Organisational Change and Decision Making

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Organisational Change and Decision Making
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Factors affecting decision making

• Abstract models do not fully explain decision
  making. It cannot be separated from everything
  else in an organisation. It affects and is
  affected by the context

• Factors associated
• with the individual
• Personality
• Perceptions
• Attitudes to risk
• Ethics values

Decision Process

• Organisational
• Context
• Culture climate
• Politics

• Decision Context
• Nature of decision
• uncertainty

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Scope

• Processes of how we make decisions
• Group
• Individual
• Perception of reaction to problems bounded or
  unbounded
• Pre-, decision post- behaviours
• Certainty uncertainty
• Commitment to failing courses of action
• Factors shaping how decisions conceived,
  formulated implemented
• Pressure
• Politics
• Expertise fuzzy logic
• Information processing for alteratives

• decision making models
• Normative - rational and value based choices.
  Theoretical prescriptions for how decisions
  should be made
• Descriptive - boundaries of rationality - how
  decisions are made in practice

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Definitions
Choosing between alternatives - at the point of
decision? Problem-solving - a broader process?
Intelligence Searching environment for conditions
that call for D-Making
Design Inventing, developing, analysing possible
courses of action
Choice (the decision) Selecting a course of
action from among the alternatives
Prerequisites?

• One of a series of decisions?
• Option testing
• Implementing
• Monitoring

• Conceptualisation of decision making processes
• Three activities Simon (1960)

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Types of decisions

• Simple
• Complex - multidimensional?
• Hard/tangible - soft/fuzzy
• Good - bad (based on value judgements -
  subjective criteria)
• Effectiveness?
• Did the decision match the problem, what was the
  outcome, how satisfied were people about how the
  decision was made?
• Bounded
• More easily defined treated as separate from
  their context
• Unbounded
• Ambiguous, harder to define separate from
  their context

• Bounded or Unbounded?
• Scale
• Implications
• Timing
• Clarity
• Potential solution
• Priorities
• Knowledge
• Discreteness
• People - how many, state of mind

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Decision making models

• Rational Choice Assumptions
• Prescriptive steps of rational detached person
  e.g. economic decision maker who seeks 'optimal
  solution'
• Bounded Rationality (Simon 1957, Janis 1989)
• Constraints limit decision maker capacity to
  process information deal with complex, risky,
  unbounded problems.
• Dust Bin Model (Garbage Can)
• Interaction in streams of events that coincide.
  People react subjectively. Timing of connections,
  choice opportunities power of decision makers
  is significant

Normative - rational choice. Theoretical
prescription for how decisions should be
made Descriptive - boundaries of rationality -
how decisions are made in practice. Objective,
post hoc and subjective
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Decision making models - Rational Choice
Test for causes
Monitor control
Recognise problem explore situation
Define problem
Identify Options
Examine option consequences
Compare Options to criteria for best fit
Plan for implementation contingencies
Set objectives evaluation criteria

• Assumes
• Logical steps for optimal outcome
• Dispassionate, neutral, not political
• Empirical, data and information based
• Risk minimisation

• Criticisms
• Does not explain how many decisions are made in
  practice
• Do I know what I want? What is available?
  Uncertainty. Risk and political balancing.
• Hunches and intuition. Perception and pressure
• Decision maker's own limitations - time, energy,
  processing power. 'Good enough' over optimal.

