Organizational Decision-Making Models Comparison

Subject: Decision Making
Pages: 4
Words: 893
Reading time:
4 min
Study level: College

Introduction

Decision making is a very important process for both individuals and organizations. Decision making is crucial when one is looking for a solution to a given problem. The success of an organization is highly dependent on the ability of managers to make the right decisions (Jones, 2010). However, this is a process that is associated with too many uncertainties. It is not easy to know the outcome of a decision. Several models are applied when making decisions. This essay compares various models of decision making. The paper also evaluates the best models for various types of organizations.

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The rational model of decision making

Under this model, the decision-maker aims at maximizing the outcome of their decision. It is a cognitive process where decisions are made in a logical manner (Jones, 2010). The decision-maker brainstorms and thinks of various alternatives. He then selects the one he feels as the best and with the ability to give the best potential results. The steps involved in decision making are; defining a solution, establishing planning criteria, and then allocating weights to the various criteria in consideration of the possible solutions. Developing the alternatives and then selecting the best option are the next steps. These are followed by the implementation of the solution and then monitoring the progress. Decision making is important since it considers all the possible solutions before selecting the best alternative with the perceived best outcome. However, decision making requires a person with high cognitive ability (Sanderson, 2006).

The Carnegie Model

This is a model of decision making that addresses the realities associated with the decisions. Managers find the best solution that would meet the organizational goals and objectives and overcome the uncertainties and disagreements that may distract the course (Jones, 2010). The three major aspects involved are satisficing, organizational coalitions, and bounded rationality. The model is expensive, and there is little information available. Decisions are made through compromises between organization coalitions.

The Incrementalist Model

Under this model, decisions are made in a stepwise manner. The manager selects only a few options out of the possible solutions (Jones, 2010). The selected solutions are the ones that would only impact small differences in the existing policies. Changes are made at the margin. The model assumes that drastic changes may lead to distrust, and the decision may fail to succeed. However, the model is criticized since it only focuses on the short term conditions, while ignoring the long term issues.

Unstructured model

This is the model of decision making where decision making is done without any prediction of the outcome. Managers only start the decision-making process when they face an obstacle. In this model, there are no rules to manage the decision-making process. Managers make judgments to find out a solution to a certain problem. Unstructured decision making is highly favorable in a fast-changing environment since decisions are made under high uncertainties (Sanderson, 2006).

The Garbage-Can Model

Decision making under this model is highly unstructured. The decision-maker starts with solutions rather than the problem (Jones, 2010). It involves extreme uncertainty in decision making. It is interesting to note that under this model, problems arise once the solutions have been identified. Problems and solutions blend into a garbage can as they compete against each other. This method of decision making is used by global organizations that make high-quality goods and that wish to expand globally. Globalization is associated with high levels of uncertainty.

Models of decision making favorable for various business organizations

The first type of business is a produce warehouse facility in the early phases of the organizational life cycle. The rational decision model is the most favorable. This is a start-up business that requires logical thinking. The decision-maker needs to make decisions that have a little margin of error to ensure the success of the warehouse facility. The manager should consider all the possible outcomes of the decision to secure higher chances of the business.

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The second business model is a retail dry cleaning operation in the growth phase of the organizational life cycle. A business that is in the growth phase requires decisions that will help it in innovation to advance its operations. Such a business aims at meeting its objectives. Therefore, the best decision-making model for the business is the Carnegie Model. Decisions under this model will help the organization overcome any obstacle that might distract it from achieving its goals. The decisions will facilitate its growth and development towards its objectives.

The third type of business is a hospital medical laboratory at a mature or stable phase of the organizational life cycle. This is a business that does not require radical changes since it is already stable and only requires small changes to help it adapt to the changing environment. Therefore, the most favorable decision model for such a business is the incrementalist decision model. Since the business already has its long term objectives and strategies in its mission statement, it only needs small changes in its current strategies.

Conclusion

Managers need to select the best decision model depending on the type of business, stage of growth, and the environment in which the business operates. This reduces the chances of making bad decisions. It is important to note that bad decisions can have negative impacts on business performance. Resultantly, the decision-making process should be done with a lot of caution and expertise.

References

Jones, G. R. (2010). Organizational theory, design, and change (6th ed.). Upper Saddle River, NJ: Prentice Hall.

Sanderson, C. J. (2006). Analytical models for decision making. Maidenhead: Open University Press.