OMEGA The Int. JI of Mgmt Sci., Vol. It, No. 4, pp. 321-328, 1983 0305-0483/83 $3.00+0.

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Printed in Great Britain. All rights reserved Copyright ~ 1983 Pergamon Press Ltd

Decision-making, Problem-solving and

Organizational Learning
DAVID DERY
Hebrew University of Jerusalem, Israel

(Received July 1982: m revised form December 1982)

Problem-solving behavior is normally depleted within a decision-making approach. The maze has been
advanced as a suitable abstract model for mo~t kinds of decision-making and pcoblem-solving activity.
Rather than relate to managers as decision-makers--as those who primarily explore mazes--my
proposal is to consider their role in maze-building. The paper discusses a number of deficiencies in
current decision-making concepts, primarily those that neglect to account for goal setting and
resetting. The paper then concludes with imp|icatioas for the notion of organizational learning.

INTRODUCTION I believe has been left out in the traditional

decision-making approach to problem-solving.
TRADITIONALLY, students of organizations The neglect of making an adequate dis-
have focused on decision-making behavior. tinction between a decision problem and a
Policy-makers and managers, in this view, are problem, between decision-making and prob-
primarily decision-makers and to the extent that lem-solving, seems to have emerged from the
one is interested in understanding or improving widely accepted view of organizational goals as
their behavior, one would normally concentrate pre-existent givens. The tendency in s y s t e m s
on decisional processes and the variables sur- analysis to believe in the objective existence of
rounding them. The realization that managers problems (and systems), has also supported the
engage in problem-solving as well has not inter- notion of pre-existent goals and values. This
fered with this approach to administrative be- notion, in turn, has influenced our conception of
havior, for 'problems' are not normally dis- problem-solving and learning behavior with the
tinguished from 'decision problems' (see effect that organizational goals are normally
[36, 39, 12, 25]). It takes a decision to solve a excluded from scrutiny and modification. In
problem and so problem-solving behavior is what follows I briefly present the view of man-
also treated within a decision-making frame- agers as maze-builders to prepare the ground for
work. the discussion of some central deficiencies in
The maze has long been advanced as a suit- current decision-making concepts. I then con-
able abstract model for most kinds of problem- clude with some implications for a theory of
solving activity. In problem-solving, as with organizational learning.
decision-making, individuals presumably en-
gage in selective trial and error search within the MAZES FROM WITHOUT AND
confinement of a maze--a set of paths, some WITHIN
subsets of which, the ~correct' paths, have re-
wards at their termini [29, 30]. But somebody Decision-making theories normally focus on
must have built the mazes that managers (qua how or why managers choose a certain course
decision-makers) are supposed to be exploring. of action, their primary concern is with ques-
'Building mazes', rather than running through tions of 'what to do'. Information support for
one, is employed here as a metaphor for what managers is hence exclusively 'decision-support'
321
322 Defy--Decision-making. Problem-solving and Organizational Learning
(see [18]); the value of information is (concep-
tually) measured along an index of decision
relevance. But the pre-decisional phase of
defining or formulating a problem remains
largely outside the scope of decision-making
schemes and information support systems.
Managers in a decision-making approach some-
how know what the problem is, what values to
serve via solution and what requirements to
satisfy while solving that problem. A problem-
defining problem-solving view, on the other
hand, is primarily concerned with questions of
'what to want' (see [42]). Deciding what ought
to exist is deciding what is the problem that
needs solving (see [3]). To better appreciate the
maze-building task one needs to relate to man-
agers from within the maze, to adopt a rat's
view of its 'manager' rather than a psychol-
ogist's view of his rat.
