The decision-making model of Vroom and Yetton assumes the determination of the most effective leadership style, depending on the characteristics of each specific situation. Moreover, it is assumed that one leader can use several different management styles. The main difference of the presented model is that it is focused mainly on only one aspect of the leader’s behavior, which is to attract employees to participate in the decision-making process. Based on this, the leader should focus his attention on the problem to be solved and the situation that contributed to this problem’s emergence. It is also assumed that some social processes can influence the degree of employee participation in issue solving. According to this model, Masayoshi Son’s management style is the following:
How significant is the decision that is being made?
Sprint’s decision to buy T-Mobile is substantial for the entire US market, as the two firms represented are the third and fourth-largest in the US. Their consolidation will mean the emergence of a major player that can influence the country’s entire communications sector. In addition to the potential growth possible, if Masayoshi Son can competently dispose of the new asset, there are significant risks of this transaction. Although in terms of capitalization and infrastructure, Sprint and T-Mobile are paired with the market leader AT&T, their combined debt in the event of a merger will exceed $ 75 billion (Gelles & De La Merced, 2014). This may limit the company’s activities due to the lack of additional credit flow. Therefore, experts believe that both companies may find different difficulties due to the credit burden if the transaction is canceled.
How important is the support of people for the execution of the decision?
The support of employees and customers of both companies will in no way influence the decision to merge. Sprint and T-Mobile are providers of communications goods and services and have no interests or lobbies in public organizations. In the event of a merger of the two businesses, adjustments in the new company’s staffing are possible. However, they will be insignificant, which allows us to conclude that people’s support does not play a role in decision-making. Another group of people that can indirectly influence decision-making is the company’s shareholders. However, Masayoshi Son has a majority stake in Sprint to decide on the company alone. Shareholders, in this case, can only make a recommendation to the owner of fixed assets.
How competent is the leader himself to resolve this issue?
Masayoshi Son is the founder and CEO of Softbank Group, which concurrently owns a majority stake in Sprint. Analyzing the entrepreneurial and investment experience of Mr. Son, we can conclude that his professional activity is competent in matters of financial participation in technology companies. Today Softbank has a stake in hundreds of Internet companies, including E-Trade, E-Loan, Morningstar, Buy.Com, and GeoCities. Even though not every investment project brought profit to the entrepreneur, it can be concluded that strategically his transactions bring profit to his company. Accordingly, the decision to buy T-Mobile can be called deliberate and calculated, and Mr. Son is a competent person in this matter.
Is the problem well-structured?
Yes, the problem is structured and understandable. The quality of assets and the valuation of companies in the context of their EBITDA are publicly available. There is no information about hidden assets or debts. Accordingly, Sprint’s main task is to assess all data and risks and make decisions based on the information received. The evaluators and the companies’ representatives are aware of the potential problems that a consolidated firm may face.
How much can you expect other people’s support if the leader decides on his own?
Softbank owns 78% of Sprint’s shares, and Masayoshi Son is chairman and majority shareholder. Given the ownership of Sprint, it can be assumed that the shareholders will support Son’s decision because he has repeatedly entered into deals beneficial to Softbank. Given the vast customer base of both T-Mobile and Sprint, it can be concluded that the terms of service will not change at all or will undergo only minor changes, otherwise, the new combined company will suffer losses (Yao, 2014). Accordingly, one can expect the support of people who will be directly or indirectly involved in this transaction.
To what extent does the team support the overall organizational goals in general and the given decision in the context of these goals in particular?
Since 2001, Softbank, led by Masayoshi Son, has invested in tech companies around the world. The primary investment strategy is to find young and relatively small firms with excellent growth potential and invest in these assets. For more than 20 years, the company has not changed its strategy and has a reasonably considerable influence and many technology market assets. Hence, it can be concluded that the Softbank and Sprint team share similar organizational goals. This decision is a logical continuation of the increasing influence of the communications sector in the US market (De La Merced, 2014). Today, the two largest companies share more than half of the telecommunications market: AT&T and Verizon. Sprint and T-Mobile’s potential consolidation will strengthen the competitive landscape.
Is a conflict within the team likely to make a decision?
The company’s internal strategy is a private trade secret, so it is impossible to give an objectively correct answer to this question. However, it can be suggested that a conflict within the company over an upcoming transaction is unlikely. First, as stated earlier, Sprint’s decision is entirely dependent on Masayoshi Son. Other shareholders and investors cannot influence this decision. It is fair to assume that if they remain in their posts, they are satisfied with the head of the board of directors’ investment policy. Second, Masayoshi Son is Japanese in origin, and the corporate culture of Japan implies complete submission to its leader. Of course, within the framework of the board of directors’ activities, the participants in operating activities have free and own opinions. However, based on the corporate culture’s rules and ethics, it can be assumed that a conflict over this decision is unlikely. Based on the Vroom-Yetton decision model, one can conclude that Masayoshi Son’s management style is autocratic (A1). The head of the company has all the resources and the necessary information to make decisions independently without outside interference.
Members of his team, shareholders, and other directors can participate in this decision only as advisors. If the chairman of the board of directors decides to consolidate, only third parties will prevent this decision. Based on the data of experts, in addition to direct competitors of Son represented by the French company Iliad, which also place bids on the purchase of a controlling stake in T-Mobile, the Federal Communications Commission and the Justice Department may interfere with the transaction. My research recommendation for Masayoshi Son’s management style is consistent with the data obtained using the Vroom-Yetton decision model.
In my opinion, the Vroom-Yetton decision model has many positive effects on decision-making. Using this algorithm, you can choose the company’s right management style and decide on a specific deal. Leaders can use this framework to make decisions if they are not entirely sure about involving their team members. Concerning the improvement of this model, additional guiding questions could be included in the original table: “How competent are the people, how professional is the group to make this decision? Do people have the skills and aspirations to work in a team?” Answers to these questions can provide more detailed information about the level of people’s involvement in the decision-making process. Moreover, considering the need for corporate executives to receive training in this model, I would say that this scheme is created for analytical purposes, not practical ones. If leaders study this system, they might get a new perspective on the decision-making process. Nevertheless, I find the Vroom-Yetton scheme to provide a theoretical approach to business management.
Gelles, D., & De La Merced, M. J. (2014). T-Mobile and Sprint zeroing in on merger. New York Times.
Yao, D. (2014). Moody’s: Sprint/T-Mobile merger faces negative free cash flow until at least 2018. SNL Kagan Media & Communications Report.
De La Merced, M. (2014). Sprint ends its attempt to purchase T-Mobile. International New York Times.