T205 B

Block 04 Week 04
Managing within Organizations
Concept File 04
Section V Decision Making

Reading 27

The Elusive Multifaceted Nature of Decision

Making
It is useful to distinguish three broad styles of decision

making: the analytical, the negotiated, and the

incremental/emergent
27.1 Analytical approaches

According to this approach decision making can be

handled by research like activities such as gathering

data, developing models, forming interpretations,
devising options, etc. There are different versions of this
approach:

Reading 27

The Elusive Multifaceted Nature of Decision

Making

The stereotypical version sees decision-making as a

rational process of clarifying goals, gathering facts,
identifying options, comparing the costs and benefits of
each, and in light of all of this making the best choice.
Another view sees decision making as a matter of
developing a model where the best options becomes
obvious, and comparisons between alternatives
becomes unnecessary.
The analytic work might be handed over to a
consultant, etc. who would do the research &
report back with suggestions

Reading 27

The Elusive Multifaceted Nature of

Decision Making
Analytical views
A rational process of clarifying goals, gathering

facts, identifying options, comparing the costs &

benefits of each and then picking either the best,
or at least one that is good enough to do what is
required

A matter of developing a shared model of a

situation to the point where the best option is

obvious (detailed evaluative comparison between
options isnt really needed)

Reading 27

The Elusive Multifaceted Nature of

Decision Making

A third view focuses on the identification and tracking of

different kinds of uncertainties in order to manage
uncertainties related to:

1.

Values (what are we really trying to do?)

2.

The working environment (What practical information

we need about how things work?)

3.

Other decisions (How will what we are trying to do or

decide interact with what everyone else is doing and
deciding about?)

Reading 27

The Elusive Multifaceted Nature of Decision

Making

Reading 27

The Elusive Multifaceted Nature of Decision

Making
27.2 Negotiated approaches
As opposed to the idea of decision making as a
rational calculation of some sort, there are
circumstances where decisions are considered an
expression of an agreement, reached as the outcome
of some kind of negotiation between various
stakeholders.

Decisions made as a result of genuinely open and

free discussion amongst a genuinely diverse group of
stakeholders are often quite good and form the basis
of democratic politics.

Reading 27

The Elusive Multifaceted Nature of Decision

Making
Negotiated agreement can be seen as
an expression of the personalities & attitudes of
the decision makers as well as of their judgments
about the facts
This might lead to the dark side of decision
making

Reading 27

The Elusive Multifaceted Nature of Decision

Making
27.3 Incremental and emergent decisions:

As opposed to explicit decision-making, research into

what managers do suggest that they spend most of
their time engaging in a continual round of brief
conversations, with many interruptions, relating to
various concerns that they have.
These concerns are advanced through numerous,
small, spontaneous decisions in order to resolve
difficulties or to identify and benefit from opportunities.

Reading 27

The Elusive Multifaceted Nature of Decision

Making
27.3 Incremental and emergent decisions:

Big decisions are in reality the end-point of a messy

incremental process.

Mintzberg considers that the very high-level decisions

that control the long term strategic shaping of an
organization do in fact emerge from a repertoire, and a
vision instead of being deliberate.

Reading 27

The Elusive Multifaceted Nature of Decision

Making
27.3 Incremental and emergent decisions:

The process of decision making evolved over the years

in ways that are never explicitly stated or planned and
is affected by many sorts of random events.
Decision-making is affected by a mixture of factors
such as history, context, genuine choice, positive
feedback systems, calculation, negotiation and
emergent change. It is a step-by-step mode with small
decisions rather than one final one.

Reading 32 Rethinking Risk

What is multi-criteria mapping?
This technique is a systematic and transparent way of
comparing policy options.
It taps into a range of perspectives and expertise, and
produce an overview that maps the debate.
It does not attempt to foreclose deliberations by
coming up with a single solution, but seeks rather to
foster the exploration of alternative outcomes.
It carves a middle way between technical , purely
quantitative analysis and qualitative approaches.

Reading 32 Rethinking Risk

Reading 29
Strategic Information: Uses And Abuses
Organizations need information about the future because

they cannot respond instantly to change.

An organization that could see how the world had

changed and immediately adjust itself accordingly,

wouldnt have to bother about the future.