If we want to learn about problem-solving
behavior in animals or humans, we pose a
problem to our subjects and observe their be-
havior. We hang a bunch of bananas in a cage,
high enough so that our ape cannot reach it by
simply stretching its arms or by jumping up, but
not too high--outside the reach of our ape if it
chooses to climb on the box we put in the cage's
corner. We put a piece of cheese at one end of
the maze and a starved rat at the other. In real
life problem-solving managers may aim at a
bunch of bananas--the 'ought to be' situation--
except that there is nobody around to put in a
box or a latch--the relevant tools or facts one
may use to bridge the gap between 'what is' and
'what ought to be'. In real life problem-solving
managers have to discern the relevant aspects of
reality. Nor are they then provided with the
objective. Bananas are hanging up there, along
with other cherished values. They choose at
what to aim and what values to maintain.
A problem-solving view of managerial behav-
ior recognizes that problems do not present
themselves as such; that problems are not objec-
tive entities in their own right, that problems
require formulation (see [l l, 33, 44]). A man-
ager, in this view, does not normally face a
choice situation, but events that call for evalu-
ation and interpretation. Unlike an ape or rat in
the psychologist's laboratory, where the goal is
externally decided and isolated and the means
for achieving that goal are provided, managers
need themselves to decide on ends and means
within a set of (what is interpreted as) con-
straints and opportunities. Unlike a decision-
maker for whom goals are pre-existent entities
[22] a problem-solver is continuously engaged
with goal setting and resetting. While decision-
makers search for the correct path in a complex
maze [30], problem-solvers engage in maze-
building. The failure to relate to managers and
policy-makers as maze-builders has resulted in a
number of deficiencies in current concep-
tualizations of what it takes to solve a problem.
(1) Problems are not decision problems
The view that problems do not come with
identifying tags, that they require (explicit or
implicit) definition, has been traditionally left
out of most decision-making theories. The
decision-making literature displays great care-
lessness in its treatment of the notion of the
problem. One notable deficiency is the tendency
to equate problems with decision or choice
problems, thus equating choice-making with
solving, as if goals were given and alternatives
were given. "Every tool of management decision
that is currently a part of management science,
operation research or decision theory," writes
March, "assumes the prior existence of consis-
tent goals" [22, p. 572].
Decision-makers, very much like our ape or
rat, are believed to be facing pre-defined prob-
lems. If they know the consequences of alterna-
tive courses of action, they are said to be
engaged with decision-making under certainty.
If they do not know the consequences for sure,
only the probability of possible events that may
follow different actions, then they operate in a
risk situation. And if they know the range of
possible events but not their probability distri-
bution, they are engaged in decision-making
under uncertainty. The only difference between
certainty, risk and uncertainty has to do with
the availability of information about the likely
consequences of alternative courses of action,
not the availability of alternatives or goals. It is
true that the choice among alternative courses
of action ('selection') .is normally taken as
merely one phase in the decision-making pro-
cess; one which is preceded by, for example,
'recognition' and 'diagnosis' [28]. Yet, as Mintz-
berg et al. contend, "researchers have paid
almost no attention to diagnosis preferring in-
stead to focus on the selection routines" [28, p,
274].
 Omega. Vol. I1. No. 4
The stages that are supposedly involved in
decision-making processes have consistently
avoided the question of the nature of problems
that decision-makers aim at solving. Simon's
'intelligence' phase, for example, is "'searching
the environment for conditions calling for deci-
sions". His second phase--'design'--has to do
with "'inventing, developing and analyzing
possible courses of action" [36, p. 2]. Janis
and Mann's "step one' is 'challenge ap-
praisal'--being exposed to information about a
threat or opportunity that effectively challenges
a current course of action. Their "step two' is,
then, a survey of alternative means to deal with
the challenge [17, p. 172]. Anthony and Dear-
den's conception of the control system identifies
three components: a 'sensor'--a measuring de-
vice which detects what is happening; a 'selec-
tor'--which assesses the desirability of sensed
events; and an 'effector'--a device for altering
behavior [4, pp. 3-4]. The common feature in
these three examples is the notion that decision-
makers are expected to somehow know what
sort of alternative courses of action to look for
as soon as they sense an opportunity or that
something is wrong. Furthermore, since alterna-
tives exist only in relation to some specified
goals, decision-makers are also expected to
know what goals to aim at. So interpreted, it
appears that as soon as something wrong is
sensed the organizational eternal dictum is 'get
rid of it!'. Or the organization is expected to have
had developed an elaborate manual of goals to
account for all or most contingencies, rules and
rules for breaking the rules. What remains for
Administrative Man in this scheme is to look it
up and search for alternatives.
