Individual Decision making Rational Approach

Point of rational Approach is that Managers should try to use systematic procedures to arrive at good decisions.

When organizations face little competition and are dealing with well understood issues, managers generally use rational approach.

Individual Decision making Rational Approach

Implement Chosen Alternative Chose the Best Alternative Evaluative Alternatives Develop Alternative Solutions Diagnose the Problem Specify Decision Objectives Define Decision Problem Monitor Decision Environment

Decision Making Style

Satisficer
Multi-focused

Maximizer
Systemic

Flexible

Integrative

Uses both multi and uni focus and get maximum information

Decisive
Uni-focused

Hierarchic

Most complex style

Bounded Rationality
Limited time, information, resources to deal with complex multi dimensional issues

Trade off

Decision / Choice
Personal Constraints
Desire for prestige, success, emotional needs, coping with pressure, maintain self concept

Trade off

Search for High Quality Decision Alternative

Organizational Constraints
Need for agreement, shared perspectives, cooperation, support, corp -culture, structure and ethical values

Trade off

Organizational Decision Making

Management Science Approach

Use of mathematical models to quantify relevant variables and

developing alternative solutions with a probability model

You may like to include qualitative factors in final decision

making

Organizational Decision Making

Carnegie Model

Organization level decision involves many mangers and a final choice is based on coalition amongst the mangers.
Management coalitions are needed Goals are ambiguous and operative goals of department are inconsistent , hence managers disagree about problem priorities. Individual managers are rational but function with human cognitive limitations and other constraints

Organizational Decision Making

Uncertainty
Information limited many constraints

Coalition Formation
Hold joint discussion, interpret goals Share opinions Establish problem priorities obtain support for problem solution

Search
Conduct a simple search Use established procedure if appropriate Create a solution if needed

Conflict Diverse goals, opinions, values and experience

Satisficing Decision behavior

Adopt the first alternative that is acceptable to the coalition

Choice Processes in Carnegie Model

Incremental Decision Making Approach

Search Screen

Diagnosis

Design

Judgment Evaluation Choice

Recognition

Analysis Evaluation

Bargaining Evaluation Choice

Internal Interrupt

New Option Interrupt External interrupt

 Every step characterized by decision interrupts

Identification Phase
Recognition

Diagnosis

Development Phase
Search Screen Design

Selection Phase
Judgment (evaluation choice)

Analysis (evaluation)
Bargaining (evaluation choice) Authorization

Organizational Decision Making

Garbage Can Model

Organized Anarchy ( highly uncertain conditions) Problematic Preferences ambiguity at every stage Goal, problems alternative are ill defined Unclear or poorly understood technology cause and effect difficult to identify and explicit database not available Turnover of employees Attrition, busy and limited participation

Garbage Can Model

Organizational Decision Making

Stream of Events Problems Gap between desired and current Potential solutions Solution exist independent of problems Participants Variation in recognition of problem solution by managers Choice opportunities Learned idea and problem arisen can match and a decision can be taken

Organizational Decision Making

Consequences - Garbage Can Model

Solutions may be proposed even when problem do not exist

Choices are made without solving the problem

Problem may persist without being solved

A few problems are solved

Contingency Framework for Using Decision Models Certain Individual Rational Approach Certain Problem Consensus Uncertain

Individual Bargaining, Coalition Formation

Organization Management Science

Organization Carnegie Model

Solution Knowledge

Individual Judgment, Trial and Error

Individual Bargaining & Judgment Inspiration and imitation Learning Organization

Uncertain

Organization Incremental Decision making model

Individual Decision Making Escalation of Commitment

Project Characteristics
Delayed return on investment influence the decision

Psychological determinants
Biases negative information ignored

Social forces
Peer pressure - to save face

Organizational determinants
Dysfunctional politics Communication breakdown