Organizational Decision Making 35 Organizational Decision Making

Organizational Decision Making Not on individual basis Problem identification and solution involves many departments, multiple view points, and even other organizations Many factors affect organizational decision making, such as; internal structure, stability or instability of external environment

Organizational Decision Making Four types of organizational decision making processes: Management science approach Carnegie model Incremental decision process model Garbage can model

Management Science Approach Analogous to rational decision making at individual level Management science came into being during World War II (maths, Physics, OR concepts applied to help administer and manage military issues) Example of torpedoes sinking a vessel – how many different variables like speed, time, distance, wind speed, shell size, curvatures etc. will be considered

Management Science Approach Analysts then jumped in to give a head-start to management sciences, radars replaced humans as targeting This approach then diffused into other institutions and corporations and business schools where techniques were studied and elaborated

Management Science Approach Some examples where management science approach has solved organizational problems: Finding right spot for an office/factory Test marketing a new product Drilling for oil Distribution of goods and now telecom services Scheduling of airline employees, ambulance technicians, telephone operators,

Advantages Can accurately and quickly solve complex problems involving many variables Computer and software technology is further augmenting the use of management science approach

Failures Credit rating scoring by banks on the expense of human judgment Quantitative data are not rich and do not convey tacit knowledge It is the man behind the gun