Eleven
Decision-Making Chapter Processes
2000 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e
11-1
Today's Business Environment
New strategies Reengineering Restructuring Mergers/Acquisitions Downsizing New product/market development . . . Etc.
2000 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e
11-2
Decisions Made Within the Organization
Complex, emotionally charged issues More rapid decisions Less certain environment Less clarity about means/outcomes Requires more cooperation
2000 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e
11-3
A New Decision-Making Process
Required because
no one person has enough info to make all major decisions No one person has enough time and credibility to convince many
Relies less on hard data Guided by powerful coalition Permits trial and error approach
2000 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e
11-4
Steps in the Rational Approach to Decision-Making
Implement Chosen Alternative Choose Best Alternative
Monitor Decision Environment Define Decision Problem
8 7 6 5
1 2 3 4
Evaluate Alternatives
Specify Decision Objectives
Develop Alternative Solutions
Diagnose Problem
2000 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e
11-5
Constraints and Trade-offs During Non-programmed DecisionMaking
Bounded Rationality:
Limited time, information, resources to deal with complex, multidimensional issues
Trade-off
Trade-off
Personal Constraints:
Desire for prestige, success; personal decision style; and the need to satisfy emotional needs, cope with pressure, maintain self-concept
Decision/ Choice: Trade-off
search for a high-quality decision alternative
Trade-off
Organizational Constraints:
Need for agreement, shared perspective, cooperation, support, corporate culture and structure, ethical values
2000
Trade-off
Sources: Adapted from Irving L. Janis, Crucial Decisions South-Western College Publishing (New York: Free Press, 1989); and A. L. George, Presidential Cincinnati, Ohio Decision Making in Foreign Policy: The Effective Use of Daft, Organizational Theory and Design, Information and Advice (Boulder, Colo.: Westview Press, 1980).
11-6
7/e
Choice Processes in the Carnegie Model
Uncertainty
Information is limited Managers have many constraints
Coalition Formation
Hold joint discussion and interpret goals and problems Share opinions
Search
Conduct a simple, local search Use established procedures if appropriate Create a solution if needed
Conflict
Managers have diverse goals, opinions, values, experience
Establish problem priorities Obtain social support for problem, solution
Satisficing
Adopt the first alternative that is acceptable the to coalition
11-7
2000 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e
The Incremental Decision Process Model
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 2000
South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e
11-8
Learning Organization Decision Process When Problem Identification and Problem Solution Are Uncertain
PROBLEM IDENTIFICATION PROBLEM SOLUTION
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
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
2000 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e
11-9
Illustration of Independent Streams of Events in the Garbage Can Model of Decision-Making
Problems Solutions
Middle Management Participants Problems Solutions Choice Opportunities Participants Participants
Choice Opportunities Department A Problems Solutions Choice Opportunities Participants Solutions Participants Problems Solutions Choice Opportunities Problems Participants
Choice Opportunities Department B Problems Solutions Choice Opportunities Participants Solutions Participants
11-10
2000 Problems South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e
Contingency Framework for Using Decision Models
Certain 1 Individual: Rational Approach Computation Organization: Management Science 3 Individual: Judgment Trial-and-error Organization: Incremental Decision Process Model 4 Problem Consensus 2 Individual: Bargaining, Coalition Formation Organization: Carnegie Model Individual: Bargaining and Judgment Inspiration and Imitation Organization: Carnegie and Incremental Decision Process Models, evolving to Garbage Can
11-11
Uncertain
Certain
Solution Knowledge
Uncertain
2000 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e
Special Decision Circumstances
High-Velocity Environments Decision Mistakes and Learning Escalating Commitment
2000 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e
11-12
Workbook Activity
Decision Styles
Your decisions 1. 2. Decisions by others 1. 2.
2000 South-Western College Publishing Cincinnati, Ohio Daft, Organizational Theory and Design, 7/e
Approach used
Advantages and disadvantages
Your recommended decision style
11-13