Modern attempts to manage the future have tended to

place less emphasis on predictions and more on

ensuring that the organization can respond quickly and
flexibly to change, which made long-term predictions less
necessary.

Reading 29
Strategic Information: Uses And Abuses
Looking ahead , even over the short term ,requires both:
Internal information (like costs, human resource
requirements, scope for innovation etc. ), and
External information (economic, market and/or political

and social trends etc.)

Both of these raise considerable difficulties.

The reasons for this include the following:
1- You only have historical data ( what used to happen
and not what will happen ).

Reading 29
Strategic Information: Uses And Abuses
Both of these raise considerable difficulties.
The reasons for this include the following:
1.You only have historical data (what used to happen
and not what will happen).
2.Many of the pieces of information that you would need
for future events (e.g. estimates of future inflation rates ,
interest rates etc.) can never be more than informed
guesses
3.The categories of activity you become interested in
may well be different from those you currently collect
information about .This activity could also be interacting
with other things.

Reading 31: Perspectives on decision making

If you look at how decisions are actually made , it turns out to be
rather different from the way that decision making theory ought
to be made. This reading looks at eight very different ways of
thinking about decision making .
These are :
1.
The rational choice model.
2.
Rational choice when you can only guess the outcomes
3.
Rational choice when you arent sure about your preferences.
4.
Decision making as the resolution of conflict.
5.
Decision making by rule.
6.
Opportunistic decision making
7.
Decision making as a symbolic event
8.
Information gathering and decision making.

Reading 31: Perspectives on decision making

1- The rational choice model.

It takes the view that people are free to choose what

they do and they normally exercise that choice in a
sensible way, looking for the best means to achieve
their ends. This theory is one of the standard ways to
explain peoples behavior. More specifically, it implies
that:

A. We know what we want what we are trying to

achieve.

B. We know the alternatives for actions.

Reading 31: Perspectives on decision making

C.

We know the likely consequences of each of these

actions.

D. We can compare the possible means in terms of their

consequences and decide which best meets what we

are trying to achieve.

This model can work very well in simple cases and

simple choices. However, it is problematic when

applied to big and serious decisions, and when
complicated issues are in place where uncertainty
about outcome and about preferences increases.

Reading 31: Perspectives on decision making

2- Rational choice when you can only guess

the outcomes
If you have a goal you can not achieve and you
dont know what your options are, you have to
start searching for possibilities (talking to
people, market research, brainstorming etc..)
and you will probably focus the search quite
close to where you are already.

Reading 31: Perspectives on decision making

2- Rational choice when you can only guess

the outcomes:
When do you stop the search?
In the rational model there were supposed to be
a definite no. of options, but in an openended search the range of possibilities is
effectively unlimited. But this cannot go on
forever because of bounded rationality and of
limitation of money and time

Reading 31: Perspectives on decision making

3- Rational choice when you arent sure about your
preferences.

The classic rational choice model assumes that the

value you place on some aspects of a potential action is

known and fixed, and its quality is similar to the size,
weight or color of a physical object. In fact personal
preferences are very far from having this kind of neat and
tidy quality.
1.Often we dont know what we want and make decisions
on grounds other than preference .I.E we just get on with
the assigned jobs.
2.Personal preferences are often relative to
circumstances rather than absolute.

Reading 31: Perspectives on decision making

1.
2.
3.
4.

Personal preferences change over time

Preferences for different kinds of things are often
hard to compare.
Choosing creates needs as well as satisfying them.
That is seeing the outcome of a choice may affect
what you like or dislike.
Group preferences are often vague and
inconsistent (because they are a compromise
amongst the different individual views of different
group members)

Reading 31: Perspectives on decision making

4- Decision making as the resolution of

conflict

So far we assumed that the problems with the

rational choice are all to do with having the right
information. But decision making usually involves
more than one person. This probably has relatively
little effect on the list of options for actions-indeed
having more than one person involved increases
your ability to search out a wide range of
possibilities and thus getting more differences in
preferences.

Reading 31: Perspectives on decision making

4- Decision making as the resolution of
conflict
Conflict is mainly an expression of difference in

preferences. So to get a group to an agreement about

a decision, people are either going to have to:
- Change their preferences, do deals or to Knuckle
under (subdue to power).

