Part 4 Organizationa l Constraints The organization itself constrains

decision makers. They shape theirdecisions to reflect the organizations performance

evaluation andreward system and organizational ly imposed time constraints.Pr

evious organizational decisions also act as precedents to constraincurre nt decisions.

Performance Evaluation Decision maker are strongly influenced in their decision

making bythe criteria by which they are evaluated.[If a division manager

believes that the manufacturin g plants underhis responsibility are operating

best when he hears nothingnegati ve, we shouldnt be surprised to find that his

plant managersspen d a good part of their time ensuring that negative informationdo

esnt reach the division boss.][If a college dean believes that an instructor should never

fail morethan 10 percent of her students to fail more reflects on theinstructors ability to

teach we should expect that new instructor,wh o want to receive favorable

evaluations, will decide not to fail toomany students.] Reward System

What choices are preferable in terms of personal payoff?If the organization rewards risk

aversion, managers are likely tomake conservative decisions.[Ge neral Motors consistently

gave out promotions and bonuses tomanager who kept a low profile, avoided

controversy, and weregood team players. The result was that GM managers became

veryadept at dodging tough issues and passing controversial decisionson to committees]

SystemImposed Time Constraints Organizations impose deadlines on

decisions.A host of decisions have to be made quickly in order to stay aheadof

the competition and keep customers be made quickly in orders tostay ahead

of the competition and keep customers satisfied.

And almost all important decisions

come with explicit deadlines. Th ese conditions create time pressures on decision

makers andoften make it difficult, if not impossible, to gather all the

informationth ey might like before having to make a final choice. The rationalmodel

ignores the reality that, in organizations decision come withtime constraints

Historical Precedents Rational decision making takes an unrealistic and

insulatedpersp ective. It views decision as independent and discrete events.But

that isnt they way it I in the real world! Decisions arent madein a vacuum. They have a

context. In fact, individual decisions aremore accurately characterized

as points in a stream of decisions.Dec isions made in the past are ghost that continually

haunt currentchoice s.Its common knowledge that the largest determining

factor of thesize of any given years budget is last years budget.Choice s made today,

therefore, are largely a result of choices madeover the years. Cultural Differences

The rational model does not acknowledge cultural differences. But,we need

to recognize that the cultural background of the decisionmake r can have

significant influence on his or her selection of problems, depth of analysis, the

importance placed on logic andrationality , or whether organizational decisions

should be madeautocrati cally by an individual manger or collectively in groups.

(Like Japan Manager is more grouporiented. Before making an importantdeci

sion, they collect a large amount of information, which is thenused in consensus-

forming group decisions.)So me cultures emphasize solving problems;

others focus onaccepting situations as they are. Problemsolving decision

makerbelieve that they can and should change situations to their benefit.

Part 5 Ethics in

Decision MakingUtilita rian criterion Decisions are made solely on the basis of their

outcomes orconsequenc es. The goal of it is to provide the greatest good for the

greatestnumbe r. This view tends to dominate business decision making.(Effic

iency, productivity, and high profits)[+ A focus on utilitarianism promotes

efficiency and productivity.Ignoring he rights of some individuals particularly those

withminority representation in the organization.] Right criterion

This call on individuals to make decisions consistent withfundamen tal liberties

and privileges as set forth in documents suchas the Bill of Right.An emphasis on

rights in decision making means respecting andprotecting the basic rights of

individuals.(T he right to privacy, tofree speech, and to due process)[+ Protects

individuals from injury and is consistent with freedomand privacy-

Create an overly legalistic workplace that hinders productivity

andefficiency. ] Justice criterion This requires individual to impose and

enforce rules fairly andimpartiall y so there is an equitable distribution of benefits and

costs.[+ The interests of the underrepresen ted and less powerfulEncourage a

sense of entitlement that reduces risk taking,innovat ion, and productivity.