Decision Making Processes Chapter 12

Good Terms to Know Organizational Decision-making Organizational Decision-making Problem identification Problem identification Problem solution Problem solution Programmed decisions Programmed decisions Nonprogrammed decisions Nonprogrammed decisions

Individual Decision Making Two Approaches Two Approaches Rational Approach Rational Approach When do we use it? When do we use it?

Rational Approach

Individual Decision Making Bounded Rationality Perspective Bounded Rationality Perspective When do we use it? When do we use it? Intuitive Decision-making Intuitive Decision-making Nonprogrammed= Nonprogrammed= Programmed= Programmed=

Organizational Decision Making What is it? What is it? Four models Four models Management Science Approach Management Science Approach Carnegie Model Carnegie Model Incremental Decision Making Process Incremental Decision Making Process Garbage Can Model Garbage Can Model

Management Science Approach Similar to rational individual approach Similar to rational individual approach Structured Structured Technology Technology

Carnegie Model Coalitions Coalitions Why use coalitions? Why use coalitions? Implications Implications Satisfication Satisfication Short-term outlook Short-term outlook Discussion and bargaining Discussion and bargaining Problem identification and implementation strategies Problem identification and implementation strategies

Incremental Decision Process Model Focuses on sequence of events from problem discovery to solution Focuses on sequence of events from problem discovery to solution

Learning Organizations What are they? What are they? How are they different from other organizations? How are they different from other organizations? Two Approaches to Decision Making Two Approaches to Decision Making Combine Incremental Process & Carnegie Models Combine Incremental Process & Carnegie Models Garbage Can Model Garbage Can Model

Garbage Can Model Extremely organic environments Extremely organic environments Three Causes Three Causes Problematic preferences Problematic preferences Unclear, poorly understood technology Unclear, poorly understood technology Turnover Turnover

Garbage Can Model Stream of Events Stream of Events Problems Problems Potential solutions Potential solutions Participants Participants Choice opportunities Choice opportunities Consequences Consequences

Garbage Can Model

Contingency Decision-Making Two dimensions Two dimensions Problem consensus Problem consensus Technical knowledge about solutions Technical knowledge about solutions

Special Decision Circumstances High Velocity Environments High Velocity Environments Characteristics Characteristics How to overcome them How to overcome them Decision Making & Learning Decision Making & Learning Escalating Commitment Escalating Commitment Why does it happen? Why does it happen?