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Decision making is the process of making the choice by one person or more by negotiations which may differ in their perspectives and reach to the various alternatives.
We are studying decision making for many reasons, because organizational actions are based on these decisions they also show how organizations think.
I think the decision taken in the organization may lead the organization to be the best or the worst, I am working now in a holding company that consist of several companies, one of these companies specializes in media and communications which own a weekly newspaper and radio station, because we are talking about decision making I will represent some decisions which affected my work.
Variables can affect on organizational goals, expectations, and choice to make and analyze decision making. There are 3 changeable categories for decision-making
First Organizational goals which are concerned with values and objectives and how they are approved, my company's goals try to represent the best media for readers and audience and know what programs are important more than others; in spite of some changes that occurred when the top management changed. Before three months our newspaper addressed all levels of the society, now we just speak with the economists because we have now an economist chief editor, the goals of the organization were changed and the performance of our organization were changed too.
Second, Organization expectations which is concerned with information availability, how to search for it or analyze it, our expectation was to be from one of the three biggest newspapers within two years, after two years we found ourselves that we didn't have the right information which may lead us to success. Some times expectations are effected by hopes, for example when the economy is doing better our expectation is that we will have a share from that improvement and this may affect our organizational goals. From the most important things which affect the success of the goals and expectations that is studying the capabilities of achieving goals and the amount of organizational slack. The nature of the problem involve searching in particular direction effected by the direction of search.
The third Organizational choice which is concerned with how and on what basis choices are made, our choice were to reduce the number of issues which are printed because we need to minimize the cost and find the alternatives which may increase the revenue of our newspaper and radio. This decision came from our experience and the way we think to find the alternatives.
We have four major relational concepts which represent the Cyert and March theory of decision making that are
2. Uncertainty avoidance
3. Problemistic search
4. Organizational learning
These concepts affect how the previous variables (goals, expectations and choice) are structured.
Goals as independent constraints. These constraints may include non- essential demands, sporadic demands, non-operational demands and essential demand. Each one has its importance.
Local Rationality is the tendency for the individuals to allocate sub-units to deal with a limited set of problems and a limited set of goals each department has a responsibility to solve its problem, sales department solve sales problems. Acceptable-level Decision Rules are acceptable to all interests rather than being the best in general.
Sequential Attention to Goals, The organization attend to different goals at different times.
Organizations avoid uncertainty by solving problems one by one as they come up, without planning for long strategies which call Feedback-React Decision Procedures, and having some predictions about the behavior of the internal and external environments by presuming plans, standards and uncertainty-absorbing contract on the environment.these Negotiated Environment can solve the problems. You have to solve your problems one by one, if you dont you will face many problems that cannot be solved.
Problemistic search one of the issues which lead to decision making, Search is problem directed, just like decision-making. Having motivated search: As organizations fail to achieve its goals, or failure is anticipated in the near future, the search for these problems will continue. Having Simple-Minded search: searching for causes of a problem near its effect as a solution will be found there. Having biased search: reflecting special training, interaction of hopes and expectations, and unsolved communication conflicts.
Organizations do learn and adapt their goals, attention rules, and search rules.
There is three different phases of the decision process.
a. Adaptation of Goals:
Goals are a function of:
Past period goals, Experience related to these past goals, Experience of comparable organizations to goals dimension during this previous period.
b. Adaptation in attention Rules:
Organizations develop instruments to measure goal achievement, but they change their indices over time. Organizations pay attention to some parts of comparative environment and ignore other parts, but this changes over time.
c. Adaptation in search Rules:
In search for solutions past positive and negative solutions will change the search remodel rules.
We have many reasons which effect the decision making process as I mentioned above, one of these reasons is the increasing complexity in modern organizations, there is a need to take some decisions to organize the organization processes which help running in business like using information technology which lead the organization to differentiate and integrate.
Competition is very important problem which face any organization, to deal with this problem you have to study the situation of the market and take the suitable decision which depends on the right information, on good planning and good strategy that lead to minimize the cost and maximize the profit.
The characteristics of managerial rationality in decision making are predetermined criteria, neo-classical economics which means maximize rewards, minimize costs, impersonal and unemotional, objectives linear logic, information based-full certainty is achievable and rational.
The essential theory in decision making is the rationality theory, the organization work to increase the profit and achieve the best success, the decision makers have to take their decisions step by step which go in the same direction so I think its difficult to say there is an ideal decision making, when the decision maker needs to solve a problem he must have the different solutions and must evaluate all alternatives and compare these alternatives with the criteria and evaluate them and then make the decision.
As I mentioned managerial rationality has a predetermined criteria to achieve the best profit and minimize the cost.
Zey says that the invisible hands play an important role in the market, all the decision makers' work together to implement specific policy which leads the market to running in particular way without any interference from the government or any groups or individuals. For example what is happening in the Jordan market now, the diary producers met and decided they will not decrease the prices and the government cant force them to decrease these prices.
Simon criticize the rationality and claim there is a complexity which face the organizations which makes rationality decision making unrealistic and says the decisions which taken may be built on un current information and do not represent reality and there is no agreement on particular criteria and he mentioned that to reach to the better choice you have to collect the information's from many resources which is costly and there is no time to study these information and then you have to take one or two without studying these choices and so the decision making process un efficient and un accurate and these consciences not ideal and this related to partial rationality.
Bounded rationality is a limited and constrained process. We can collect information which is suitable to our situation, this information may not be accurate one hundred percent but its suitable for us. We can make the best use of the available information that best serve the organization's goals and required outcome.
In Simon's opinion there are two types of decisions:
Programmed decisions: that are taken and dealt with by lower management, as it would deal with simple and non complex situations.
Non-programmed decisions: Are more complex and new unfamiliar decisions to be dealt with and are taken care of by higher management, for its challenging and hard situation to be dealt with.
In the end I think there is no ideal rational decision making process, because we cannot possibly collect all right information to solve an organizational problem or to be used in decision making process, as it would be time consuming and would need an unlimited and enormous amount of effort that will never be enough or complete.
I think we can only make use of previous experiences and try our best to avoid repeating old mistakes and learn from them and enhance and raise our goals and standards.
Because resources, values and capabilities differ from one person to another or lets say from one decision maker to another.