second decission making process.pdf - See discussions stats and author profiles for this publication at https\/www.researchgate.net\/publication\/320042464

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See discussions, stats, and author profiles for this publication at: decision-making Article · January 2014 DOI: 10.1057/9781137294678.0160 CITATION 1 READS 8,701 1 author: Some of the authors of this publication are also working on these related projects: Decision making View project Cogntive Consistency View project J. Edward Russo Cornell University 92 PUBLICATIONS 6,447 CITATIONS SEE PROFILE All content following this page was uploaded by J. Edward Russo on 26 September 2017. The user has requested enhancement of the downloaded file.
decision-making Definition Decision-making is the process whereby an individual, group or organization reaches conclusions about what future actions to pursue given a set of objectives and limits on available resources. This process will be often iterative, involving issue-framing, intelligence-gathering, coming to conclusions and learning from experience. Abstract This entry aims to connect behavioural research on decision-making over a number of decades to the field of strategic management. This intersection has not been as fully developed as it could be and hence presents rich opportunities for improving strategic decision-making in and by organizations. We shall cover both individual and organizational findings using our four-phased decision framework ( Russo and Schoemaker, 2002 ), with special links to the domain of strategic decisions. These include corporate strategic choices as well as adopting a strategic approach to making tactical and even operational decisions in organizations. Multiple views exist about strategic decision-making in complex firms, from rational, top-down perspec- tives to incremental and power-based ones (see Schoemaker, 1993 ). The rational unitary actor model posits that organizations carefully scan their environ- ment and objectively match external opportunities with internal strengths. By contrast, the organiza- tional view emphasizes that even though these may be the intentions of individual actors, the design of the organization (in terms of structure and process) greatly influences what is perceived, encoded and acted upon. The political view especially questions the intended collective rationality of organizational actors and frames them as coalitional in nature. Stronger groups will often enhance their power and interests at the expense of the minority or even the firm’s overall well-being ( Allison, 1971 ). Lastly, some scholars view the organization as entangled in its own inner complexity, with limited coping routines and a high degree of context-sensitivity. The garbage can model ( Cohen, March and Olsen, 1972 ) posits that what happens and why in organizations depends greatly on the vagaries of the moment, that is to say the actors involved, the timing of the decision, hidden agendas, information flows and other details in the mosaic of organizational life.

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