Compare and contrast three models of organizational decision processes thought to occur when bounded rationality conditions hold.

Question

What will be an ideal response?

Answer 1

Student answers will vary, but should demonstrate accurate knowledge about organizational decision processes. The incremental model of decision making occurs when managers make small decisions, take little steps, move cautiously, and move in piecemeal fashion toward a bigger solution. The classic example is the budget process, which traditionally begins with the budget from the previous period and makes incremental decisions from that starting point. The coalition model of decision making arises when people disagree on goals or compete with one another for resources. The decision process becomes political as groups of individuals band together and try collectively to influence the decision. Two or more coalitions form, each representing a different preference, and each tries to use power and negotiations to sway the decision. The garbage can model of decision making occurs when people are not sure of their goals, or disagree about the goals, and likewise are unsure of or in disagreement about what to do. This situation occurs because some problems are so complex that they are not well understood, and because decision makers move in and out of the decision process due to having so many other things to attend to as well. This model implies that some decisions are chaotic and almost random. You can see that this is a dramatic departure from rationality in decision making.