1 decision-making processes. 2 organizational decision making is defined as the process of...
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Decision-Making Decision-Making ProcessesProcesses
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Organizational Decision MakingOrganizational Decision Making
Is defined as the process of Is defined as the process of identifying and solving problemsidentifying and solving problems
Has two stages: problem Has two stages: problem identification and problem solutionidentification and problem solution
Decisions vary in complexity Decisions vary in complexity continuum and are categorized as continuum and are categorized as programmed (routine) or non programmed (routine) or non programmed (non-routine)programmed (non-routine)
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Individual Decision MakingIndividual Decision Making
Rational modelRational model Bounded Rational PerspectiveBounded Rational Perspective
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Steps in the Rational Approach to Steps in the Rational Approach to Decision-Making (Decision-Making (11))
MonitorDecision
Environment
ImplementChosen
Alternative
DefineDecisionProblem
Specify Decision
Objectives
DiagnoseProblem
DevelopAlternativeSolutions
EvaluateAlternatives
ChooseBest
Alternative1
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CaseCase Nilgiriside Department store has a number Nilgiriside Department store has a number
of drivers who operate its fleet of delivery of drivers who operate its fleet of delivery trucks.trucks.
At the end of the day the crew are required At the end of the day the crew are required to complete a delivery report that takes 5-to complete a delivery report that takes 5-10 min. each10 min. each
Preparation of this report has been a Preparation of this report has been a frequent source of conflict between the frequent source of conflict between the management and the crewmanagement and the crew
The crew often fail to complete the report The crew often fail to complete the report properly or delay completing it, which properly or delay completing it, which causes the supervisor to criticize or causes the supervisor to criticize or threaten themthreaten them
What should be done?????What should be done?????
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Individual Decision making: A Individual Decision making: A Comparative AnalysisComparative Analysis
Rational ApproachRational Approach Involves systemic analysis Involves systemic analysis
of the problem, choices of the problem, choices made & its made & its implementation in a implementation in a logical step by step logical step by step manner.manner.
Generally used in Generally used in programmed decisions programmed decisions where decision maker has where decision maker has sufficient time for an sufficient time for an orderly thoughtful processorderly thoughtful process
Bounded Rationality Bounded Rationality PerspectivePerspective
Used when decisions are Used when decisions are non-programmed & ill-non-programmed & ill-defineddefined
Rely more on intuition & Rely more on intuition & experience rather than experience rather than sequential logic or explicit sequential logic or explicit reasoningreasoning
Takes short cutTakes short cut
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Trade-off
Trade-off
Trade-off
Constraints and Trade-offs Constraints and Trade-offs During Non-programmed Decision-During Non-programmed Decision-
MakingMaking
Personal Constraints:Desire for prestige, success;personal decision style; and
the need to satisfy emotional needs, cope with pressure,
maintain self-concept
Organizational Constraints:Need for agreement, sharedperspective, cooperation,
support, corporate culture and structure, ethical values
Bounded Rationality:Limited time, information,
resources to deal with complex,multidimensional issues
Decision/Choice:
Search fora high-quality
decisionalternative
Trade-off
Trade-off
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Organizational Decision MakingOrganizational Decision Making
Management Science ApproachManagement Science Approach Carnegie ModelCarnegie Model Incremental Decision Process ModelIncremental Decision Process Model Garbage Can ModelGarbage Can Model
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Management Science ApproachManagement Science Approach
Is the analog to rational model of individual Is the analog to rational model of individual decision makingdecision making
Came in to being during WW IICame in to being during WW II Used mathematical and statistical techniques to Used mathematical and statistical techniques to
urgent and large scale military problems eg. urgent and large scale military problems eg. Missile trajectory, aiming battleship gunsMissile trajectory, aiming battleship guns
Same approach diffused in to corporations and Same approach diffused in to corporations and big businessesbig businesses
Used in quantitative data analysis, operations Used in quantitative data analysis, operations researchresearch
Use in situations where variables are measurableUse in situations where variables are measurable
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Carnegie ModelCarnegie Model Based on bounded rationality approach to Based on bounded rationality approach to
individual and organizational decision makingindividual and organizational decision making Organizational level decisions involved many Organizational level decisions involved many
managers and final choice was based on a managers and final choice was based on a coalition (alliance) among managerscoalition (alliance) among managers
Reason being organizational goals are ambiguous Reason being organizational goals are ambiguous and operative goals are inconsistentand operative goals are inconsistent
Managers tend to be rational but are constraint Managers tend to be rational but are constraint by time, resources and mental capacities. So they by time, resources and mental capacities. So they form coalitionform coalition
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Carnegie Model contd..Carnegie Model contd.. Decisions made under this model are satisficing Decisions made under this model are satisficing
rather than optimising problem solutionsrather than optimising problem solutions Means that organizations accept satisfying rather Means that organizations accept satisfying rather
than optimising solutionthan optimising solution Managers are concerned with immediate Managers are concerned with immediate
problems and short term solutions problems and short term solutions So they engage in problemistic search (looking So they engage in problemistic search (looking
around in the immediate environment for around in the immediate environment for solutions)solutions)
Discussion and bargaining are especially Discussion and bargaining are especially important in problem identification stage of important in problem identification stage of decision making.decision making.
