Decision Making ProcessesDecision Making Processes

Chapter 12Chapter 12

Good Terms to KnowGood Terms to Know Organizational Decision-makingOrganizational Decision-making

Problem identificationProblem identification Problem solutionProblem solution Programmed decisionsProgrammed decisions Nonprogrammed decisionsNonprogrammed decisions

Individual Decision MakingIndividual Decision Making Two ApproachesTwo Approaches

Rational ApproachRational Approach When do we use it?When do we use it?

Rational ApproachRational Approach

Individual Decision MakingIndividual Decision Making Bounded Rationality PerspectiveBounded Rationality Perspective

When do we use it?When do we use it? Intuitive Decision-makingIntuitive Decision-making

Nonprogrammed=Nonprogrammed= Programmed= Programmed=

Organizational Decision Organizational Decision MakingMaking

What is it?What is it? Four modelsFour models

Management Science ApproachManagement Science Approach Carnegie ModelCarnegie Model Incremental Decision Making ProcessIncremental Decision Making Process Garbage Can ModelGarbage Can Model

Management Science Management Science ApproachApproach

Similar to rational individual Similar to rational individual approachapproach StructuredStructured

TechnologyTechnology

Carnegie ModelCarnegie Model CoalitionsCoalitions Why use coalitions?Why use coalitions? ImplicationsImplications

SatisficationSatisfication Short-term outlookShort-term outlook Discussion and bargainingDiscussion and bargaining

Problem identification and implementation Problem identification and implementation strategiesstrategies

Incremental Decision Process Incremental Decision Process ModelModel

Focuses on sequence of events from Focuses on sequence of events from problem discovery to solutionproblem discovery to solution

Learning OrganizationsLearning Organizations What are they?What are they?

How are they different from other How are they different from other organizations?organizations?

Two Approaches to Decision MakingTwo Approaches to Decision Making Combine Incremental Process & Combine Incremental Process &

Carnegie ModelsCarnegie Models Garbage Can ModelGarbage Can Model

Garbage Can ModelGarbage Can Model Extremely organic environmentsExtremely organic environments Three CausesThree Causes

Problematic preferencesProblematic preferences Unclear, poorly understood technologyUnclear, poorly understood technology TurnoverTurnover

Garbage Can ModelGarbage Can Model Stream of EventsStream of Events

ProblemsProblems Potential solutionsPotential solutions ParticipantsParticipants Choice opportunities Choice opportunities

ConsequencesConsequences

Garbage Can ModelGarbage Can Model

Contingency Decision-Contingency Decision-MakingMaking

Two dimensionsTwo dimensions Problem consensusProblem consensus Technical knowledge about solutionsTechnical knowledge about solutions

Special Decision Special Decision CircumstancesCircumstances

High Velocity EnvironmentsHigh Velocity Environments CharacteristicsCharacteristics How to overcome themHow to overcome them

Decision Making & LearningDecision Making & Learning Escalating CommitmentEscalating Commitment

Why does it happen?Why does it happen?