Organizational Decision Making

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Decision making is one of the key aspects of any career, within any organization, and even in everyday life. Peter Drucker, a management guru, said that "a decision is a judgment...a choice between alternatives." The text describes two simple ways in which decisions can be categorized; programmed and nonprogrammed decisions. Programmed decisions are repetitive and routine, and are usually based on a set policy and procedure. Use collegiate athletics as an example of this type of decision making process. The University of Minnesota and the NCAA has a specific policy about hours that a coach can be with a team during the offseason (it is 8 hours per week). If the men's basketball coach breaks this rule, the NCAA and the university simply make a programmed decision based off of the policies and procedures set in place. Nonprogrammed decisions are new and unique decisions, where there are no established guidelines or procedures to direct the process. An example of this type of a decision is the scenario when professional and collegiate teams had to decide what to do about their athletes using Twitter during games. A decision had to be made about an issue that had never been deal with before, and therefore the decision was usually made by senior management.

Slack and Parent discuss three types of conditions under which decisions are made. The three conditions are certainty, risk, and uncertainty. Certainty involves the individual understanding completely the available alternatives and outcomes of each decision, with one-hundred percent certainty. While it would be nice to be able to make the majority of decisions with complete certainty, more likely a manager will deal with conditions of risk. Risk involves a basic understanding of available alternatives, but the potential costs and benefits are uncertain for each option. Finally, uncertainty involves the unknown; the decision alternatives and potential outcomes are relatively unknown. Obviously these are some of the toughest decisions to make and often are make or break.

There are a number of different decision making models, both as an individual and as an organization. Slack and Parent describe two individual decision making models; the rational model and the administrative model. The goal of the rational model is that individuals act in an economically rational manner. The steps to the rational model include 1) Monitor the decision environment, 2) Define the problem about which a decision has to be made, 3) Diagnose the problem, 4) Identify decision alternatives, 5) Analyze alternatives, 6) Select the best alternatives, 7) Implement the alternatives, 8) Evaluate the decision. The administrative model differs with the fact that the key decision-maker has a limited perception, and therefore cannot evaluate all the alternatives or outcomes. Therefore, a limited number of alternatives are selected that reflect the decision-makers' personal preference. In the fast-paced world that the sport industry has become, I believe that the administrative model makes more sense simply because there is always a time constraint on decisions and often times you do not get the luxury of plotting out each alternative.

The text then mentions a few different decision making models from an organizational level. The five major approaches are the management science approach, the Carnegie model, the structuring of unstructured processes approach, the garbage can model, and the Bradford studies. In my personal experience with sport organizations I tend to favor a more structured approach to decision making. When I know how the process of making a key decision will go, I seem to feel more at ease with it. Out of the above-mentioned approached, I most closely identify with the Carnegie Model. I like the idea that organizations are made up of subunits, each with their own specific interests. While making a decision it is important to let each subunit voice their opinion, even if their opinion is not going to be the final say. This idea is similar to what Joel Maturi and Gary Wilson discussed during class a few weeks ago. Joel said that he welcomes coaches to come in and voice their opinion, but at the same time they need to understand that just because they have the freedom to voice their opinion does not mean that Maturi's decision will be influenced. Decision making is one of the most important things that we do on a daily basis, and being confident and educated in the decision-making process will go a long way towards helping a sport manager develop into the best they can be.

Questions: 1) Which of the decision-making approaches in the text do you most closely identify with, and why? 2) How does an individual's ethics and values affect their decision-making processes?

3 Comments

Parker’s comments from Slack and Parent discussing the three types of conditions under which decisions are made are very important when it comes to organizational management. The three conditions as stated are certainty, risk, and uncertainty. Certainty within a decision is always nice to have when you are making critical decisions for your organization. Ever manager dreams of the chance to make decisions based on certainty because it is a slam dunk. Risk will always be a factor in anything you do and using a risk management system with your decision making can help reduce and even eliminate some forms of risk within your management process. Uncertainty can cause issues within an organization when you have to make decisions with an unknown result. This can cause friction throughout the company leading people to believe that their jobs may be lost if the decision is made and fails. In tough economic times, you want to take your chances and risks when you have to, but try to avoid numerous uncertain decisions when it involves your workers jobs.

I agree that all of these aspects that Parker discusses from Slack and Parent are key to making a great decision for the organization. I think that every single one of these aspects must be taken into account when making a decision. Certainty is a great part of a decision, every person making a decision wants to be certain that the decision is right and going to work out in the end. Also, of course the risk is key as well because you need to know what the risk could be for the that certain decision. I agree that risk management is also a great way to look at it because it will reduce and possibly completely eliminate risks in the decision making process. I think that uncertainty also causes risk, so all of theses need to be focused on during the decision making process because each one can lead to risk or uncertainty if not looked at and analyzed properly.

I think Parker's use of the Drucker quote was a great demonstration about how an organization's decision making process can change the course of the organization. After all, any decision is the conscious choice between any number of alternatives. Obviously some choices are easier to understand and easier to make than others. I think in general, the programmed decisions are the easiest ones to make because they're repetitive and predetermined. It's the non-programmed decisions that can create a severe sense of uncertainty within an organization. I think Parker's later discussion on certainty, risk, and uncertainty pairs well with the nature of programmed and non-programmed decisions. Risk is certainly a cause of uncertainty because anytime there's risk there's concern that the risk could damage a part of the organization. Decision making is certainly a process because it takes time to understand the complexity of the decision and what ramifications the decision could hold. I think the process behind a decision is the most important part of any solid decision making process. Successful organizations are the organizations whose leaders take time to consider difficult decisions and the consequences those decisions create. Obviously some decisions have to be made on the spur of the moment but if an organization's leaders understand the situation behind the decision they will make decisions with the organization's best interest in mind.