1. Bahçeşehir University
Social Science Institutions
Ph D. Business Program
Management & Organization
Organizational Theory
Prof. Dr. Atilla DİCLE
Decision Making
Prep. by: İlhan ÇİFTÇİ

2. The cognitive process of reaching a decision.
Decision – Making is a indivual or corporate selection for future results. Sometimes It is difficult to choose a way that uncertanity sistuations.
The cognitive process of reaching a decision.
A position or opinion or judgment reached after consideration.
Choosing between alternative courses of action using cognitive processes - memory, thinking, evaluation, etc.
The process of mapping the likely consequences of decisions, working out the importance of individual factors, and choosing the best course of action to take.
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3. Decision Mistakes and Learning- I

4. Decision Mistakes and Learning- II

5. Decision Mistakes and Learning- III

6. Decision Mistakes and Learning- IV

7. Decision Mistakes and Learning- V

8. Bahçeşehir University - Organizational Theory
Today’s Business Enviroment
Demands more large - scale change via new strategies, reenginering, restructuring, mergersacqusitions, downsizing, new product or market development, and so on
Decision Made Inside the Organization
Are based on bigger, more complex, more emonitionally charged issues
Are made more quickly
Are made in a less certain enviroment, with less clarity about means and outcomes
Require more cooperation from more people involved in making and implementing decisions
A new Decision – Making Process
Is required because no one individual has the information needed to make all major decisions
Is required because no one indivual has the time and credibility needed convince lots of people to implement the decision
Relies less on hard data as a basis for good decisions
Is guided by a powerful coalition that can act as a team
Permits decisions to evolve through trial and error and incremental steps as needed.
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9. Decision Making Comlexity Categories
Programmed
Non Programmed
Repetitive and well defined
Procedures exist
Criteria of performance are normally clear
Good information about performance is available
Alternatives are easily specified
Novel and poorly defined
No procedure exist
It is used when an organization has not seen a problem before and may not know how to respond
Clear – cut Decision criteria do not exist.
Alternatives fuzzy

10. Individual Decision Making
Individual Decision Making can be described in two ways:
Rational Approach: It is suggested that, how Managers should try to make decisions. This is an ideal managers may work toward but never reach.
Bounded Rationality Approach: It describes how decisions actually have to be made under severe time and resource constraints.
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11. Bahçeşehir University - Organizational Theory
Decision Making Parts
Problem Identification:
Information about enviromental and organizational conditions is monitored to determine if performance is satisfactory and to diagnose the cause of shortcomings.
Problem Solution:
Stage is when alternative courses of action are considered and one alternative is selected and implemented.
Definition:
Organizational Decision making as the process of identifying and solving problems. It has 2 major parts:
Problem Identification
Problem Solution
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12. Individual Decision Making
Rational Approach
PROBLEM IDENTIFICATION
PROBLEM
SOLUTION
Monitor the Decision Enviroment
Develop Alternative Solution
Define the Decision Problem
Evaluate Alternatives
Specify Decision Objectives
Choose the Best Alternative
Diagnose the Problem
Implement the Chosen Alternative
RATIONAL APPROACH
Ratiıonal Approach model is an ideal not fully achievable in the real world of uncertanity, complexity, and rapid change.
This model help managers think about decisions more clearly and rationally.
It ensures make better decisions even when there is a lack of clear information.
It has broken 8 steps and illustrated left side .
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13. Monitor the Decision Enviroment
Rational Approach
Manager monitor Internal and External Informatipon that will indicate deviations from planned or acceptable behavior.
Financial Statements
Performance Evaluation
Industry Incides
Competitors Activities
So forth.
Manager Reviews
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14. Define the Decision Problem
Rational Approach
Problem determination phases
Who was affected,
Who was involved
Where, when occur
How current activities influenced
Specify Decision Objectives
The manager determines what performance outcomes
should be achieved by a decision.
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15. Develop Alternative Solutions
Diagnose the Problem
Rational Approach
The manager digs below the surface to analyse the cause of the problem. Additional data might be gathered to facilitate this diagnosis.
Develop Alternative Solutions
Before amanager can move ahead with decisive action plan, he or she must have a clear understanding of the various options avaliable to achieve desired objectives. The manager may seek ideas and suggestions from other people.
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16. Evaluate Alternatives
Rational Approach
This step may involve the use of statistical techniques or personnel experience to measure the probability of success.
Choose The Best Alternative
This step is CORE of the decision process. The manager uses his/her analysis of the problem, objectives, and alternatives to select a single alternative that has the best chance for success.
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17. RESULT of Rational Approach Model
Implement the Chosen Alternative
Rational Approach
Finally, the manager uses managerial, administrative and persuasive abilities and gives directions to ensure that the decision is carried out. The monitoring activity begins again as soon as the solution implemented.
RESULT of Rational Approach Model
First 4 step is related to problem identification and other 4 step is problem solution.
8 steps are integrated and can not be applied solely.
Deviations from the Rational Approaches are explained by the bounded rationallity perspective.
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18. Individual Decision Making
Bounded Rationality Perspective
Managerial Decision Makings shows that, managers are unable to follow an ideal procedure. Rational Approach Model could not be worked with unideal cases. Time contstraints, internal and external factors, ill defined process lead to many decisions must be made very quickly. Managers have only so much time and mental capacity and, hence, cannot evaluate every goal, problem and alternative.
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19. Constraints and Tradeoffs
Not only are large organizational decisions too complex to fully comprehend, but several other constraints impinge (vurmak, çarpmak) on the decision maker.
Corporate culture and ethical values also influence decision makings.
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20. Bahçeşehir University - Organizational Theory
The Role of Intution
The bounded rationally perspective is often associated with intuitive decision process. In intutive decision making, experience and judgement rather than sequential logic or explicit reasoning are used to make decisions. Intution is not arbitrary or irrational because it is based on years of practise and hands on experience, often stored in the subconscious. (bilinçaltı)
Intution plays an increasingly important role in problem identification in today’s fast – paced and uncertain business enviroment.
A study of manager problem finding showed that thirty of thirty – three problems were ambiguosu and ill defined.
Managers may walk a fine line between two extremes: on the one hand, making arbitrary decisions without careful study, and on the other, rkying obsessively (saplantılı) on numbers and rational analysis.
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21. Constraints and Tradeoffs during Nonprogrammed Decision Making
Decision/Choice
Search for a high – quality decision alternative
Bounded Rationality:
Limited time, information, resources to deal with complex, multidimensinal issues
Personal Costraints:
Personel desire for prestige, success; personal decision style; and the desire to satisfy emotional needs, cope with pressure, maintain self - concept
Organizational Constraints:
Level of: agreement, shared perspective, cooperation, or support; corporate culture and structure, ethical values.
Samuel F.B. Morse
Invented the Telegraph with a lots of Tradeoffs
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22. Organizational Decision Making
Today’s managers amd organizations are dealing with a higher percentage of non programmed decisions because of rapidly changing business environmet.

