The Decision Making Process Within Organizations

From perceptions and analysis, we have information available in immediate memory. These are compared and followed up after a choice of alternatives. Decision rules express prescribed courses of action so that one of several outcomes results.

Very often people make decisions which lead to effective actions and then find it impossible to say just what it was that prompted them to decide as they did. Sometimes we find it easy to reach decisions quickly, also often good ones, and yet are unable to describe to someone what we actually did.

One by-product of computer simulation is that it requires the decisions be determined before they can be programmed. This 'pre-thinking' in setting up decisions in advance is in fact what any sophisticated problem solver is doing.

The skilled thinker does not normally require reproducing his mental steps that he goes through in language form. Hence the cues and subtle interpretations of them are lost to later recall. Each of us builds up our own decision rules over a period of time and we modify them from time to time.

As individuals, we survive quite well without spelling out rules of handling information. Organizations must have rules; rules as to who works with what as information come in. For example, information comes to the organization from outside in a wide variety of ways and forms. Salesmen receive orders and information about competitors. Executives read trade journals and formulate conclusions about general conditions in the industry. The Organization has rules for condensing and distributing input information. There are also rules for distributing and condensing internally generated information.

How important is it for the organization to know who gathers information, who analyses it and who disseminates it? It is a question of principles, procedures and discipline. The organization may survive without rules but certainly not efficiently. Likewise, the individual who knows some basic principles and rules related to decision making is more sophisticated than his counterpart who has less knowledge of rules. The handicap of personal decisions vis-à-vis the organizational decisions is that personal decisions relate to the values one holds.

Decision rules express prescribed courses of action. Within an organization, information-handling rules provide for efficient operation. When organizational decisions branch beyond the level of the individual, we may also be influenced in our own personal decisions. As individuals, as well as in organizations, we do systems problem solving. Since making a decision means choosing one of many alternatives, compromise is often involved.