Search in the document preview
Organization Theory and Design - MGT504 VU
© Copyright Virtual University of Pakistan 121
Lecture 37 INCREMENTAL DECISION PROCESS MODEL
Henry Mintzberg and his associates at McGill University in Montreal approached organizational decision making from a different perspective. They identified twenty – five decisions made in organizations and traced the events associated with these decisions from beginning to end. Their research identified each step in the decision sequence. This approach to decisions making, called the incremental decision process model, places less emphasis on the political and social factors described in the Carnegie model, but tells more about the structured sequence of activities undertaken from the discovery of a problem to its solution. Sample decisions in Mintzberg’s research included choosing which jet aircraft to acquire for a regional airline, developing a new supper club, developing a new container terminal in a harbor, identifying a new market for a deodorant, installing a controversial new medical treatment in a hospital and firing a star announcer. The scope and importance of these decisions are revealed in the length of time taken to complete them. Most of these decisions took more than a year, and one – third of them took more than two years, most of these decisions were non- programmed and required custom – designed solutions. One discovery from this research is that major organization choices are usually a series of small choices that combine to produce the major decision. Thus, many organizational decisions are a series of nibbles rather than a big bite. Organization moves through several decision points and may hit barriers along the way. Mintzberg called these barriers decision interrupts. An interrupt may mean an organization has to cycle back through a previous decision and try something new. Decision loops or cycles are one way the organization learns which alternatives will work. The ultimate solution may be very different from what was initially anticipated. Identification Phase: the identification phase begins with recognition. Recognition means one or more managers become aware of a problem and the need to make a decision. Recognition is usually stimulated by a problem or an opportunity. A problem exist when elements in the external environment change or when internal performance is perceived to be below standard. In the case of firing a radio announcer, comments about the announcer came from listeners, other announcers, and advertisers. Managers interpreted these cues until a pattern emerged that indicated a problem had to be dealt with. The second step is diagnosis, which is where more information is gathered if needed to define the problem situation. Diagnosis may be systematic or informal, depending upon the severity of the problem. Severe problems do not have time for extensive diagnosis; the response must be immediate. Mild problems are usually diagnosed in a more systematic manner. Development Phase: The development phase is when a solution is shaped to solve the problem defined in the identification phase. The development of a solution takes one of two directions. First, search procedures may be used to seek out alternatives within the organizations repertoire of solutions. For example, in the case of firing a star announcer, managers asked what the radio station had done the last time an announcer had to be let go. To conduct the search, organization participants may look into their own memories, talk to other managers, or examine the formal procedures of the organization. The second direction of development is to design a custom solution. This happens when the problem is novel so that previous experience has no value. Mintzberg found that in these cases, key decision makers have only a vague idea of the ideal solution. Gradually, through a trial – and – error process, a custom-designed alternative will emerge. Development of the solution is a grouping, incremental procedure, building a solution brick by brick. Selection Phase: This selection phase is when the solution is chosen. This phase is not always a matter of making a clear choice among alternatives. In the case of custom-made solution, selection is more an evolution of the single alternative that seems feasible. Evolution and choice may be accomplished in three ways. The judgment form of selection is used when a final choice falls upon a single decision maker, and the choice involves judgment based upon experience. In analysis, alternatives are evaluated on a more systematic basis, such as with management science techniques. Mintzberg found that most decisions did not involve systematic analysis and evaluation of alternatives. Bargaining occurs when selection involves a group of decision makers. Each decision maker may have a different stake in the outcome, so conflict emerges. Discussion and bargaining occur until a coalition is formed, a in the Carnegie model described earlier. docsity.com
Organization Theory and Design - MGT504 VU
© Copyright Virtual University of Pakistan 122
When a decision is formally accepted by the organization, authorization takes place. The decision may be passed up the hierarchy to the responsible hierarchical fewer cartridges (interrupt) the bard eventually made the decision to continue with the new blades. Which would have a blue indicator strip that would fade to white and signal when it’s time for a new cartridge, the board gave final approval for production of the March 3 to begin in the fail of 1997. The new razor was introduced in the summer of 1998 and began smoothly sliding off shelves Gillette expects to recover its huge investment in record time. Now Gillette is starting the process of searching for the next shaving breakthrough all over again, using new technology that can examine a razor bale at the atomic level and high – speed video that can capture the act of cutting a single whisker, the company will move ahead in increments to create its next major shaving product, projected for release in 2006. At Gillette, the identification phase occurred because executives were aware of the need for a new razor and became alert to the idea of using three blades to produce a closer shave. The development phase was characterized by the trial – and – error custom design leading to the Mach3. During the selection phase, certain approaches were found unacceptable, causing Gillette to cycle back and redesign the razor, including using thinner, stronger blades. Advancing once again to the selection phase, the Mach3 passed the judgment of top executives and board members, and manufacturing and marketing budgets were quickly authorized. This decision took more than a decade, finally reaching completion in the summer of 1998. THE LEARNING ORGANIZATION Rapidly changing business environment is creating grater uncertainty for decision makers; organizations that are particularly affected by this trend include internet-based companies as well as those companies shifting to the learning organization concept. These organizations are marked by a tremendous amount of uncertainty at both the problem identification and problem solution stages. Two approaches to decision making have evolved to help managers cope with this uncertainty and complexity. One approach is to combine the Carnegie and incremental process models just described. The sound is a unique approach called the garbage can model. COMBINING THE INCREMENTAL PROCESS AND CARNEGIE MODELS The Carnegie description of coalition building is especially relevant for the problem identification stage. When issues are ambiguous, or if managers disagree about problem severity, discussion, negotiation, and coalition building are needed. Once agreement is reached about the problem to be tackled, the organization can move toward a solution. The incremental process model tends to emphasize the steps used to reach a solution. After managers agree on a problem, the step – by – step process is a way of trying various solutions to see what will work. When problem solution is unclear, a trial – and error solution may be designed. The two models do not disagree with one another. They describe how organizations make decision when either problem identification or solution is uncertain. When both parts of the decision process are highly uncertain simultaneously, which is often the case in learning organizations, the organization is in an extremely difficult position. Decision processes in that situation may be a combination of Carnegie and incremental process models, and this combination may evolve into a situation described in the garbage can model.