See discussions, stats, and author profiles for this publication at: decision-makingArticle· January 2014DOI: 10.1057/9781137294678.0160CITATION1READS8,7011 author:Some of the authors of this publication are also working on these related projects:Decision makingView projectCogntive ConsistencyView projectJ. Edward RussoCornell University92PUBLICATIONS6,447CITATIONSSEE PROFILEAll content following this page was uploaded by J. Edward Russo on 26 September 2017.The user has requested enhancement of the downloaded file.
decision-makingDefinitionDecision-making is the process whereby an individual,group or organization reaches conclusions about whatfuture actions to pursue given a set of objectives and limitson available resources. This process will be often iterative,involving issue-framing, intelligence-gathering, coming toconclusions and learning from experience.AbstractThis entry aims to connect behavioural research ondecision-making over a number of decades to the field ofstrategic management. This intersection has not been asfully developed as it could be and hence presents richopportunities for improving strategic decision-making inand by organizations. We shall cover both individual andorganizational findings using our four-phased decisionframework (Russo and Schoemaker, 2002), with speciallinks to the domain of strategic decisions. These includecorporate strategic choices as well as adopting a strategicapproach to making tactical and even operational decisionsin organizations.Multiple views exist about strategic decision-makingin complex firms, from rational, top-down perspec-tivestoincrementalandpower-basedones(seeSchoemaker, 1993). The rational unitary actor modelposits that organizations carefully scan their environ-ment and objectively match external opportunitieswith internal strengths. By contrast, the organiza-tional view emphasizes that even though these maybe the intentions of individual actors, the design ofthe organization (in terms of structure and process)greatly inﬂuences what is perceived, encoded andacted upon. The political view especially questionsthe intended collective rationality of organizationalactors and frames them as coalitional in nature.Stronger groups will often enhance their power andinterests at the expense of the minority or even thefirm’s overall well-being (Allison, 1971). Lastly, somescholars view the organization as entangled in its owninner complexity, with limited coping routines and ahigh degree of context-sensitivity. The garbage canmodel (Cohen, March and Olsen, 1972) posits thatwhat happens and why in organizations dependsgreatly on the vagaries of the moment, that is to saythe actors involved, the timing of the decision, hiddenagendas, information ﬂows and other details in themosaic of organizational life.