Decision Making Models
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Organizational decision making is a process that transpires particularly if value creation for the stakeholders is part of the problem solving solution. There are a series of decisions that are made by manager, some of which including both programmed and non-programmed decisions. Decisions that are developed through the norms, rules and the organization’s operating procedures is referred to as programmed decisions while the non-programmed decisions are those that are not managed by any organizational rules, are new and are not structured. In order to solve the organizational problems that occur, managers use their personal intuition and judgment whenever the aim at solving the problems. The efficiency of the organization is increased and its costs reduced through the use of programmed decisions while non-programmed decisions play an important role when it comes to managing and adapting the ever changing environment.
There are two broad categories of decision making models. These are the traditional models which illustrate the process of decision making as a rational process while the newer models illustrate decision making as inherently uncertain. The rational model process recommends that there are three stages involved in decision making process. The first step entails the identification of the problem where the environment is analyzed, and the threats and opportunities are recognized. The second step involves the generation of alternatives where opportunities and threats are responded to through the skills analyzed by the managers. The third step in the rational model involves the selection of the best solution by the managers particularly if uncertainty does not exist. The rational model assumption is described as rather unrealistic because managers do not necessarily have the ability of making the right decision and in the process maximize the stakeholder’s value.
The more recent models involve the Carnegie model satisficing where the managers determine evaluation criteria for the solution as well as the limiting the alternative range. The advantages of the processes involved in this model is that it is less costly and involves less work when compared to the detailed searching that is accompanied by the bounded rationality. The managers are not restricted in this model and their ability to process information is not limited. The Carnegie model on the other hand involves several disadvantages which include the managers not having sufficient information on all possible organizational alternatives that are involved. The dominant coalition also must be approved by the dominant coalition and changes overtime due to a change in the interest rates and in turn influence the change decision making. It is more accurate than the rational model since goals are met by the good solution got by the managers.
The second model on the recent categories is the Incrementalist Model. This model suggests that in order to reduce risks, managers are bound to choose actions that are close to the past. The advantage with this model is that it gives managers the avenue of avoiding and correcting mistakes. This is made possible by simply preventing the evaluation of all the alternatives before selecting the appropriate one by the making of an incremental changes sequence. The main disadvantage with this model is that managers can mistakenly choose to use actions that can not bring the expected results. This model is also only suitable for stable environments but its responses turns out to be slower in a dynamic environment and hence results to organizational decline.
The third model of the recent categories of organizational decision making process is the unstructured model. This model was developed by Henry Mintzberg and involves making of organizational decisions under very high circumstances of uncertainty. Before the making of a major decision, there is a series of little steps that is followed. The first step involved in this model is the stage of identification where routines for recognition of problems are developed by the managers. The second step in this model is the development stage where problem solving alternatives are developed by the managers. The third and the last step in this model is the selection stage. In this stage, the strength of this model is clearly depicted since decisions are made by the manager through the use of intuition, judgment, and formal analysis.
The unstructured decision models and is very involving since it requires alternatives of rethinking in the face of obstacles and starting every bit of the process from scratch. The weakness of this model is that the process of making decisions develops in a rather an unpredictable approach. If at all the changing situations are to be responded to, there is great need for the manager to use intuition which generally requires the continuous adaptation. Non-programmed decisions are apparently made by the unstructured model while the programmed decisions happen to be made by the incrementalist model.
The most appropriate of the three principal models of the public sector organizational decision making is the Carnegie model. This is because it happens to be less costly and coincidentally involves less work. It also favors the managers as it does not restrict them or limit their ability to process information. This model favors the decisions made under it since it reduces the cases of uncertainty and consequently reduce any chances of failure of the decisions made under it. There is a great possibility of the survival and prosperity of the companies using this model since it promotes the making of the right decisions. It advocates for the learning of new behaviors and doing away with the past and inefficient behaviors thus leads to making of good decisions. Better non-programmed decisions are thus made by the managers through the great assistance by organizational learning.
The better understanding of the public sector organizational decision making models and processes is very essential for the success of any organization. Through such understanding organizational effectiveness is enhanced. The organizations that uses the most appropriate of the three principal models gets an upper hand compared to other competitors and hence dominate the market.
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