The 'garbage-can model of organizational
choice" [7], the 'technology of foolishness' (i.e.
rationalization, imitation, coercion, inconsis-
tency and playfulness) [22] and Weick's insis-
tence that organizations are sense-making enti-
ties [43] have challenged the notion of the
pre-existence of goals, indeed the very notion of
intelligent behavior and rationality. 'Goal-
seeking behavior' is taken literally to denote
search for goals. " H u m a n choice behavior is at
least as much a process for discovering goals as
for acting on them" [22, p. 573]. But then
rationality--"the procedure for deciding what is
correct behavior by relating consequences sys-
tematically to objectives" [22, p. 572], t h a t
thinking should precede action--becomes an
323
obstacle rather than a primary requirement. In
Cooper et al.'s interpretation, the technology of
foolishness, unlike economic rationality or
bounded rationality models, relaxes the notion
of problem-solving as the essence of decision-
making [8, p. 177].
Perhaps, being a victim of our culture, I am
not escaping the logic of my reason, as March
would like us to do so that rational imperatives
towards consistency may be suspended [22, p.
578]. But it seems to me that neither have March
and his colleagues. A technology of foolishness,
if I understand correctly, is a rational proposi-
tion. It is not advanced as a goal in itself but as
a means toward better management, or more
specifically toward goal discovery. Actions (the
ingredients of 'foolishness'--rationalization,
imitation, inconsistency and playfulness in-
cluded) are rational not necessarily by virtue of
serving pre-existent goals. Actions may be con-
sidered rational also if they serve other goals,
such as learning about new goals. March's
question is not 'which foolish things we ought
to do', but "which of the many foolish things
that we might do now will lead to attractive
value consequences?" [22, p. 576]. It appears
that what is being replaced is not rationality but
the goal to be served. Learning about new goals
and values is considered more important than
serving or learning to better serve old ones and
the technology of foolishness is in turn consid-
ered an appropriate means toward that end.
In other words, I take the technology of
foolishness as a must, not as an escape from the
emphasis on problem-solving, but due to this
emphasis, due to the need that is inherent in any
problem-solving to examine and discover goals.
No problem is solved, resolved or avoided
('flight' or "oversight' in the 'garbage-can
model') unless certain goals are reached or
maintained. If goals are not pre-existent entities,
then problem-solving is first and foremost about
discovering or constructing goals. The tradi-
tional notion of decision-making portrays an
effort that begins when goal construction is
over.
Effectiveness, efficiency, sufficiency, indeed
the common notion of rationality depict
different types of relationships between means
and ends. Ends and means are somehow given,
their nature if not their exact identity. The
introduction of retrospective sense-making, of
imitation, inconsistency and playfulness is
324 Dery--Decision-making, Problem-soh'mg and Organizational Learning

foreima to this notion of rationality but not to Organizational activities, it is commonly held,
rationality. The tendency in the 'technology of are first treated as non-programmed and, as
foolishness" to divorce itself from problem- experience or knowledge accumulate, or-
solving and rationality is perhaps under- ganizations develop routine procedures for
standable in the light of the "over-rationalistic' handling them. Management, unlike control, is
connotations that come with problem-solving, experimental. It aims at learning--acquiring
where problem-solving and learning are consid- that body of knowledge that will allow for
ered mutually exclusive [27], but not in the light (routine) control [20], The statistical type I error
of what it takes to actually solve a problem. is thus interpreted as the attempt to 'manage'
problems that should be 'controlled'. And type
(2) Structured decision problems are structured II errors stand for 'premature programming', or
because we choose to treat them as such the attempt to 'control' a problem that should
A second deficiency in current decision- be 'managed' [20, 16]. Again, whether a certain
making theories has to do with the notion of problem should be managed or controlled
ill-structured, or non-programmed decisions. would, in this view, depend on our knowledge.
