“Unstructured” Decision Making

Fundamentals

Decisions are a primary responsibility of management. And the higher up managers are in the organizational hierarchy, the weightier, strategic, and far reaching are their decisions. One of the earliest dissections of decision making applied specifically to management was offered by Peter Drucker in the 1950s. He submitted that managerial decision making generally involves five general phases: definition of the problem, analysis of the problem, development of possible solutions, selection of a perceived best solution, and translation of the decision into action. But, Drucker cautioned, the entire process and its results can be thrown off because what is often identified as the problem is actually a symptom rather than the underlying issue. He also advised that, among other things, even the most prepared managers are likely to face realities in which making the right decisions is less dependent on accumulated experience than on systematic analysis. Taken to an extension, this suggests that strategic decisions are, by and large, unstructured.

Within the next 20 years, an increasing amount of research focused on managerial decision making, including a portion dedicated to the concept that strategic decisions are, by nature, generally unstructured. In a study led by Henry Mintzberg, researchers analyzed 25 strategic decision-making processes in organizations and proposed that a framework does exist for unstructured decision making. Unlike in structured decision environments, in which an alternative is given, but its consequences are not definitive, unstructured decision environments involve conditions in which neither an alternative nor its consequences are easily established. Put another way, there is a distinction between uncertainty and ambiguity, with unstructured decisions falling into the latter category, distinguished by their unconventional and changing conditions, intricate steps, indeterminable boundaries for factors such as time, pressures both internal and external, and how little is understood at the outset about the situation and its possible solutions.

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