Decision Making

Decision making is a complex process that can be seen to involve many different stages or events before an actual decision is made. Essentially, decision making is concerned with the processing of generating options and then choosing among them. Decisions in organizations can be divided into various groups, and each decision has various phases. For instance: operational decisions, usually with short-term effects and of a routine nature; tactical decisions, usually with medium-term effects and of a nonroutine nature; strategic decisions, usually with long-term effects concerning the organization's goals.

Moreover, decisions can be classified into various types. Many are routine, with considerable guidance available on how and what to do, given company policy and prior history. These may be considered well structured and they are called programmed in the sense that organizations have a program to deal with them. Other decisions have to be more creative because they are made about phenomena that are new or where there is a limited amount of data or experience to go on. These may be considered ill structured or unique and they are called nonprogrammed.

There is strong evidence among traditional theories of a polarization between unitary and pluralist approaches to decision making. Unitary approaches to decision making posit a general agreement about goals and the best means to achieve them. Pluralist approaches to decision making emphasize conflict and power struggles between individual coalitions in organizations in circumstances in which participants have substantial knowledge and information. The basis of most of the traditional models of decision making is choice. Decision making in this approach can be defined as a response to a situation requiring a choice.

Models

There are various models of decision making with different assumptions about aspects of decision making, such as the preference and goals of participants; the types of conditions with which different styles and processes of decision making are associated; the nature of power and authority implicit in them; expected results and outcomes; and the underlying values, beliefs, and dominant rationale. Under the rational model of decision making, the assumption is made that participants have agreed in advance that making a decision is the right process to follow and that the rules and language of decision making are understood by all. The rational model aims at making optimal decisions on the basis of a careful evaluation of alternative courses of action. The model views the decision-making process as a sequential series of activities leading from an initial recognition of a problem, through the delineation and evaluation of alternative courses of action, and the selection of the preferred alternative to the implementation of action.

The administrative model of decision making is based on the actual behavior of decision makers, proposing that organizational decision making is a product of bounded rationality. This model recognizes the influence of nonrational, emotional, and unconscious elements in human thinking and behavior on suboptimal efforts to reach decisions and the existence of group pressures that limit the appearance of optimizing behaviors as well as the limited availability of perfect information and time and cost considerations attached to information gathering and evaluation. Thus, decision making leads to a satisfying rather than a rational decision, which broadly satisfies the parameters of a problem rather than searching for an ideal or optimal solution.

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