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Topic 2. Methodological approaches to decision making

4. The political model5. The garbage can model6. The use of systems theory in decision making

7. The decision making process and its basic steps.

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4. The political model

The political model takes into account the influence of organizational politics on decision making. This concept of decision making as a political process emphasizes the natural multiplicity of goals, values, and interests in a complex environment.

The model was introduced in the book A Behavioral Theory of the Firm (1963) by Richard M. Cyert[1] and James G. March[2]. The Cyert and March’s book helps to illustrate how political factors and power can affect the way decisions are made. Contrary to the economic theory of the firm, which sees firms as profit-maximizing entities, the authors advocate a theory based on empirical observation of actual firm decision-making.

Cyert and March argued that the firm is, in fact, a coalition of participants with disparate demands, changing foci of attention, and limited ability to attend to all organizational problems simultaneously.

Similarly, Lee G. Bolman and Terrence E. Deal (“Modern Approaches to Understanding and Managing Organization”, 1984), characterize organizations as "alive and screaming political arenas that house a complex variety of individuals and interest groups." According to Bolman and Deal, the political model assumes that 1) organizations are coalitions composed of a number of individuals and interest groups (stakeholders); 2) individuals and interest groups differ in their values, preferences, beliefs, information, and perceptions of reality;3) most of the important decisions in an organization involve the allocation of scarce resources; 4) organization goals and decisions emerge from ongoing process of bargaining ), negotiation among individuals and groups,5) because of scarce resources and enduring differences, power and conflict are central to organizational life. Because an organization is viewed as a coalition of diverse interests, organizations are seen as having multiple, conflicting goals which change as the balance of power changes. Unlike in the previous models, power is decentralized. Political decision making is triggered when stakeholders hold divergent views about problem definitions, desired goals, and/or preferred solutions. In this model, outcomes or decisions are the result of bargaining behavior. Individuals and interest groups enter into bargaining situations in an effort to influence goals and decision making in the system. The organizational structures which exist may distribute advantages and disadvantages to each group. In addition, resources are assumed to be scarce and participants come into conflict as they seek to maximize their own interests and resources.

Thus, in the political model, decisions are the result of bargaining and compromise by participants rather than rational analysis of a problem. When preferences among participants conflict, power determines the outcomes of the decision making process. The political model views decision making as a process of conflict resolution and consensus building and decisions as products of compromise.



The political model emphasizes the impact of multiple stakeholders who have the power to make decisions.

In the political model, participants are interdependent. They react to the actions of others and take other participants into account as they plan their own strategies. Managers have to assess power throughout the organization as it is imperative that they accurately diagnose power to use bargaining strategies, such as coalition building, successfully. Some departments or individuals may be more powerful than others. One way to illustrate this is to consider some of the sources which may give people or departments power. • expertise someone who is an expert in certain area may be able to influence decisions because of his knowledge and capabilities. • control of information — some people or departments may be able to control the flow of information • position in the organization — some individuals may be powerful because of their position in the organization and this may enable them to influence both what decisions are made and how these decisions are made. Factors like these mean that the steps of the rational decision making model will not be followed exactly. An expert may, for instance, have considerable influence in the evaluation of options so that the one which s/he favors is chosen. Others who lack this expertise may be unable to challenge the arguments put forward by the expert.Power and politics may have an impact on a manager’s approach to decision making. The most likely effect is that the manager may have to take into account his own position and power, and that of others, when making decisions. The manager may, for example, have to make a different decision from the one he would like to make because others have the power to oppose his preferred course of action.

Information plays an important part in the decision-making process. Some goals or the means used to achieve them may be perceived as win-lose situations; that is, my gain is your loss, and your gain is my loss. In such a situation, stakeholders often distort and selectively withhold information to promote their own interests. Such actions can severely limit the ability to make adaptive and innovative decisions, which by definition, require utilizing all relevant information, as well as exploring a full range of alternative solutions.

Stakeholders within the organization often view information as a major source of power and use it accordingly. The rational decision-making model calls for all employees to present all relevant information openly. However, managers and employees operating under the political model would view free disclosure ) as naïve, making achievement of their personal, team, or departmental goals more difficult. To complicate the picture, information often is (1) piecemeal and based on informal communication (Did you know that…?); (2) subjective rather than based on hard facts (This new employee is probably a relative of some powerful person because he has already got the promotion); and (3) defined by what powerful stakeholders consider to be important (What does the boss think? or How will the board respond?).

Finally, the political model predicts that, if an issue is perceived to be important, then participants will use bargaining tactics, strategies, and coalition building techniques as they try to reach their own objectives within the organization. Negotiation and compromise are likely to occur as participants seek to keep the game of decision making progressing toward a resolution. The issue is resolved at the point that participants agree to accept the decision. However, this may not be a final solution. Because there may be winners and losers in the process, participants who lose in one decision may return to fight the issue in another one. In the political model, decisions can be reconsidered if participants choose to continue to pursue the issue.

Co-optation is one of the common political strategies used by stakeholders to achieve their goals. Co-optation refers to bringing stakeholder representatives into the strategic decision-making process as a way to avert threats to an organization’s stability or existence.

In summary, the political model views the decision-making process as a bargaining game where individuals pursue their own interests within the organization, but do so by taking others into account. Conflict is legitimate as individuals have different objectives and different amounts of power to pursue their goals. Participants’ behavior is purposeful. The organization, however, may not appear as such because participants simultaneously pursue multiple, conflicting goals.The political model is primarily descriptive and does not provide clear signals for improving the decision making process. 5. The garbage can model Garbage can model returns to the idea that the logical framework of the rational model does not describe what actually happens in practice. It argues that many organizations are complex and that even those involved in them may not fully understand how all the various processes work and how they relate to each other. There is often a great deal of uncertainty and ambiguity in what happens in the organization.

