ORGANIZATION

Organization Decision making

Models
 Organizational Decision Making process
Organizational level decisions involve several managers.
Problem identification and solution involve many
departments, multiple view points and even organizations
which are beyond the scope of an individual manager. Four
different types of organizational decision making processes
have been identified:
1. Management science approach
2. Carnegie model
3. Incremental decision process model
4. Garbage can model
 Management Science Approach
• This model is analog to the rational approach by individual
decision maker and came into being during the WW II.
Mathematical and statistical techniques were applied to large
scale military problems that were beyond the ability of
individual decision makers. This system is applied to
problems that are analyzable, measurable, and can be
structured in a logical way.
• Amongst is limitations, it can not sense qualitative date like
‘competitor reactions’, ‘customer taste’, ‘product warmth’
etc that can not be incorporated in any mathematical model.
 Carnegie Model
• Organization level decision making involve many managers
and that final choice is based on a coalition among the
managers, rather than by the one at the top based on
information fed to them. A coalition is an alliance among
several managers and stakeholders (managers from line depts,
staff specialists, powerful customers, union leaders, bankers,
external groups etc) who agree about the organizational goals
and priorities. Two reasons why coalitions are made
• 1. Organizational goals are often ambiguous and operative
goals of the departments are inconsistent
• 2. Managers do not have time, resources and mental capacity
to identify all dimensions and process all information for
decision making.
 Carnegie Model Contd.
• Under this model the decisions are made to satisfice rather
than optimize problem solutions. The coalition will accept a
solution that is perceived as satisfactory to all coalition
members
• Managers are concerned with immediate problems and their
immediate solutions. They don’t expect a perfect solution in a
conflict laden and ill defined situation
• One of the best and most visible coalition builders of recent
times was George W Bush who sought a broad based coalition
before the start of the war in Iraq to gain agreement for his
vision of a “new world order”
 Choice Process In Carnegie Model

Search
Uncertainty Conduct a simple
Information is limited Coalition formation local search
Managers have many Hold joint discussions Use established
constraints and interpret goals and procedure if
problems Appropriate
Share opinion Create solutions if
Establish problem needed.
Conflict priorities
Managers have Obtain support for
diverse goals, opinions, problem solution
values, experience

Satisficing decision behavior

Adopt the first alternative
That is acceptable to the
coalition
 Incremental Decision Process Model
• Most of the organization choices are a series of small choices (series
of nibbles) that combine to produce major decisions (big bite). They
move through several decision points and may hit barriers (decision
interrupts). Case of firing of a TV / Radio announcer. Three major
stages have been identified
1. Identification phase (problem flagged by complaints from viewers,
advertisers, colleagues)
2. Development stage (what the organization had done last time or what
is done by other similar organizations)
3. Selection phase (make a choice from available options; in case of
difference of opinion bargaining takes place and may have to take
recourse to Carnegie model)
Finally the decision needs to be authorized by the competent authority
(The case of evolution of Mach III Turbo blades by Gillette)
 Garbage Can Model
• It deals with the pattern or flow of multiple decisions within the organization
that experience extremely high uncertainty about growth and change. Such a
state is called “Organized Anarchy” and are not guided by the vertical
hierarchy but by the following factors:
1.Problem preferences (goals, problems, alternatives and ambiguity at every
stage)
2.Unclear or poorly understood technology (explicit database that facilitates
decision making not available)
3.Turnover (experiences high attrition and and the past experience brought on
the table is fluid)
• The unique characteristic of this model is that the decision process is not
seen as a sequence of events that begins with a problem and ends with a
solution (problem identification, potential solutions, participants and menu
of options for decision making)
 Consequences of GCM of decision making
1. Solutions may be proposed even when problems do not exist
(an employee may be sold on to some idea may try to sell
this to others eg introduction of computers)
2. Choices are made without solving the problems (people
decide to quit, organization budget is slashed, new policy is
issued; these may be oriented towards a problem but do not
necessarily solve them)
3. Problems may persist without solving them (organization
participants get used to certain kind of problems and give up
trying to solve them or may not have the technology or
wherewithal to solve them)
4. A few problems are solved (the process works in aggregate,
not all problems are solved but the organization moves in the
direction of problem reduction – case of the film
Cassablanca)