DECISION MAKING PROCESSES

IN ORGANISATIONS
 RATIONAL APPROACH

PROBLEM IDENTIFICATION
• Monitor the decision environment
– Define the decision problem
• Specify decision objectives
• Diagnose the problem
 RATIONAL APPROACH (contd.)

PROBLEM SOLUTION
• Develop alternative solutions
• Evaluate alternatives
• Choose the best alternative
• Implement the chosen alternative
BOUNDED RATIONALITY Individual decision-making
Limited time, information, TRADE-OFF
resource to deal with complex,
multi-dimensional issues

PERSONAL
TRADE-OFF CONSTRAINTS
DECISION
TRADE-OFF Desire for prestige, / CHOICE
success; personal TRADE-OFF
decision style; and the Search for
need to satisfy emotional a high
ORGANISATIONAL needs, cope with quality
CONSTRAINTS pressure, maintain self decision
concept alternative
Need for agreement, shared
perspective, cooperation,
support, corporate culture and
structure, ethical values
TRADE-OFF

( Source : Janis 1980 )

UNCERTAINITY COALITION FORMATION

• Information is • Hold joint discussions SEARCH

limited and interpret goals and • Conduct a simple,
problems local search
• Managers have
many constraints • Share opinions • Use established
• Establish problem procedures, if
priorities appropriate
CONFLICT • Obtain social support • Create soln. if
for problems, solution needed
Managers have
diverse goals,
opinions, values,
experience SATISFICING DECISION

Adopt the first alternative

that is acceptable to
coalition
CARNEGIE MODEL
 INCREMENTAL MODEL
• Ongoing decisions over extended period
• Identification
• Development
• Interruption
• Solution
• New options
– Multiple cycles
 GARBAGE CAN MODEL
• FLOW OF MULTIPLE DECISIONS
• ORGANISED ANARCHY
– Problematic preferences
– Poorly understood technology
– Turnover of participants
GARBAGE CAN MODEL (contd.1)

• STREAM OF EVENTS
– Problems are points of dissatisfaction
– Solutions exist independent of problems
– Participants vary widely

Choice occurs when the right mix of

participants, solutions and problems exists
GARBAGE CAN MODEL (contd.2)

• CONSEQUENCES
– Solutions may be proposed even when
problems do not exist
– Choices are made without solving problems
– Problems may persist without being solved
– A few problems are solved