1 Decision Making and Learning

2 Elevator Dilemma Imagine that the elevator in our business school building operates very slowly. Wait times are generally over 5 minutes, and sometimes as long as 15 minutes. People pace the hallway, repeatedly pressing the call button and making bitter jokes about inefficiency. Both tenants and visitors are also complaining to building administrators. As a group, please decide how best to deal with this situation. You’ll have about ten minutes to brainstorm, select one or two ideas, and develop them into a brief proposal.

3 Decision Making in Organizations Satisficing — limited information searches to identify problems and alternative solutions Bounded rationality — a limited capacity to process information and generate solutions Organizational coalitions — solution chosen is a result of compromise, bargaining, and accommodation between coalitions

4 Garbage Can Model takes the unstructured process to the extreme organizations are as likely to start making decisions from the solution side as from the problem side

5 Decision makers may propose solutions to problems that do not exist: They create a problem that they can address with solutions that are already available. Decision making becomes like a “garbage can” in which problems, solutions, and the preferences of different individuals all mix together. Garbage Can Model

6 Organizational Learning Learning organization — an organization that purposefully designs and constructs its structure, culture, and strategy to enhance and maximize the potential for organizational learning to take place Managers need to encourage learning at four levels: individual, group, organizational, and interorganizational

7 Learning Strategies There are two principal types : Exploration — members search for and experiment with new kinds or forms of organizational activities and procedures. Exploitation — members learn ways to refine and improve existing organizational activities.

8 To Promote Organizational Learning Listen to dissenters Convert events into learning opportunities Experiment Create a learning culture

9 Two Approaches to Knowledge Management Explicit Provide high-quality, reliable, and fast information systems for access of codified reusable knowledge Tacit Channel individual expertise to provide creative advice on strategic problems Knowledge Management Strategy People-to-documents Develop an electronic document system that codifies, stores, disseminates, and allows reuse of knowledge Invest heavily in information technology, with a goal of connecting people with reusable codified knowledge Data warehousing Knowledge mapping Electronic libraries Intranets, networks Person-to-person Develop networks for linking people so that tacit knowledge can be shared Invest moderately in information technology, with a goal of facilitating conversations and the ex- change of tacit knowledge Dialogue Learning histories and storytelling Communities of practice TechnologyMechanisms Source: Based on Morten T. Hansen, Nitin Nohria, and Thomas Tierney, “What’s Your Strategy for Managing Knowledge?” Harvard Business Review, March-April 1999,