ÖRGÜT KURAMI VE TASARIMI

The decision-making process generally involves a number of aspects such as being active, giving importance to communication and information flow, relying on foresight, having a plan, generating alternative expenses, and incorporating a problem-solving process. The process becomes more complicated when it transforms from individual decision-making into organizational decision-making.

Managerial decision-making is a matter of finding solutions or action plans for problems and providing the maximum benefit for organizational stakeholders. This problem may involve finding the best inputs, offering the best service, or designing the best production process. It may sometimes involve choosing the right move against competitors or offering a solution to a threat to the environment.

Programmed decision-making involves the most efficient and easily repeatable routine operations. Thus, constant value creation processes of the organization can be effectively managed. In general, this decision-making mechanism includes a set of written rules and standards that enable the organization to operate in the most efficient manner. Organizations arrange boards, policies and detailed procedures for decisions to be taken in such repetitive situations. This type of solution eliminates a very time-consuming process of identifying and evaluating alternatives and making new decisions. Managers, thus, have the opportunity to devote their time to solving more complex problems. In such pre-programmed decisions about a range of actions, it is mainly certain at the decision stage which actions to take, which persons to include, which resources and means to use, and which outcomes to be achieved.

Non-programmed decision-making includes the most creative, original and unstructured decisions by which managers help organizations to produce solutions to changing and uncertain situations.2 Such decisions cannot be made in advance. No rule, procedure or written norms alone are sufficient to pre-determine how to make these decisions. Every situation, problem or solution is unique and emerges at its own particular time. There is a need for more comprehensive information to make such decisions. Greater coordination between departments of the organization is expected. There is also greater cooperation between departments. It is often impossible to know whether such decisions are correct. Managers make such decisions on the basis of their past experience and predictions. Therefore, this decision-making process is a process that requires managers to make decisions by relying on their intuition and creativity.

Under the rational approach to decision-making, decisions are generally made based on the quantitative data through a linear process. These models are quantitative and normative and tend to observe, identify, explain and predict choices3. They involve the logical completion of the stages including the identification and systematic analysis of the problem, right choice, and implementation. An important number of decisions made by managers in a day include repetitive decisions. Well-designed rational decision-making processes, especially in such decision-making activities, enable managers to engage in effective management. If this process is written and made accessible to everyone, it is turned into an important tool for others who deal with similar problems.

Herbert Alexander Simon is the founder and the most prominent name of the rational decision-making approach. However, some sources also refer to Chester Barnard, one of the most prominent figures in the behavioral school, as the pioneer of decision-making theory.

Step 6. Select a decision-making tool: There are various tools to solve a decision problem. Choosing the most suitable tool is an easy task. Which tool is the most appropriate depends on the goal of decision-maker and the nature of the problem. The simplest method is often the best solution; however, it may sometimes be necessary to choose a more complicated method depending on the nature of the problem that needs to be solved. Decision-making tools include many analysis techniques such as brainstorming, pros and cons analysis, Kepner/Trego decision analysis, force field analysis, analytical hierarchy process, and multi-attribute utility theory analysis. Which method to use is influenced by many factors ranging from the number of goals and requirements to the nature of the decision. Most decisions can be made using simpler techniques. In our example, the decision maker can use a simple comparison technique to exclude inappropriate software programs.

Decision-makers do not have all information, which makes a complete evaluation impossible. This is called bounded rationality. Bounded rationality is based on the principle of sufficient satisfaction. When managers find a solution as good as they can, they accept the solution.

In Carnegie Model:

Cognitive bias means a tendency to make irrational decisions about other people and situations. Cognitive biases are really common since they are produced by human nature. Habits, educational background, experience, business culture and similar components reflect cognitive bias of decision-maker in organizational decisions.

Escalation of commitment means that if you also have proofs that prove the truth of the idea against your own idea, you still insist on the accuracy of your own idea. Although many decisions by top level managers satisfy them, these ideas may not be that much rational. And despite this possibility, they may have the tendency to show an increasing commitment to their previous decision, which can be seen frequently in top level managers’ decision-making process. According to some explanations, the reason of the commitment to these wrong decisions is the denial of first mistaken decision by the manager himself.

Nonprogrammed decisions:

STEP 1 Define problem

STEP 2
Determine the requirements that the solution to the problem must meet

STEP 3
Establish goals that solving the problem should accomplish

STEP 4
Identify alternatives that will solve the problem

STEP 5
Develop evaluation criteria based on the goals

STEP 6
Select a decision-making tool

STEP 7
Apply the tool to select a preferred alternative

STEP 8
Check the answer to make sure it solves the problem

The rational decision-making approach has been criticized and considered to be non-realistic; thus, it has been argued that this approach should be reviewed and made as practical and realistic as possible because the limited capacity of the manager is insufficient to analyze the complexity of business relations in the modern world and to completely clear up problems.

A manager with limited rationality uses mental methods that simplify the solution and provide shortcuts to make decisions and process information. This is called intuitive decision-making.

Personal Constraints:

Desire for prestige, success; personal decision style; and the need to satisfy emotional needs, cope with pressure, maintain self-concept.

Coalition means a consensus of managers’ decisions about organizational goals and privileged problems.

The Garbage Can Model shortly, means “do it before think about it.

Cognitive bias means a tendency to make irrational decisions about other people and situations.