The notion of "programmed decisions' as dis- This would seem true, however, only to the
tinguished from 'non-programmed' has become extent that we keep goals constant. The assump-
an integral part of our research, consulting and tion that knowledge is the only driving force
everyday managerial talk. Structured or pro- behind routinization, behind the transformation
grammed decision problems have definite pro- of the non-programmed into programmed, pre-
cedures for handling them, ill-structured do not sumes that goals, unlike technique, do not
[36, 28, 25]. That managers treat certain prob- change over time or by practice. For if we allow
lems by pre-developed procedures while for for goal transformation, e.g. if we become more
other problems they develop custom-tailored ambitious, it would make sense to de-routinize,
treatments is obvious. It is also obvious that, or to unlearn (see [14]). All problems of all types
given their limited resources and attention ca- and attributes are, or were, subject to definition
pacity, they should do so. There is no sense in (explicit or implicit). Thus reference to 'struc-
re-inventing the wheel time and again. But a tured decision problems' is a reference to situ-
wheel is a wheel. It can serve certain purposes, ations that have been encountered in the past in
but not others. A definite procedure to handle a manner that is then considered suitable for
a given class of problems is by definition a future treatment of similar situations, not a
closed set of ends and means. Alternative means reference to a situation that is objectively struc-
that are not embraced in a given definite pro- tured. It follows that 'ill-structured decision
cedure are excluded from consideration. Nor problems may well denote a situation which has
would additional or different ends be aimed at been encountered in the past and for which a
through definite procedures. What is less obvi- definite procedure has been developed; alas,
ous in the distinction between programmed and given the (new) goals we now want to pursue,
non-programmed decisions is that the choice that procedure is considered inadequate.
(many times arrived at through definite pro- Let me approach this point from a different
cedures) to handle a certain problem through perspective. If problems are not objective enti-
given standard operating procedures is inher- ties in their own right, then attributes or prop-
ently a choice of goals to aim at and a class of erties of problems cannot be said to have a
means to consider. Supposedly the notion of separate objective existence. Problems do not
ill-structuredness denotes those situations present themselves as structured or ill-
decision-makers face where problems do not structured, nor do they come as decision-
come pre-defined. But unfortunately the problems, complex or simple. Facts do not
dividing line between programmed and non- organize themselves just by being observed. The
programmed, well-structured and ill-structured situations which decision-makers attend to are
decisions has nothing to do with whether or not there, but 'the facts of the situation', that is the
goals are treated as given. Rather, this dis- relevant facts, do not present themselves as
tinction goes along the line of the relative such. To state the facts or describe the situation
newness of, or experience in treating, a given is to interpret not to copy it (see [13]). The
decision-problem, interpretation of a situation as a 'choice prob-
 Omega, Vol. II, No. 4,
lem" must be preceded by a choice of goals to
aim at, and that of alternative courses of action;
only then can the task be one of choosing the
most attractive alternative.
(3) Comprehensiveness rests on value judgment
that contradicts the call for comprehensive inter-
t'ention
This point leads me to a third deficiency in
decision-making theories, essentially those ad-
vocating a holistic, comprehensive approach.
The tendency in systems analysis has been to
believe in the reality of an objectively defined
problem (or system), as Eden and Sims put it,
which is assumed to be self-evident to all intel-
ligent people [11, p. 120]. An elephant is an
elephant; only a blind man would confuse it
with a wall, rope or hose (see [6]). "Simple, my
dear", explains the instructor in a nicely put
Socratic dialogue on systems, "[by calling three
rocks on the ground a triangle] you are con-
fusing a reality with a set of perceptions or
mental structuring imposed on reality. The tri-
angle formed by the three rocks is a function of
your mental processes, not the rocks them-
s e l v e s . . . T h e truth is you created the
configuration in your mind. It is not a function
of reality" [3t, p. 279]. He who sees the blind
man touch the elephant sees the elephant. The
problem (or system) is there, the 'real' problem
that is to say, and the systems analyst's task is
to uncover its 'true' nature, its 'true' inter-
relatedness with other problems. "In dealing
with a problematic situation," writes Ackoff, "a
decision maker must develop a concept--a rep-
resentation or a model--of it. He attempts to
solve the problem as he conceives it. Thus if his
conception is wrong, the solution to the prob-
lem as conceived may not solve the problem as
it exists" ([1, p. 13] my italics).
