Organisational Decision Making models

The different models for decision making in organisations - Rational, Carnegie, Garbage can,Unstructured......

1. Organizational Organizational
Decision making Decision making
ModelsModels
U.KALPANADEVI
MBA

2. Organizational decision making:
the process of responding to a problem by
searching for and selecting a solution or
course of action that will create value for
organizational stakeholders
Types:
 Programmed Decision
Non-Programmed Decision

3. Decision Making - Types
Programmed Decision
–Routine, virtually automatic decision making that
follows established rules or guidelines.
Non-Programmed Decision
–Nonroutine decision made in response to unusual or
novel opportunities and threats.
–The are no rules to follow since the decision is new.

4. 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

5. Steps in the Rational Approach

6. Limitations for the Rational
Decision Making Model
requires a great deal of time
requires great deal of information
assumes rational, measurable criteria are available and
agreed upon
assumes accurate, stable and complete knowledge of all
the alternatives, preferences, goals and consequences
assumes a rational, reasonable, non – political world

7. Bounded Rationality Perspective
There is a limit to how rational managers
can be—time and resource constraints
–Nonprogrammed decisions
Constraints and Tradeoffs
–Constraints impinge the decision maker
The Role of Intuition
–Experience and judgment rather than logic

8. Constraints and Tradeoffs
During Nonprogrammed Decision Making

9. Organizational Decision Making
Management Science Approach
Carnegie Model
Incremental Decision Model
Garbage Can Model
Unstructured model

10. Management Science Approach
Similar to rational individual approach
–Structured
Based on technology

11. Management Science Approach
Use of statistics to identify relevant
variables
Remove 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 not rich and lack tacit
knowledge

12. The Carnegie Model
Introduces a set of more realistic assumptions
about the decision-making process
–Satisficing: limited information searches to identify
problems and alternative solutions
–Bounded rationality: a limited capacity to process
information
–Organizational coalitions: solution chosen is a result
of compromise, bargaining, and accommodation
between coalitions

13. Carnegie Model

14. Differences Between the Rational
and Carnegie Models
Rational model Carnegie model
Information is availableLimited information is available
Decision making is costlessDecision making is costly
Possible alternatives are
generated
Limited range of alternatives are
generated
Solution is chosen by unanimous
agreement
Solution is chosen by bargaining
and compromise
Soln chosen is best for the orgnSoln chosen is satisficing for the
orgn

15. Incremental Decision Process
Model
Focuses on sequence of events from
problem discovery to solution

17. Garbage Can
Model -
a theory that
contends
that decisions in
organizations are
random and
unsystematic
Problems
Solutions
Choice
opportunities
Participants
Garbage Can Model

18. 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

19. 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

20. Garbage Can Model

21. Unstructured Decision Making
Model
Takes place when uncertainty is high
Unprogrammed decisions
Not a sequential process
Involves unpredictable decisions

22. Contingency Decision-Making
Two dimensions
–Problem consensus
–Technical knowledge about solutions

24. Design Essentials
Most decisions are not made in a logical manner
Individuals make decisions, but organizational
decisions are not made by a single individual
Conflict exists when problems are not agreed on
The garbage can model has become a description of
decision-making
Organizations operate in high-velocity environments
Allowing biases to cloud decision making can have
negative consequences

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