Introduction to Public Administration

PAD 201

Decision Making
&
Communication

HMY
17 Oct, 2024
 Decision Making

• A problem-solving action or a strategy

• A decision needs to be implementable to achieve goals.
• Decision-making should have a rationale/justification.
 Stages in Decision Making Process

• Identify the Problem

• Gather information/collecting Data
• Make/prepare options or alternatives analyzing data
• Based on the analysis Select the best Alternative
• Apply them/implementation
• Feedback and reassesment
 Decision Making Style/Approaches

• Systematic Style
• Intuitive
• Dependent
• Avoidant
• Spontaneous
 Five Models of Decision Making

1. Satisficing model (Rational Choice Model)

2. Incremental Model
3. Mixed Scanning Model
4. Rubbish-bin Model/Garbage Can Model
5. Group Decision Making
 Rational Decision Making

• Rational decision-making is the opposite of intuitive decision-making.

• It is a strict procedure utilizing objective knowledge and logic.

• It involves identifying the problem to solve, gathering facts, identifying options and
outcomes, analyzing them, considering all the relationships, and selecting the decision.

Frédéric Adam, Dorota Kuchta, Stanisław Stanek (eds.), 2022, Rational Decisions in Organisations
Theoretical and Practical Aspects, CRC Press
 Rational Choice Model

Finding the best solutions to given problems

• A decision maker considers a finite set of alternatives, ascribes consequences
to them.
• Prioritises these consequences according to their importance and value
• A decision maker makes an optimal choice among available alternatives.
• A decision maker is supposed to know all available alternatives.
• A decision maker chooses the best alternative based on expectations and
future consequences or outcomes.
 Main Elements of Rational Choice Model

 It requires a great deal of time.

 It requires a great deal of information.
 It assumes rational, measurable criteria are available and agreed
upon.
 It assumes accurate, stable and complete knowledge of all
alternatives, preferences, goals and consequences are easy to find.
 It assumes a rational, reasonable, non-political world.
 Rational Decision Making Model

Assumptions
• An individual has full and perfect information on which to base a
choice.
• Measure criteria exist for which data can be collected and analysed.
• An individual has the cognitive ability, time and resources to evaluate
each alternative against the others
 Limitations of RCT

Assumptions of rationality are problematic.

WHY?
 The decision-makers make unrealistic assumptions about individual behavior as well as
the structure of the situation.
 The rational decision-making model does not consider factors that can’t be
quantifiable, such as ethical concerns or the value of altruism.
 It can’t leave out consideration of personal feeling, loyalties, or sense of obligation.
 Its objectivity creates a bias toward the preference of facts, data and analysis over
intuition or desires
 They are always influenced by self-interest.
 They are constrained by institutions, cultural influences, and psychological limitations.
 Limitations of Rational Decision Making
• Limited information: Rational decision making assumes that all relevant information is available, but in reality,
there may be gaps in knowledge or incomplete data, which can affect the decision-making process.

• Biases: Individuals may have personal biases that can affect their decision-making process. For example, they may
favor certain options or have a preference for a particular outcome.

• Emotions: Rational decision making assumes that decisions are made based on logic, but emotions can also play a
significant role in the decision-making process, and can lead to irrational choices.

• Time constraints: In some cases, there may be time constraints that prevent a thorough analysis of all options,
which can lead to suboptimal decisions.

• Uncertainty: Sometimes, there is uncertainty about the outcomes of different options, which can make it difficult
to make a rational decision.

• Cost-benefit analysis limitations: While cost-benefit analysis is a common tool used in rational decision making, it
can be challenging to assign monetary values to certain outcomes or benefits, making it difficult to compare
options.
 Satisficing Model (Herbert Simon)
What is Bounded Rationality?

 Bounded rationality is a human decision-making process in which we attempt to satisfice,

rather than optimize.

 It means that managers’ ability to be perfectly rational is limited because of cognitive capacity
and time constraints.
Bounded rationality as a framework to understand actual managerial decision making
(Bazzerman, 1986).
This model is a more practical line of thought. Instead of striving for the perfect solution, this
model seeks a satisfactory solution that meets minimum criteria or goals.
Bounded rationality occurs when we make decisions based on limited information. It may lead
to suboptimal decisions as it only considers some available options.
It suggests that people don’t always make perfectly rational decisions. Instead, use simplified
decision-making forms. This means that we often make suboptimal choices.
 Satisficing Models
Factors that affect managers’ rational decisions.
• Decision makers may have inadequate information about the nature of the problem
• Time and cost factors limit the amount of information gathered.
• Decision makers perceptions about relative importance of various pieces of
data/information.
• The part of human memory used in making decisions retains only a relatively small
amount of information at a time.
• The calculating capacities associated with intelligence limit the scope for optimal
decision making.
 Satisficing Model is used:
• When people are unable to collect all relevant information due to time pressure or
other constraints
• When people are making decisions based on inaccurate or incomplete information
• When a person is influenced by emotions or other prejudices that distort judgment

Menghan Jin, