. increased objectivity). Weaknesses can include involvement of more people in future decisions, additional costs of communication/ personnel and need to cooperate even under cultural differences. Opportunities can include more profitable venture while threats are the costly project implementation.
Credit:ivythesis.typepad.com
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