The Management of Organisations

Commentary on the Decisions, p1 of Background Briefing Notes 16 Each of the “decisions” illustrates different stages in the decision making process. In each example, different stages are more important. In 1) the most important thing was recognition that there was a problem – the alarm went off. You don’t hang about to wonder why (eg it could be a test, or a false alarm), or debate alternative courses of action; you acted immediately, and got out. In 2) you knew something was going on, but it was important to formulate the problem correctly.

If you had in fact overslept, you could have phoned in sick, or with your excuses; if it had been a burglar you could have phoned the police. None of these was an appropriate response to the real problem. In 3) the problem was resolved by the generation of an alternative course of action (later on you could have a row over a different problem – whether to eat Indian, Chinese, or fish and chips). In 4) once you had evaluated the options (against the criterion of time) it became pretty clear that to arrive on time you had to walk.

In 5) the evaluation of the alternatives showed that one TV set was more expensive than the other, but that was still the choice because the extra expense was worth it. In 6) you had to take some sort of action, and implement it – this took priority over agonising whether it was the most appropriate, or “best” action. In 7) you had to stay alert to monitor what was going on as you were driving. You also monitored the fact that your journeys were taking longer, which led you to decide to do something different.

Organisations can try to improve the quality of their decision making processes by paying attention to the different stages of the “rational model”, eg: Clear objectives can help with the recognition stage. Are we likely to reach our objective? If not, what are we going to do about it? To formulate what sort of problem we face, and generate alternatives, various devices that contribute to creativity can help – building a learning organisation, developing creative ideas through brainstorming, etc.

Clear rules are required for the evaluation of ideas – eg the use of discounted cash flow techniques in investment appraisal, and how to make the choice between alternatives. Effective planning involves thinking ahead to the implementation of ideas – it is no good having a great idea that can’t be put into practice, eg because of lack of resources, or because it runs into resistance that could have been anticipated, and dealt with, earlier on.

Do we have organisational systems that help good ideas get implemented? Attention must be paid to creating control systems that enable us to monitor what is going on, and take corrective action where required. So do enough people have access to relevant data, and do they know what to do with it? More about Group Decision Making There are particular issues attaching to group decisions, of the type that might be common inside organisations (teams, matrices, “corporate management”, committees, etc).

(Some of the devices aimed at increasing “creativity” are specifically designed to be used by groups. ) 1 As an example of a similar problem, some years ago a council erected an “Accident Black Spot” sign on a stretch of road where there had been several accidents. A few years later it blew down. The question was – should it be put back up again? There had been no accidents lately…… 2 Some military historians argue that this is what happened in the runup to Pearl Harbor.

Various US generals and admirals looked at maps, studied Japanese intentions, and got really worried – until they met in Chiefs of Staff meetings and reassured each other that it couldn’t possibly happen. Could it? 3 One early analysis was by the Oxford mathematician C L Dodgson – better known as Lewis Carroll – who was convinced that the Dean of his college got his own way by controlling the way apparently democratic decisions were arrived at.