23. Organizational Decision Making
Decisions are made about organization strategy, structure, innovation and acqusitions.
Executive Management interests long maturity strategic decisions and related to whole business, middle level management interests the applications middle and short maturities and others interest the very shot applications. This situation is shown best organization decision making structure.
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24. Organizational Decision Making
The process by which decisions are made in organizations are influenced by a number of factors, particularly the organization’s own internal structures and the degree of stability or instability of the external enviroment.
It seperates four primary tyoes
Types of Organizational Decision Making
The Management Scieince Approach
The Carnagie Model
The Incremental Decision Process Model
Garbage Can Model
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25. Organizational Decision Making
Management Sicence Approach
The management Science Approach to Organizational Decision Making is the anlog to the rational approach by individual managers.
Success Conditions
Problems analyzable
Variables identifies
Measurable
Weakness
Ignore human judgement
Qualitative factors can not be considered such as competitor reactions, consumer tastes, product warmth
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26. Organizational Decision Making
Carnegie Model
Carnegie – Mellon University academic research helped formulate the bounded rationality approach to individual decision making, as well as provide new insights about organizational decisions.
Research by The Group indicated that, organization level, decisions involved many managers and that a final choice was based on a colalition among those managers.
Management coalitions are needed during decision making fro two reasons.
Organizational Goals are often Ambiguous, and operative goals of deparments are often inconsistent
Human cognitive Limitations
Instead of Optimize Problem Solution, satisfice is used
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27. Organizational Decision Making
Incremental Decision Process Model
Twenty five Decisions made in organizations and
traced the events associated with these decisions from
Beginning to end.
One importance is that major organization choice are
Usually a serises of small choices that combine to produce the major decision.
Based on this approach three major decisions are
important: - Identification
- Development
- Selection
Henry Mintzberg and his associates in MCGill University develop this.
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28. Organizational Decision Making
Garbage Can Model
This Model is not Directly comparable to the earlier
models, bcs the garbage can model deals with the
Pattern or flow of multiple decisions within
Organizations. It ensures that and help us think of the whole organiztion and the frequent decisions begin made by
managers throughout.
The unique characteristic of the garbage can model is
that the decision process is not seen as a sequence of steos that begins with a problem end with a solution.
Indeed, problem identification and problem solution may not be
connected to each other, An idea may be proposed as a solution
when no problem is specified, A Problem may exist and never generate
A solution and so forth.
James March and his collegous developed the Organized Anarchy
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29. Organizational Decision Making
Management Science Approach
Carnegie Model
Incremental Decision Process Model
Garbage Can Model
Problems
Potential Solutions
Identification
Participants
Coalition
Development
Choice Opportunities
Ambiguous
Selection
Satisfice rather than optimize
Measurablity

30. Organizational & Individual Decision Making
Organizational Decision Making
Single Manager
Individual , a single view point
Intangible and tangible results are more common.
Affects the person and close familiy.
Generally take a decision is faster than corporation and implementation is interested more narrow enviroment.
Several Manager
May Departments play a role for problem identifiaction and solutuin, multiple view point
Tangible Results only
Affects corporate identity, shareholders, stakeholders, investors etc.
Decision Making

31. Some of The Successful Decision Owners
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32. Questions and Explanations
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