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Choice Processes in the Choice Processes in the Carnegie ModelCarnegie Model
Hold joint discussionand interpret goals and problems
Share opinions
Establish problem priorities
Obtain social supportfor problem, solution
Adopt the firstalternativethat is acceptableto the coalition
Conduct a simple,local search
Use established procedures ifappropriate
Create a solutionif needed
Managers havediverse goals,opinions, values,experience
Information is limitedManagers havemany constraints
Uncertainty Coalition Formation Search
Satisficing
Conflict
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The Incremental Decision Process The Incremental Decision Process ModelModel
Places less emphasis on political and Places less emphasis on political and social factors and more on structured social factors and more on structured sequence of activities undertaken from the sequence of activities undertaken from the discovery of the problem to its solutiondiscovery of the problem to its solution
Major organization choices are usually a Major organization choices are usually a series of small choices that combine to series of small choices that combine to produce the major decision.produce the major decision.
Organizations move through several Organizations move through several decision points and may hit barriers along decision points and may hit barriers along the way called ‘decision interrupts’ which the way called ‘decision interrupts’ which means organization has to look for means organization has to look for alternatives.alternatives.
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The Incremental Decision The Incremental Decision Process ModelProcess Model
· · IdentificationIdentification PhasePhase: : problem recognitionproblem recognition– RecognitionRecognition (becoming aware of the problem & the (becoming aware of the problem & the
need to take the decision)need to take the decision)– Diagnosis Diagnosis (systematic & detailed if time permits or or (systematic & detailed if time permits or or
quick & immediate)quick & immediate) Development PhaseDevelopment Phase: : solution identificationsolution identification
– Search Search (look for alternatives within the organizations (look for alternatives within the organizations repertoire of solutions)repertoire of solutions)
– Screen Screen (eliminate what does not apply)(eliminate what does not apply)– Design Design (if the above is not applicable design a custom (if the above is not applicable design a custom
made solution)made solution)
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The Incremental Decision Process The Incremental Decision Process Model contd..Model contd..
Selection PhaseSelection Phase: : choosing the solutionchoosing the solution– Judgment: Judgment: ((when final choice falls on a single decision when final choice falls on a single decision
maker & judgment is based on experience) maker & judgment is based on experience) – Analysis: Analysis: (alternatives evaluated in a more systematic (alternatives evaluated in a more systematic
manner like management science techniques)manner like management science techniques)– Bargaining: Bargaining: (happens when selection involves group of (happens when selection involves group of
decision makers, so conflict happens, solved through decision makers, so conflict happens, solved through coalition of carnegie model)coalition of carnegie model)
– Authorization: Authorization: (when decision is finally accepted (when decision is finally accepted authorization takes place)authorization takes place)
Dynamic FactorsDynamic Factors:: (refer to the feedback loops as a result (refer to the feedback loops as a result of decision interruptsof decision interrupts
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Models for Learning OrganizationModels for Learning Organization
Combining the Incremental process Combining the Incremental process and Carnegie modelsand Carnegie models
Garbage Can modelsGarbage Can models
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Learning Organization Decision Process When Learning Organization Decision Process When Problem Identification and Problem Solution Are Problem Identification and Problem Solution Are
UncertainUncertain
When problem identification isuncertain, Carnegie model applies
Political and social process isneeded
Build coalition, seek agreement,and resolve conflict about goalsand problem priorities
When problem solution is uncertain, Incremental process model applies
Incremental, trial-and-errorprocess is needed
Solve big problems in little steps
Recycle and try again when blocked
PROBLEM IDENTIFICATION PROBLEM SOLUTION
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Garbage Can Model of Decision-MakingGarbage Can Model of Decision-Making
Deals with the pattern or flow of multiple Deals with the pattern or flow of multiple decisions as opposed to how a single decisions as opposed to how a single decision is made (as in Incremental and decision is made (as in Incremental and Carnegie models)Carnegie models)
Are applied to organic structures operating Are applied to organic structures operating in highly uncertain environmentin highly uncertain environment
Termed as organized anarchiesTermed as organized anarchies
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Garbage Can Model: CharacterisrticsGarbage Can Model: Characterisrtics
Decision process is not seen as a Decision process is not seen as a sequence of steps beginning with a sequence of steps beginning with a problem and ending with a solutionproblem and ending with a solution
A solution may be around when there is no A solution may be around when there is no problemproblem
A problem may have no solutionA problem may have no solution Garbage can is a mix of problems, Garbage can is a mix of problems,
potential solutions, capabilities of potential solutions, capabilities of participants and choice opportunitiesparticipants and choice opportunities
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Garbage Can Model: consequencesGarbage Can Model: consequences
Solutions may be proposed even Solutions may be proposed even when problems do not existwhen problems do not exist
Choices are made even without Choices are made even without solving problemssolving problems
Problems may persist without being Problems may persist without being solvedsolved
A few problems are solvedA few problems are solved
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Illustration of Independent Streams of Events in Illustration of Independent Streams of Events in the Garbage Can Model of Decision-Makingthe Garbage Can Model of Decision-Making
ProblemsSolutionsChoice
OpportunitiesParticipants
ProblemsSolutionsChoice
OpportunitiesParticipants
ProblemsSolutionsChoice
OpportunitiesParticipants
Choice OpportunitiesChoice Opportunities
Participants Participants
Middle Management
Problems Solutions
Solutions
Participants
ProblemsProblems
Solutions
ChoiceOpportunities
Problems
Participants
Participants
Solutions
Department A Department B
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Certain Uncertain
Contingency Framework for Using Contingency Framework for Using Decision ModelsDecision Models
ProblemConsensus
Individual: Rational Approach Computation
Organization: Management Science
Individual: Bargaining, Coalition Formation
Organization: Carnegie Model
Individual: Judgment Trial-and-error
Organization: Incremental Decision Process Model
Individual: Bargaining and Judgment Inspiration and ImitationLearning Organization: Carnegie and Incremental Decision Process Models, Evolving to Garbage Can
SolutionKnowledge
Certain
Uncertain
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