Systems analysis thus suggests that given the
complexity of real life problems, the traditional
piecemeal approach need give way to a system
view of the world. The system's orientation,
write Ackoff and Rivett, " . . . deliberately ex-
pands and complicates the statements and prob-
lems until all the significantly interacting com-
ponents are contained within it" [2, p. 10]. Goal
exploration, the importance of choosing the
'right' objectives, has been stressed in most
formulations of systems analysis [32, 35, 15] as
an integral part of the systematic-comprehen-
sive approach.
325
Opponents of comprehensiveness have
mainly argued that such an approach is more
than our state of the art or mental capacity can
afford, that it burdens an already difficult task
of calculation, and that it is costly in both
monetary and political terms. Comprehen-
siveness, in other words, is not usually opposed
in principle, only as a practical guide for action.
My argument, on the other hand, will be that
the holistic approach rests on a contradiction
between the notion of complexity, where the call
for comprehensiveness originates, and the em-
phasis on examination of goals.
If problems are not objective entities, com-
plexity (as the adjective in "complex problems')
cannot be said to exist "out there'. Complexity
is not a function of objective attributes of reality
but a product (if at all) of one's formulation of
problems. More specifically, the degree of com-
plexity of a problem is primarily a function of
those goals we choose to pursue via solution (see
[37, p. 16]). To the extent that our goals do not
conflict with other goals we may hold (and the
available means for pursuing these goals do not
violate other values), then the problem at hand
can be said to be simple. If, on the other hand,
the goals we choose to pursue do conflict with
other goals (e.g. fight inflation and reduce un-
employment) our problem may be considered
complex.
The observation that "real-world problems
are inherently 'complex', 'wicked' or 'squishy'"
[26, 34, 38] does not simply denote 'the state of
the world' but expresses value judgment. It
holds that the values one considers worth pur-
suing conflict or are interdependent with other
values that are also deemed worth pursuing or
worth maintaining. Now, if we commence with
a clear vision of the values we ought to serve
and maintain, what remains for exploration in
the realm of values? And if goal exploration
aims at revealing those values that can actually
be realized, what do we gain by revealing those
'true' values which cannot be served unless
other 'true' values are also served or main-
tained; what do we gain by rendering problems
unsolvable?
That problems are inherently complex simply
means that values are treated as given. This
contention advances a Pareto--optimum view of
the world where service to one set of cherished
values (or one group of people) necessarily
inflicts damage upon other cherished values (or
326 Dery--Decision-raaking. Problern-solring and Organi'_ational Learning
groups) and thus renders any intervention
unjustified. As Marcuse points out, to the extent
that values are stated in absolute ethical terms,
then "'there is no justification for any sup-
pression and sacrifice for the sake of future
freedom and happiness, revolutionary or other-
wise" [24, p. 145]. In short, the view that 'the
solution to any real world problem has some-
thing to do with the solution to other real world
problems' stands in contradiction to the call for
examination of values and comprehensive inter-
vention. One cannot hold to certain goals and
values (and, given these values, argue that
everything is related to everything else) and at
the same time decline to take these goals
seriously as a guide for action.