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Decision making models - Bounded Rationality
(Simon, Janis)

• Assumes
• 'If it ain't broke don't fix it' . Missed
  opportunities inefficiencies accumulate until
• unbounded, complex problems arise need to
  reform
• unclear about what information needed
  criticalities involved
• Time pressures constrain investigation
• Imperatives to 'do something'
• Solutions reliant on experience intuition
• Use of decision 'heuristics'
• Satisficing gt optimisation

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Heuristics

• Bazerman's heuristics 1994
• Availability
• recall similar past decisions to assess
  probability of outcome. Recent decisions are
  vivid, easily recalled.
• Representativeness
• Assume similarity to past events to judge
  likelihood of outcome. Stereotypical reaction
• Anchoring/judgement heuristic
• Take initial position (e.g. based on experience
  or how problem is presented). Accept adjust to
  reach the decision eventually chosen
• See also Allinson et al 1992

• Rules of thumb, simplifying strategies helping
  D-maker to cope with information overload
  (Kahneman Tversky 1973)
• Sources
• past experience (easy ways of evaluating current
  situation)
• subjective rules for information collection
  interpretation
• techniques to reduce activity effort in
  processing information
• Reduces range of solutions that are examined.
• Introduces systematic bias into decisions -
  affecting judgement

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Garbage Can Metaphor (Cohen et al 1972)
Decision making situation - a bin into which
things get dumped until - by chance - they become
connected interact.

• Organisational complexity - no neat steps.
  Disorderly circumstances. Independent event
  streams (PSPCo) coexist and interact in turbulent
  flux
• Problems can exist independently of solutions.
  Existence of a problem (shortfall in performance)
  does not mean solution will be found
• Solutions - answers to problems.
• May exist before a problem is identified (unused
  skills, ideas, methods).
• Can go unidentified until a solution presents
  itself.
• Participants - different priorities, values and
  prior experiences. Subjective reactions
• Choice opportunities - often irregular and
  unpredictable. Times when decision can be made
  but no guarantee (regular meetings to crises)
• Luck, timing open to manipulation, back-burner,
  agenda making, volume sensitive, power holders
  create chance opportunities

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Post-decision behaviour

• Rational model stages implementation monitoring
• D-maker so committed to solution that ignores
  signs that the decision is inappropriate (high
  failure risk)
• Psychological social factors
• Defence of ego self-image. Press on regardless.
  One-track interpretation of information.
  Underplay risks, weak planning. Stay with it or
  let the team down.
• Project factors
• Incorrect decisions as blips, to be remedied with
  a little more expenditure. Those not picked up
  escalate as project progresses
• Organisational factors
• Decision made - but inertia resistance to
  chance. Relief that the matter is now dealt with
  (past) but active passive resistances.

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Post-decision behaviour - Reducing escalation
tendencies

• Staw Ross prescription 1987
• Set minimum performance targets
• Require D-maker to compare target with
  performance
• Ensure that decision makers evaluators are
  different
• Try to ensure decision makers
• do not become too ego-involved with a project
• are aware of the consequences of persistence
• Provide some feedback about project completion
  and costs
• Reduce risks or penalties of failure

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Agenda Setting Model

• How do items get on the agenda?
• It is my job to look for decisions to make
• I have pet solutions and I am looking for issues
  to apply these to
• I (we) have my (our) hidden agenda
• I filter and choose problems to take up.
• I look for ways of getting the problems on the
  table at the right time.
• I present them in particular ways and take care
  of the politics and timing in order to present
  them
• I manipulate the examination progression of
  items I have tabled.
• I use special language and rhetoric to prepare
  hearts and minds of others essential to the
  decision being made

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Irving JanisVictims of Group Think
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Irving Janis - Victims of Group Think

• distorted decision-making in a cohesive group
• strong leader interaction, illusions of
  righteousness invincibility.
• inward-looking, self-regulating and stereotypical
  behaviours
• Symptoms
• failure to explore objectives alternatives
  fully. Rejected options seldom re-examined
• insufficient exploration of costs risks of
  options.
• assumptions unchallenged
• negative outcomes too readily discounted
• superficial information searches. Exclude data
  that "does not fit the picture" (selective/biased
  filtering)
• Consequences risks glossed over. Weak
  implementation, monitoring, contingency planning,
  worst case scenarios etc.

