Decision Making in AdministrationIntroduction to Public Administration

Introduction

• Governance is predicated on decision making• Decision making considered extremely important to public administration• Direct impact• Long lasting impact

• Decisions can be:• Controversial• Source of criticism

• What do we mean by decision making?• Decision making – the process in which choices are made change (or leave unchanged)

an existing condition and to select a course of action most appropriate to achieving a desired objective, while minimizing risk and uncertainty to the extent that is possible.

Elements of Decision Making

• Uncertainty• Benefits (gains)• Process• Costs (expenditures)• Risk• Routinization• Routine decisions• Complex decisions

Approaches to Decision Making: The Rational Choice Model (Classical/Economic Model)

• Rational approach – an approach to decision making that is derived from economic theories of how to make the “best decisions”.• Assumption: Decision makers are rational.• What does this mean?• Achieve goal using the fewest amount of resources• Ability to separate ends (goals) from means (methods of achieving goals)• Ability to know the range of all possible choice alternatives.• Ability to rank order possible choices and choose the best choice available.• Ability to gather data and information to assist in decision making.• Ability to be objective in decision making.• Ability to know the consequences of any given decision.• Ability to remain consistent in decisions when a certain set of alternatives exist.

• Efficiency• Efficiency = maximizing outputs while minimizing inputs.

• Cost-benefit Analysis – technique designed to measure relative gains and losses resulting from alternative policy and program options.

Criticisms of the Rational Choice Model

• Basic Criticisms:• Rational choice theory may not apply to areas that are not purely economic.• Assumes that actors have perfect information for all of the abilities necessary for rationality.• Bounded rationality – the nation that there are prescribed boundaries, controls, or upper and lower limits on the

decision-making abilities of individuals within organizations.• Specific Criticisms:• It is impossible to separate facts and values.• It is impossible to separate ends from means.• Decision makers do not all agree on goals.• Failure to account for time.• Decision makers can only process so much information.• The rationality of decision makers is bounded (below).• It is impossible to determine or predict all possible outcomes for each choice.

Approaches to Decision Making: Incrementalism

• Incrementalism – a model of decision making that stresses making decisions through limited, successive comparisons with a more narrow range of alternatives rather than a comprehensive list of all alternatives.• Successive Limited Comparisons

• Decision makers can make small decisions that cause only a minor amount of change and determine whether the small change results in a move in a positive direction or a negative direction.

• Minimizes the chance that drastic results will occur.• Incremental adjustments can be made as each individual, short-term decision is made.

• More focused on the short term rather than the long term.• Predicated on the fact that incrementalists believe that it is impossible to account for all the ways a decision will affect other

decisions, processes, and outcomes.• Satisficing

• Incrementalists believe that they can only satisfice (satisfactory and suffices) during the decision making process.• Settle for good enough as opposed to perfectly rational.

• Intrinsic Value• Incremental decision making moves away from purely economic motivation and toward noneconomic motivations.

Criticisms of Incrementalism

• Limiting innovation.• Small successive comparisons may limit the ability to come up with bolder policy

proposals and decisions.• Small successive comparisons may also not meet the demands of the public (i.e.,

they may not satisfice).• The potential for inertia.• Responding only to short term needs through successive limited comparisons

misses the broader goals.• Members of the organization may seek to keep the status quo as small movements

and perceived failures can allow for conservers to prevent change (inertia).

Approaches to Decision Making: Mixed Scanning

• Mixed scanning – a model of decision making that combines rational-comprehensive model’s emphasis on fundamental and long-term consequences with the incrementalists’ emphasis on changing only what needs to be changed in the immediate situation.• Hybrid of rational choice and incrementalism.• Fundamental vs. Non-fundamental Decisions• Fundamental = rational-comprehensive• Non-fundamental = incrementalism• Allows for both a micro and macro view of decision making.• Micro decisions affect macro decisions and vice versa.

Criticisms of Mixed Scanning

• How does one determine what is a fundamental decision versus a non-fundamental decision?

• Is the classification of decisions necessarily correct?• Response from incrementalists: incrementalism can apply to large and small

decisions.

Other Considerations of Decision Making

• Resources• Time• Personnel• Money• Political capital

• Costs and Benefits• How does one determine if benefits are worth the costs?• How does one measure costs and benefits when they are non-economic?

• Grounds for Decision Making• Substantive

• “Decisions made on the merits of the question.”• Political

• Some decision makers will consider the net political losses or gains when making a decision.• Organizational

• The grounds for decision making here is the consideration of the impact of the decision on the organization.• Tension!

• The reliance on various grounds for decision making and the differing focuses of different employees can create tension within the organization.• Time

• Decision making is bounded by time.• There is not unlimited time to make decisions.

Information Resources and Decision Making

• Information is necessary to making rational decisions and the more information the better.• Rational choice represents the ideal.• Decision makers have data on all available choices and outcomes and it is possible to verify the

accuracy of all data.• Muddling through represent the reality.• Decision makers do not have access to all data to inform them of choices and potential outcomes

and it is impossible to verify the accuracy of all data.• Decision Analysis – the use of formal mathematical and statistical tools and techniques, especially

computers and sophisticated computer models and simulations, to improve decision making.• Statistics and the use of mathematical models have become a part of decision making.• This includes the use of computers and statistical packages (software).• Also includes the use of sampling techniques.

Warnings, Limitations, and Cautions of Technology and Information

• Technology• There are limits to what humans and computers can do and computers can never supplant human judgement.• Obtaining data can require use of significant resources.

• Acquisition costs• Analyzing data requires the use of organizational resources such as personnel and time.• Dangers

• Computer hacking• Viruses

• Information• Acquiring information (broader than data) also requires the use of resources.• Biases associated with information

• Biases affect the sending, relaying, and receiving of information.• Complete objectivity, as said before, is impossible.

• Deliberate distortion of information

Other Limitations on Decision Making

• Decision makers are limited by past decisions.• Groupthink – a mode of thinking that people engage in when they are deeply

involved in a cohesive in-group, when members striving for unanimity override their motivation to realistically appraise alternative courses of action.• Smaller groups

• Sunk costs – resources committed to a given decision, any cost involved in the decision that is irrecoverable.• Once resources are committed to a certain decision, these resources cannot be recovered.

Topics Not Covered

• The Problem of Goals• Ethics and Decision Making