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Decision-Making

Processes

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OUTLINE:I. MODELS OF THE DECISION-MAKING PROCESS

1) Rational models of group decision-making2) Alternatives to rational models

II. SMALL-GROUP DECISION MAKING

1) Phase model of decision making proposed by Fisher*Groupthink2) Functional theory of group decision making by Hirokawaand Gouran

III. PARTICIPATION IN DECISION MAKING 2 Models ofParticipative Decision Making:

1) Affective model2) Cognitive model

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I. MODELS OF THEDECISION-MAKING PROCESS

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1) Rational Models of DecisionMaking

According to Nutt (1984), rational model (also called normativemodel) includes five stages.

1 st stage: Define the problem

2nd stage: Generate ideas to deal with the problem

. 3 rd stage: Subgroups explore the problem in depth

4 th stage: The costs and benefits of potentialsolutions are judged

5 th stage: Whatever solution came out on topduring the evaluation stage is launched

Consider, for instance, a team of managers trying to make a decision aboutadopting a new server for the companys network of computers.

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2) Alternatives to Rational Models

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2) Alternatives to Rational Models

Rational Models

According to March & Simon, are "optimizing models,"meaning that they search for the single best solution butthis is not how it works in reality. They believe that it is

more realistic to look at organizational decision making asa satisficing process.

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2) Alternatives to Rational Models

Alternative Models: How do people actually make decisions?

1. Satisficing Process (March and Simon,1958)

A process in which the search is not for a single optimalsolution but for a solution that will work well enough for dealing with

the situation.

Decision makers are characterized by bounded rationality . Thatis, decision makers attempt to make logical decisions, but they arelimited cognitively(e.g., humans are not always perfectly logical) andby the practical aspects of organizational life (e.g., limits in time andresources).

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2) Alternatives to Rational Models

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2) Alternatives to Rational Models

2. Intuitive Process

Barnard argues that decision makers are often forced to makequick decisions without the opportunity for information search anddebate.

"Gut" decision making

This kind of decision making is based on past experience

in similar contexts.

Analogical- That is, a manager faced with making a decision willconsider what has worked in similar situations in the past. Byanalogy, a similar solution should work again.

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2) Alternatives to Rational Models

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2) Alternatives to Rational Models

3. Garbage Can Model (Cohen, March & Olson, 1972).

Problems, solutions, participants, and choices are all dumped together ina relatively independent fashion.

The "decision" that arises in this situation is not one of logical search andsolution but merely happy coincidence

The Garbage Can model states that a given situation cannot be properlyunderstood until after it happens (i.e., using hindsight to make sense of theexperience), making the model retrospective in nature

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II. SMALL-GROUPDECISION MAKING

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Descriptive Models of Small-GroupDecision Making

Most models of group decision-making propose that groupsgo through a series of phases as they systematically

attempt to reach decisions.

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A) Phase model of decision makingproposed by Fisher (1970)

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GROUPTHINK, a psychologicalphenomenon

Groupthink refers to amode of thinking that peopleengage in when they are deeplyinvolved in a cohesive in group,when the members striving forunanimity overrides theirmotivation to realisticallyappraise alternative courses ofaction (Janis, 1982).

There is more concern withappearing cohesive andmaintaining group relationsthan there is with making ahigh-quality decision

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GROUPTHINK, a psychologicalphenomenon

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Pitfalls that can result from pressure toward uniformity inan overly cohesive group.

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, ,chances of making an effectivedecision?

The most complete explanation of the role communication plays inenhancing decision quality comes from Randy Hirokawa and Dennis Gouranin their func t iona l theory o f g roup dec i s ion m aking .

Functional theory argues that effective decision making depends on groups

attending to critical functions through group communication.

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B) Functional theoryof group decision making

Critical Functions are as follows:

o The group should have a correct understanding of the issuesto be resolved.

o The group should determine the minimal characteristicsrequired in order for any alternative to be acceptable.

o The group should identify a relevant and realistic set ofalternatives.

o The group should carefully examine the alternatives in relationto each previously agreed-upon required characteristic.

o The group should select the alternative that is most likely tohave the desired characteristics.

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Beyond RationalGroup Processes

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Beyond Rational Group Processes

Symbo l ic co nvergence theory- this theory considers the roleof communication such as stories and jokes in creating a

feeling of group identity.

Bon a f ide g roups perspec t ive- proposing that group researchconsiders factors such as shifting membership, permeablegroup boundaries, and interdependence within anorganizational context.

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III. PARTICIPATION IN DECISIONMAKING

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I. ATTITUDINAL EFFECTSOF PARTICIPATION

2. Job Involvement

3. OrganizationalCommitment

Effects of Participation in Decision Making (PDM)

ff f

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Effects of Participation in DecisionMaking (PDM)

II. Cognitive Effects Enhanced use of information from a wide range oforganizational members and a

Greater employee understanding of decisions and theorganization as a whole.

III. Behavioral Effects Improved productivity and an increasein the effectiveness of decisions.

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Models of the Participation Process

I. Affective Model

PDM

Satisfactionof Higher-OrderNeeds

WorkSatisfaction

Motivation

Productivity

f

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Models of the Participation Process

II. Cognitive Model

Participative Applications in

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Participative Applications inOrganizations and Workplace

DemocracySeibold and Shea (2001) considered the wide array ofparticipation programs used by organizations:

type of participation (e.g., consultative or participative),

in terms of the content of decision making (including working conditions,company policy, and hiring),

and in terms of the locus of participation (e.g., departmental level or

organizationallevel).

k l

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Workplace DemocracyCheney (1995) defines workplace democracy asa system of governance which truly values individuals goals

and feelings as well as typically organizational objectives which actively fosters the

connection betweenthose two sets of concerns by encouraging individual

contributions to important organizational

choices, and which allows for the ongoing modification of theorganizations activities and policies by the group.

W k l D

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Workplace Democracy Workplace democracy involves collaboration among multiple

stakeholders (Deetz, 1995), including

workers,investors,consumers,

suppliers,host communities,and the world economic community.

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Democracy

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Beyond Decisions: KnowledgeManagement Systems

Knowledgemanagement involvesidentifying and

harnessing intellectualassets to alloworganizations to build onpast experiences andcreate newmechanisms forexchanging and creatingknowledge

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Beyond Decisions: KnowledgeManagement Systems

EXPLICIT KNOWLEDGE + TACIT KNOWLEDGE

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hank you