Decision-Making
Processes
2
Definitions
Organizational decision making – process of identifying and solving
problems
1. Problem Identification Stage
2. Problem Solution
Programmed Decisions – repetitive and well defined
Nonprogrammed Decisions – novel and poorly defined
3
Individual Decision Making
Rational approach – ideal method for how managers
should make decisions
Bounded rationality perspective – how decisions are
made under severe time and resource constraints
4
Contingency
Framework for Using
Decision Models
5
Steps in the Rational
Approach
6
Bounded Rationality
Perspective
There is a limit to how rational managers can be—
time and resource constraints
Nonprogrammed decisions
Constraints and Tradeoffs
The Role of Intuition
Experience and judgment rather than logic
7
Same Product Different Cultures
https://www.youtube.com/watch?v=GOHvMz7dl2A
https://www.youtube.com/watch?v=cAbdmV3VOwA
8
Management Science
Approach
Use of statistics to identify relevant variables
Removed human element
Very successful for military problems
Good tool for decisions where variables can be indentified
and measured
A drawback of management science is that quantitative
data are always not rich and lack tacit knowledge
9
Water Crisis in India
India had long suffered floods during the monsoons, droughts during the dry seasons,
and periodic death causing famines during multi-year droughts. The old canal-based
irrigation system developed by the British had crumbled from neglect and wealthier
famers had turned to wells. Water shortages were compounded by the rapid population
growth in India and water pollution. Dinesh Shindey had been asked by the prime
minister to chair a task force to study the social, environmental, technical, and economic
aspects of the proposed River Linking Project. It was a massive federal government
project that required the construction of 34 new dams, 94 tunnels, and 12,500 kilometers
of new canals. Proponents believed it would greatly increase the supply of water, but
opponents believed it would never work as designed. Many simply believed that it was
impossible to complete such a massive project in corruption plagued India. A former
Secretary of the Ministry of Water Resources of India named S. Kannan believed that the
solution to the water crisis in India lay instead in a decentralized approach based on
conservation, the completion of numerous small, decentralized regional and local
projects, and in managing the demand for water. After meeting with S. Kannan, Shindey's
task force would write their recommendations in a report that would become a basis for
how India would respond.
10
Carnegie Model
11
What is your opinion?
When a manager knows the best solution to a
serious organizational problem and has the
necessary authority, it is best to simply make the
decision and implement it rather than involve other
managers in the decision process.
12
Crop Residue Burning in North-
Western India
The problems in agricultural practices in the north-western states of India and
the efforts of a non-governmental organization, CII-ITC Centre of Excellence
for Sustainable Development (CESD) and CII Foundation (CIIF), to address
the crop residue burning in those areas are being arbitrated for a long time
now. Through the journey of the CIIF team in learning about the problem and
piloting the solutions, they have witnessed the nature and scale of the problem
of crop residue burning (CRB) after harvesting the paddy crop. The decision-
making pattern of farmers and the factors that compel them to adopt the
unsustainable practice of CRB are in question!! Sensitization of farmers to the
adverse impact of such unsustainable agriculture practice not just in the local
ecology but also in the air quality of the nearby region of Delhi NCR has failed.
The farmers may learn about the various technical solutions to such issues but
also about non-technical aspects such as how successful collaborations
between various governmental and non-governmental stakeholders can help
address the problem of crop residue management (CRM).
The pilots on a smaller scale (select villages) by
CIIF generated valuable data about the key
considerations of farmers in choosing CRB over
the eco-friendly alternative CRM solutions.
13
Incremental Decision Model
Focus on structured sequence of activities from discovery
to solution
Large decisions are a collection of small choices
Decision interrupts are barriers
Identification Phase
Development Phase
Selection Phase
14
Problem Identification and
Problem Solution
Combining the Incremental Process and Carnegie
Models
15
Garbage Can Model
Pattern or flow of multiple decisions
Think of the whole organization
Explain decision making in high uncertainty -
organized anarchy:
Problematic preferences
Unclear, poorly understood technology
Turnover
Streams of events instead of defined problems
and solutions
16
Consequences of the
Garbage Can Model
1. Solutions may be proposed even when
problems do not exist
2. Choices are made without solving problems
3. Problems may persist without being solved
4. A few problems are solved
