Summary Review Questions Glossary Endnotes
8Decision Making, Power and Politics
bounded rationality Carnegie model coalition incremental decision model intuitive decision making nonprogrammed decisions organizational conflict
organizational decision making organizational politics power programmed decisions rational model of decision making satisficing unstructured model of decision making
W I L L I S , K A S S A N D R A 2 1 6 1 T S
Organizational Theory 8-2
organizational decision making the process of identifying problems or opportunities and finding solutions or courses of action that further the goals of the organization
programmed decisions decisions made on a routine, repetitive basis that are addressed by company policy and procedures
nonprogrammed decisions decisions that involve nonroutine, out-of-the ordinary situations and are generally not covered by existing policy or procedure
This book has emphasized the importance of strategically managing organizations, whether they are operating in the for-profit sector or the not-for-profit sector. The challenge of competitive forces, discussed in chapter 2 on strategy, is reaching a zenith. This fact particularly impacts the first topic of this chapter, which is decision making. Because competition for resources and customers has reached the hypercompetitive level, decisions by organizations must be made quickly and accurately.
8-1 Decision Making in Organizations Why do organizations make decisions? Primarily, decisions are required because organizations represent the merger of people, systems, and technology. Such a complicated conflagration inevitably leads to problems that beg solving or creates opportunities that need courses of action. Hence, organizational decision making is the process of identifying problems or opportunities and finding solutions or courses of action that further the goals of the organization.
When firms are small, such as those usually found in the existence stage of the organizational life cycle, all important decisions and most minor decisions are made by one person or a small group of people. However, as organizations add capacity to produce, employees, and markets, the need for decision making increases exponentially. Modern organizations are pushing this decision making responsibility to the lowest possible levels to increase speed and efficiency. This concept, known as empowerment, puts the responsibility for solving a problem or acting on an opportunity in the hands of those closest to the situation.1