Peter E. Druker (1967), lists five elements of decision process in his book, The effective Executive:1) Clear realization that the problem is generic and can be solved only through a decisi

Analysis: The selection of the president is one of the most important decisions a board of directors makes. Not only does a president have an enormous impact on the fortunes of a company, but the very process by which the executive is picked influences the way employees, investors, and other constituencies view the company and its leadership. In short this decision will effect the whole organization.

Moody, P. (1983). Decision Making. New York: McGraw-Hill Book Company.

Case: At 60, Mr. H L Zutshi, the company president, decided he would retire before the mandatory retirement age of 65. He did not reveal his decision to anyone until he reached 62, and at this time he confided to his best friend and the most powerful board member that he would retire imminently. Mr. Zutshi proposed that Mr.S K Kherr, Vice President, Administration, a very able and experienced executive, succeed him as president. Mr. Zutshi's friend vehemently opposed Kherr's candidacy, and forcefully argued that S N Mathur, vice president of manufacturing, was the best qualified to be the new president. This case presents a situation where the decision-making process has completely failed.

It is critical to the whole organization that the president makes sure it is the smart choice. So Mr.Zutshi should put his decision to the test:

In the Indian way of decision-making, the single most important element in solving such problems is defining the question. Because the Indian system is very time consuming and involves many participants (higher level managers) from various functions within the organization, the Indian system is suited to big decisions. A change is president is one of the most crucial events in the life of a company, and it is an event in which the board of directors plays a central decision - making role. Because the new president must be chosen soon, it was already too late to make an effective decision. The decision process will inevitably be marred by politics and compromises, resulting in a weaker organization and lower morale.

ime for the board to select new successor.

It is important that the board make sure that the succession process begins about four or five years before the president is expected to step down. This time frame gives room for maneuver if necessary, and that is important. The board has to identify candidates who could be moved to the top of the organization. If there is only one real candidate to succeed the president, the president needs to go out and bring new people into the top ranks of the company - to get the pool of successors up to three or four strong candidates. Getting these new people established and reviewing their performance takes time, so the board needs to insist that the process start early. This requires great communication between board members, which does not seems to exist in this case. Often times the effective decision-making process in undermined because the board is passive, and board members are friends with the president. Mr.Zutshi, did not reveal his decision until he was 62, leaving almost no t!

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