1. Decision-Making Processes

2. Organizational Decision Making
Is defined as the process of identifying and solving problems
Has two stages: problem identification and problem solution
Decisions vary in complexity continuum and are categorized as programmed (routine) or non programmed (non-routine)

3. Individual Decision Making
Rational model
Bounded Rational Perspective

4. Steps in the Rational Approach to Decision-Making (1)
IDENTIFICATION
PROBLEM
SOLUTION
Monitor
Decision
Environment
Implement
Chosen
Alternative
Define
Problem
Specify
Objectives
Diagnose
Develop
Solutions
Evaluate
Alternatives
Choose
Best 1 2 3 4 5 6 7 8

5. Case
Nilgiriside Department store has a number of drivers who operate its fleet of delivery trucks.
At the end of the day the crew are required to complete a delivery report that takes 5-10 min. each
Preparation of this report has been a frequent source of conflict between the management and the crew
The crew often fail to complete the report properly or delay completing it, which causes the supervisor to criticize or threaten them
What should be done?????

6. Individual Decision making: A Comparative Analysis
Bounded Rationality Perspective
Used when decisions are non-programmed & ill-defined
Rely more on intuition & experience rather than sequential logic or explicit reasoning
Takes short cut
Rational Approach
Involves systemic analysis of the problem, choices made & its implementation in a logical step by step manner.
Generally used in programmed decisions where decision maker has sufficient time for an orderly thoughtful process

7. Constraints and Trade-offs During Non-programmed Decision-Making
Bounded Rationality:
Limited time, information,
resources to deal with complex,
multidimensional issues
Decision/
Choice:
Search for
a high-quality
decision
alternative
Trade-off
Personal Constraints:
Desire for prestige, success;
personal decision style; and
the need to satisfy emotional
needs, cope with pressure,
maintain self-concept
Trade-off
Trade-off
Trade-off
Organizational Constraints:
Need for agreement, shared
perspective, cooperation,
support, corporate culture and
structure, ethical values
Trade-off

8. Organizational Decision Making
Management Science Approach
Carnegie Model
Incremental Decision Process Model
Garbage Can Model

9. Management Science Approach
Is the analog to rational model of individual decision making
Came in to being during WW II
Used mathematical and statistical techniques to urgent and large scale military problems eg. Missile trajectory, aiming battleship guns
Same approach diffused in to corporations and big businesses
Used in quantitative data analysis, operations research
Use in situations where variables are measurable

10. Carnegie Model
Based on bounded rationality approach to individual and organizational decision making
Organizational level decisions involved many managers and final choice was based on a coalition (alliance) among managers
Reason being organizational goals are ambiguous and operative goals are inconsistent
Managers tend to be rational but are constraint by time, resources and mental capacities. So they form coalition

11. Carnegie Model contd..
Decisions made under this model are satisficing rather than optimising problem solutions
Means that organizations accept satisfying rather than optimising solution
Managers are concerned with immediate problems and short term solutions
So they engage in problemistic search (looking around in the immediate environment for solutions)
Discussion and bargaining are especially important in problem identification stage of decision making.

12. Choice Processes in the Carnegie Model
Uncertainty
Coalition Formation
Search
Information is
limited
Managers have
many constraints
Hold joint discussion
and interpret goals
and problems
Share opinions
Establish problem
priorities
Obtain social support
for problem, solution
Conduct a simple,
local search
Use established
procedures if
appropriate
Create a solution
if needed
Conflict
Managers have
diverse goals,
opinions, values,
experience
Satisficing
Adopt the first
alternative
that is acceptable
to the coalition

13. The Incremental Decision Process Model
Places less emphasis on political and social factors and more on structured sequence of activities undertaken from the discovery of the problem to its solution
Major organization choices are usually a series of small choices that combine to produce the major decision.
Organizations move through several decision points and may hit barriers along the way called ‘decision interrupts’ which means organization has to look for alternatives.

14. The Incremental Decision Process Model
· Identification Phase: problem recognition
Recognition (becoming aware of the problem & the need to take the decision)
Diagnosis (systematic & detailed if time permits or or quick & immediate)
Development Phase: solution identification
Search (look for alternatives within the organizations repertoire of solutions)
Screen (eliminate what does not apply)
Design (if the above is not applicable design a custom made solution)

15. The Incremental Decision Process Model contd..
Selection Phase: choosing the solution
Judgment: (when final choice falls on a single decision maker & judgment is based on experience)
Analysis: (alternatives evaluated in a more systematic manner like management science techniques)
Bargaining: (happens when selection involves group of decision makers, so conflict happens, solved through coalition of carnegie model)
Authorization: (when decision is finally accepted authorization takes place)
Dynamic Factors: (refer to the feedback loops as a result of decision interrupts

16. Models for Learning Organization
Combining the Incremental process and Carnegie models
Garbage Can models

17. PROBLEM IDENTIFICATION
Learning Organization Decision Process When Problem Identification and Problem Solution Are Uncertain
PROBLEM IDENTIFICATION
PROBLEM SOLUTION
When problem identification is
uncertain, Carnegie model
applies
Political and social process is
needed
Build coalition, seek agreement,
and resolve conflict about goals
and problem priorities
When problem solution is
uncertain, Incremental process
model applies
Incremental, trial-and-error
process is needed
Solve big problems in little steps
Recycle and try again when
blocked

18. Garbage Can Model of Decision-Making
Deals with the pattern or flow of multiple decisions as opposed to how a single decision is made (as in Incremental and Carnegie models)
Are applied to organic structures operating in highly uncertain environment
Termed as organized anarchies

19. Garbage Can Model: Characterisrtics
Decision process is not seen as a sequence of steps beginning with a problem and ending with a solution
A solution may be around when there is no problem
A problem may have no solution
Garbage can is a mix of problems, potential solutions, capabilities of participants and choice opportunities

20. Garbage Can Model: consequences
Solutions may be proposed even when problems do not exist
Choices are made even without solving problems
Problems may persist without being solved
A few problems are solved

21. Illustration of Independent Streams of Events in the Garbage Can Model of Decision-Making
Problems
Solutions
Middle Management
Problems
Solutions
Choice
Opportunities
Participants
Participants
Participants
Choice Opportunities
Choice Opportunities
Department A
Solutions
Department B
Problems
Solutions
Choice
Opportunities
Participants
Choice
Opportunities
Problems
Solutions
Choice
Opportunities
Participants
Problems
Participants
Solutions
Problems
Problems
Solutions
Participants
Participants

22. Contingency Framework for Using Decision Models
Problem
Consensus
Certain
Uncertain 1 2
Certain
Individual:
Rational Approach
Computation
Organization:
Management Science
Individual:
Bargaining, Coalition
Formation
Organization:
Carnegie Model
Solution
Knowledge 3
Individual:
Judgment
Trial-and-error
Organization:
Incremental Decision
Process Model 4
Individual:
Bargaining and Judgment
Inspiration and Imitation
Learning Organization:
Carnegie and Incremental
Decision Process Models,
Evolving to Garbage Can
Uncertain