As the most successful form of organization, the company is a combination of elements that are as technical and concrete as they are intangible. Among the intangibles is decision-making, which is a process that takes place on a daily basis, so that the company can continue to move forward or carry out its usual activities. How does this process take place? What are its determinants?
Decision-making: a central roleDecision-making consists of making a choice between several possibilities or initiating action in response to a request arising from a certain situation. The process through which this decision making takes place is at the heart of a multitude of questions.
Most of these question the fact that environmental constraints instantly determine an organization's actions. This is what Charles E. Lindblom is focusing on, in particular, by directing his research towards unstructured decision-making practices. For him, the latter are made of iterative and framed comparisons, according to the internal and external context of the company.
In the ensuing analyses, it is frequently stated that the degree of structuring of the decision-making process is a key variable. This leads to the definition of several decision-making frameworks, depending on the understanding of the decision-making agents of the problem being addressed, and on the importance of the change that will be triggered by the decision.
The Decision-Making Process: Various Case StudiesThere are mainly four situations that can be observed in a situation where a decision has to be taken. Whether it is a drop shipping company or a recruitment agency, the combination of parameters of the same nature always leads to results of the same type. Thus, in the first case, when the understanding of the problem is low and the expected change is marginal (not much compared to the existing one), the decision will be made with incremental policies (policies implemented in small steps).
For the same level of understanding of the problem, but with a significant change expected, decision-making will take place with little or no structured analysis, and will probably be associated with crises or revolutions, or the emergence of great opportunities. On the other hand, for equally important changes, but this time with a good understanding of the problem, decision-making will take place without any method of analysis, leading to revolution or utopian projects. Finally, with a high level of understanding and less important expected changes, technical and administrative decisions will be made through a structured analysis.Understanding the decision-making process allows business leaders to bring in the most appropriate factors and to better orient expectations in the face of each new situation..