Reading 31: Perspectives on decision making

4- Decision making as the resolution of conflict
March talks about the political aspects of decision making
where deep conflicts tend to color everything:
information gathering can be manipulated
Decisions can be interpreted to produce effects very different

from those the decision maker had in mind,

Even for the decision maker, observation of the results of the

decision may change the values on which the decision was

based.

Reading 31: Perspectives on decision making

5- Decision Making by Rule.
The idea that we make choices by weighing up the pros
and cons of our options may seem attractive, but in reality
many decisions are made by finding and applying rules.
In this kind of decision making people are not normally
trying to maximize their own benefits it makes no
personal difference to them. Most organizations acquire a
large evolving body of rules and procedures of this sort.
As March puts it, the issue is not what the costs and
benefits are of a new idea, but what someone in your role
does in a situation like this. Any organizational role has
many rules of behavior that have evolved thru a history of
experience and imitation.

Reading 31: Perspectives on decision making

6-Opportunistic Decision Making
Here we have a radically different view of decision making.

Rather than having a rational ordered ,tidy and logical

approach to decision making ,managers normally deal with
portfolios of simultaneously interacting problems rather than
deal with them one by one.
Cohen et al introduced that Garbage Can theory. To him

instead of a problem or need finding a solution, the reverse

may occur, with a particular solution raising a new need. For
instance the reorganizing of a production process might
free up space, leading people to begin to see how useful a
recreation room might be.

Reading 31: Perspectives on decision making

This theory views a random flow of needs,

opportunities, enthusiasms, resources, problems,

solutions and so on in which managers are
continually looking for and creating opportunities and
needs and then marrying them together in
constructive combinations .
The manager becomes an orchestrator - marriagebroker for issues and opportunities

Reading 31: Perspectives on decision making

7-Decision making as a symbolic event
All models of decision making so far consider that the
reason for decision making is to make a decision. For
instance, if you are choosing a car, what matters is
choosing the best car, not impressing your friends when
they see you driving it.
However, there are many occasions when matters is
what the event stands for rather than its functional
outcome.

Reading 31: Perspectives on decision making

8- Information gathering and decision making.
The rational model implies that it is uneconomic to collect

more information than is needed for a particular decision.

However as March indicated this will lead to rules of thumb
such as:
1- Do not pay for information that cannot affect
choices you are making.
2- Do not pay for information if the same information
will be freely available anyway before you have to make the
decision for which it is relevant.
3-Do not pay for information that confirms something
you already know.

Reading 31: Perspectives on decision making

1.

2.

3.

However in reality the opposite happens for many

reasons :
Managers normally operate in general surveillance
mode rather than specific problem- solving mode.
They look for any thing that could help.
If information were collected only in relation to
known decisions, it would rarely be innocent
information and there will be bias.
Gathering, analyzing and presenting information is
often seen as something good managers do, so it
tends to happen whether needed or not.

Reading 34
Change Agents & Reactions to Change
34.3 Responding to resistance to change
Resistance to change can be attributed to psychological

reasons particularly in societies, which contribute very

positive connotations to change and very negative
connotations to stability and continuity.
Nonetheless not all change is good, nor all resistance is

bad.

Reading 34
Change Agents & Reactions to Change
34.3 Responding to resistance to change
Resistance can be a useful pointer to serious

flaws and inadequacies in what is being

proposed, or to differences in perspectives and
understanding that must be resolved for any
progress to occur.

Reading 34
Change Agents & Reactions to Change
There are ethical issues that determine the

extent of our ability to reduce resistance:

At organizational level, structural and cultural

factors can result in widespread resistance, (an

aggressive marketing strategy may be seen as
inappropriate to the culture of a caring
organization).

Reading 34
Change Agents & Reactions to Change

At group level, the issues are related to the need

to feel ownership of the change (support and

adopt) and to participate in the implementation of
the proposed change.
Communication and consultation can identify

areas of concern and reduce resistance.

Reading 34
Change Agents & Reactions to Change

At the individual level, peer (equal ) pressure

influences peoples reaction to proposed change,

and they may have concerns about its effects on
their own working practices, career aspirations or
promotion prospects.