CONCLUSION: MAZE-BUILDING
AND O R G A N I Z A T I O N A L
LEARNING
Thus far I have attempted to show that goal
setting and resetting is an integral part of any
solving. But learning about new goals and val-
ues is not provided for in current conceptions of
organizational learning. When an organization
is said to be engaged in learning, we do not seem
to be occupied with what that organization is
supposed to be learning. To explain the appar-
ent contradiction between lack of improvement
over time and survival (which presumably indi-
cates the presence of learning) it has been
suggested that organizations may 'learn to sur-
vive' (as the cybernetic paradigm would have it
[37]) but still may not 'learn', i.e. improve their
practice over time [9]. Could it be that certain
intervention strategies to promote learning have
certain types of learning in mind? What would
these types be? Could it be that by promoting
one type of learning we sacrifice other types?
These questions, I think, deserve serious con-
sideration. To show their importance I will draw
a few observations from our previous dis-
cussion. The promotion of experimentation as a
means to improve learning appears self-
evidently 'good'. The problem of organizational
learning is often viewed in terms of the near
impossibility of being truly experimental
[14, 40]. What is overlooked in such conceptions
is the fact that experimentation can at best
provide knowledge or new hypotheses with re-
gard to the relationship between means and
ends--how to run better through a given maze,
not whether that maze is worth exploring. And,
this is the crucial point, what is taken as Nven
is, by definition, not subject to change. To learn
about the adequacy of certain means we put
them to the experimental test only to learn that
these means are or are not adequate to achieve
certain goals. But the adequacy of goals remains
unchallenged (see [10]).
This bias in favor of improving means via
learning is also apparent in intervention strate-
gies that focus on the individual member, sup-
posedly the organizational learning agent.
March and Olsen's learning cycle has in its
center the individual--his beliefs that "produce'
actions and then are transformed by the en-
vironmental responses that are evoked by his
actions [23]. Argyris and Schon's model also
proposes that organizations learn through their
members. They therefore call for educational
intervention at the individual level [5], but or-
ganizational premises remain untouched. To the
extent that members' learning is bounded by
organizational premises, presumably those
premises that turn a mob into an organization
[9], premises are not subjected to learning and
modification. That goal accomplishment breeds
complacency and reinforces current behavior
[14] should be taken as a warning sign whenever
we call for more (means-oriented) learning.
A closely related issue has to do with the
notion of 'problems trigger learning' [14], If
problems are not objective entities but are the
product of interpretation, what may (or may
not) trigger learning has to do with inter-
pretation not events, circumstances or
difficulties. Difficulties (that seem to be referred
to as problems) such as funds shortages, falling
revenues or diminishing popular support may
mount, yet without necessarily triggering learn-
ing or unlearning. To the extent that an or-
ganization chooses, for example, to handle such
difficulties by pre-developed definite procedures,
no learning can be said to have taken place.
Mounting difficulties may indicate the need for
learning. They may moreover provide an oppor-
tunity to re-examine current policies. But
whether learning may take place would be
largely insensitive to the mere presence of un-
desirable events. The fact that problem-ridden
organizations would not normally be considered
the best innovators may suggest that difficulties
are not the only triggers for learning [14, p. 17].
More importantly, it may also suggest that the
 Omega, Vol. 11, No. 4
obstacle to learning rests with inadequate in-
terpretation of events or, with regard to goal
discovery, inadequate treatment of or-
ganizational goals in problem-solving.
If we are willing to conceive of organizations
as learning entities, then we have to accept that
these entities must have an epistemology of their
own; a theory of knowledge that mediates be-
tween the organization and the welter of experi-
ence. Organizations cannot capture the truth of
experience, to use CI Lewis' metaphor [21, p.
307], if they have no net to catch it in. "We must
first be in possession of criteria which tell us
what experiences could answer what questions,
and how, before observation or experiment
could tell us anything" [21, p. 259]. Before we
hurriedly prescribe a better epistemology (our
own scientific theory of knowledge, naturally,
[19]), a theory of organizational learning must
first account for the epistemology or episte-
mologies organizations do use in the attempt to
make sense of the chaotic phenomenal world.
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ADDRESS FOR CORRESPONDENCE: Mr David Defy, Department
of Political Science, Hebrew University of Jerusalem,
Jerusalem, Israel.