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Symptoms of Group Think

• 1. Illusion of Invulnerability.
• Power group may develop impression that it can
  do no wrong. "Our approach and organisation are
  sound. We are confident enjoy a good
  reputation. If we all work together we can't go
  wrong".
• Avoid by systematically playing devil's
  advocate.
• 2. Stereotyping Outsiders
• dangerous shared stereotypes to justify needs
  positions (other group members, rivals, enemies,
  commentators who delay or challenge what we must
  do).
• stereotypes can be inaccurate misleading. When
  combined with illusion of invulnerability - an
  outsider's views (even though expert) may be
  discount even discredited.

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3. Bounded rationality assumptions

• Mutual reassurance. Our interpretation
  perspective is correct.
• Failure to admit to what we don't know or don't
  want to know.
• Failure to challenge assumptions.
• Dome, Ford Probe, Mercedes A Class, thalidomide,
  Westland helicopter, Chunnel trains with lattice
  sides.
• Inverted intelligence" - clever people who can
  easily argue that the information must be wrong.
  
• The worst will never happen. We have everyone's
  best interests at heart".
• Avoid by listening, careful scrutiny of evidence
  alternatives. GO OUT and get more data.
  Challenge tethered assumptions.

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4. Belief in Inherent Morality

• Righteousness extension to invulnerability
• dogmatic, doctrinal perspective. The group as a
  whole
• feels they are doing the right thing believe
  the cause to be morally underpinned.
• Situations where radical change is being
  confronted.
• "Hard choices have to be made. Some people will
  get hurt. It is a jungle out there. We have your
  best intentions at heart are not seeking to
  hurt anyone."
• Recommendation caution sensitivity to scope
  for poor decision-making harm to
  individuals/minorities (excluded from choice)
• Constantly reappraise the "rightness" of the
  cause. There are always other alternatives.

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5. Self-Censorship.

• Members submit themselves to self censorship
  (conformity)
• Withdraw objections when rebuffed by leader or
  supporters.
• Weak in opening up discussion in a fierce
  argument.
• Minority of one - the risk of humiliation
  stress.
• If opposed "shut up" then carp outside about the
  decision. The excluded stereotyped loner
  (nuisance with a tired message), carping raking
  over old ground.
• Indicator? Leader uses guillotine - to cut short
  discussion expresses view that a consensus
  prevails.
• Everyone has expressed their views - haven't
  they?
• Tactic to close the door on a dissenter
• Recommendation?
• if you know something is really wrong - keep
  saying it.

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6. Direct Pressure on Dissenters

• questioner pressurised into agreeing.
• button-holing (lobbying) or discrediting
  dissenters.
• Leader or prominent use of power statements
  e.g. I'm sure that Sunil isn't trying to upset
  the apple cart".
• Lobbyists urge dissenters not to press their case
  too hard.
• Tony - is keen on this one wants to avoid
  delay" or Go along with it and we will fine tune
  the detail later".
• Leads to uncritical thinking, acquiescence
  conformity in decisions. Member expertise is not
  used effectively.

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7. Mind Guards

• Protectors who shield the leader from
  dissenters/doubters.
• Mind-guarding (self-censorship) - avoids
  expressing unpopular views.
• Silence contributes an illusion of unanimity.
  Some may have a private opinion but - no one
  wants to speak up.
• Avoid by ensuring that group members know the
  leader is open to feedback.

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Avoiding the worst of Group Think

• Group roles to evaluate group processes
  contributions.
• Focus on doubts uncertainties. Be tenacious.
  Challenge assumptions. Get full information.
  Challenge the data (significance reliability).
• Leaders to solicit receive feedback/criticism
  re- his/her judgements. See this as a contributor
  to quality - not a gripe or complaint mechanism.
  
• Avoid grudges punishment of "critics".
• Time-out to let individuals re-think,
  re-formulate, gather more data and re-present.
• Sub-groups to do more detailed work for
  re-presentation. Decompose tasks synthesise
  alternatives properly.