The Garbage can model was proposed by Michael D. Cohen (James G. March, and Johan P. Olsen in 1972 (A Garbage Can Model of Organizational Choice Administrative Science Quarterly, Vol. 17, No. 1. (Mar.1972,), pp. 1-25.)

The model was developed to explain the way decision-making takes place in organizations that experience high levels of uncertainty, what is described as organized anarchy Organized anarchies are characterized by three general properties: 1) Problematic preferences The organization is operated on the basis of a variety of inconsistent and ill-defined preferences. It can be described better as a loose collection of ideas than as a coherent structure; it discovers preferences through action more than it acts on the basis of preferences. 2) Unclear technology Although the organization manages to survive and even produce, its own processes are not understood by its members. It operates on the basis of simple trial-and-error procedures. 3) Fluid participation Participants vary in the amount of time and effort they devote to different activities and problems; involvement varies from one time to another. As a result, the boundaries of the organization are uncertain and changing in terms of organizational members; the audiences and decision makers for any particular kind of problem change.

The garbage can model does not see the decision-making process as a sequence of steps that begins with a problem and ends with a solution. The theoretical breakthrough of the garbage can model is that it disconnects problems, solutions and decision makers from each other, unlike traditional decision theory. Specific decisions do not follow an orderly process from problem to solution, but they result from an interaction between four independent streams problems, solutions, participants, and choice opportunities. The organization is a “garbage can” where these streams are mixed.

1. Problems require attention, they are the result of performance gaps. Problems may originate inside or outside the organization.

2. Solutions have a life on their own. They are distinct from problems which they might be called on to solve. Solutions are answers looking for a question. Participants may have ideas for solutions; they may be attracted to specific solutions and advocate them.

3. Choice opportunities are occasions when organizations are expected or think they are expected) to produce behavior that can be called a decision. Opportunities for choice arise regularly and any organization has ways of declaring an occasion for choice. Contracts must be signed; people hired, promoted, or fired; money spent; and responsibilities allocated.

4. Participants come and go; participation varies across problems and solutions. Participation may vary depending on time constraints. Participants may have favorite problems or favorite solutions.

Problems appear in various parts of the organization and then disappear without being resolved. Managers spend time making decisions that are not implemented. Participants drop in and out of the decision-making process. Furthermore, the amount of resources in the organization affects the number of decision-making opportunities. When there are excess resources, managers can create enough decision-making opportunities to satisfy everyone who wants to participate in the decision-making process. When resources are scarce, not all demands will be met. Another way to understand the implications of this model is to start by thinking of one problem requiring a decision. Possible solutions may be identified but before anything can be done, something else may happen. A new problem situation requiring a decision has arisen and nothing is done about the original decision. However, the solutions suggested for the original problem do not disappear and remain as possible courses of action which could be taken, although not perhaps for some time. The problem itself may also remain.

If you imagine that many situations like this are taking place at any one time, there will be a constant flow of solutions, problems and participants. They can be seen as flowing into a sort of organizational garbage can. Every now and then some clusters of these elements coincide, and a decision is produced.

Perhaps the best example is the solution looking for a problem. Organizations tend to produce many “solutions” which are discarded due to a lack of appropriate problems. It may be that the solution is not suitable in this particular case but it could be. It may hang around for a while until a situation arises when those in favor of the solution see a chance to get it accepted. In the garbage can model, decisions are determined by the timing of events or by chance. In summary, the garbage can model captures the complex environment that surrounds organizational decision making. Both the political model and the garbage can model belong to descriptive models. 6. The use of systems theory in decision making

Decision making in modern organizations should be based on the systems approach to organizations and management. Organizations for which decisions are made are viewed as systems.

A system is a collection of interacting, interrelated, or interdependent parts forming a complex whole that is intended to perform a certain function or serve a goal. The notion of hierarchy of systems reflects the fact that systems have a certain hierarchical structure, i.e. are composed of subsystems and are subsystems themselves in relation to some larger system.

Systems are surrounded by an environment, from which they are separated by a boundary. When studying systems, a researcher defines the boundaries of a system arbitrarily, depending of the tasks of the study and in order to simplify analysis.

Closed systems are considered to be isolated from environmental influences whereas open systems exchange information, substance, or energy with the environment.

The basic components of a system are inputs (what enters the system from the outside), outputs (what is supplied by the system to the environment), processes (which are used to transform inputs into outputs), which together, accomplish the overall desired goal for the system.

The flow of information to the decision maker concerning the system’s output is called feedback. Based on this information, the decision maker can modify inputs or processes or both (Figure 1).

Inputs Resources Costs
Processes Procedures Tools Activities
Outputs Performance Finished products
Decision Maker
Environment
Feedback

Figure 1. The system and its environment

 

According to systems approach, a decision made in one segment of the organization may have a significant effect not only on the operation of that particular segment, but on the operation of other segments as well. Thus, decisions made in an organization must be consistent, do not contradict each other, and correspond to overall organizational goals.

Using systems approach is helpful at all stages of decision making process. For example, to define a problem, one should use systems view of organization which implies consideration of a great number of internal and external factors, and understanding their interdependence helps a decision maker to identify underlying causes of the problem. Systems approach helps in the consideration of possible outcomes of different alternatives. As modern organizations are viewed as open systems, which both affect and are affected by the environment, organizational decisions must take into account these two-way influences as additional limitations imposed on the range of decision alternatives and criteria for selecting alternatives. For example, in the process of making strategic decisions which will have long term effects and will determine the organization’s future, the management of the organization should take into account not only organizational internal interests, such as profit maximization, but also interests of different groups of stakeholders.

 


Date: 2015-01-29; view: 695


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