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 decision making, called the
incremantal decision process model, places less emphasis on the political and
social factors described in the Carnigie model, but tells more about the
structured sequence of activities undertaken from the initial discovery for a
problem to its eventual 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 nonprogrammed 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, manu
organizational decisions are a series of nibbles rather than a big bite.
Organizations move 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 cycle are one way the organization learns
which alternatives will work. The ultimate solution may be very different from
what was initially anticipated.
The
pattern of decision stages discovered by Mintzberg and his associates is shown
in exhibit 11.4. Each box indicates a possible step in the decision sequence.
The steps take place in three major decision phases : identification,
development, and selection.
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 exists when elements in
the external environment change or when internal performance is perceived to be
below standart. In the case of firing a radio announcer, comments about the
announcer came from listeners, other announcer, and advertisers. Managers
interpreted these cues until a pettern 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 organization’s 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 groping, incremental
procedure, building a solution brick by brick.
Selection
Phase. The 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 solutions,
selection is more an evaluation of the single alternative that seems feasible.
Evaluation
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, as in the Carnegie model described earlier.
When
a decision is formally accepted by the organization, authorization takes place.
The decision may be passed up the hierarchy to the responsible hierarchical
level. Authorization is often routine because the expertise and knowledge rest
with the lower decision makers who identified the problem and developed the
solution. A few decisions are rejected because of implications not anticipated
by lower leve managers.
Dynamic
Factors. The lower part of
the chart in exhibit 11.4 shows lines running back toward the beginning of the
decision process. These lines represent loops or cycles that take place in the
decision process. Organizational decisions do not follow an orderly progression
from recognition through authorization. Minor problem arise that force a loop
back to an earlier stage. These are decision interrupts. If a custom designed
solution is perceived as unsatisfactory, the organization may have to go back
to the very beginning and reconsider whether the problem is truly worth
solving. Feedback loops can be caused by problems of timing, politics,
disagreement among managers, inability to identify a feasible solution,
turnover of managers, or the sudden appearance of a new alternative. For
example, when a small Canadian airline made the decision to acquire jet
aircraft, the board authorized the decision, but shortly thereafter, a new
chief executive was brought in and he canceled the contract, recycling the
decision back to the identification phase. He accepted the diagnosis of the
problem, but insisted upon a new search for alternatives. Then a foreign
airline went out of business and two used aircraft became available at a
bargain price. This presented an unexpected option, and the chief executive
used his own judgment to authorize the purchase of the aircraft.
Since
most decisions take place over an extended period of time, circumstances
change. Decision making is a dynamic process that may require a number of
cycles before a problem is solved. An example of the incremental process and
cycling that can take place is illustrated in Gillette’s decision to create a
new razor.
At
Gillette, the identification phase occurred because executives were aware of
the need for a new razor and became aware of the idea for floating, thin
blades. The development phase was characterized by the trial and error custom
design leading to the Sensor. During the selection phase, certain approaches
were found unacceptable, causing Gillette to recycle back and redesign the
razor, and to reappraise whether it should be a permanent or disposable razor.
Advancing once again to the selection phase, the Sensor passed the judgment of
executives, and manufacturing and marketing budgets were quickly authorized.
This decision took thirteen years, reaching completion in January 1990.
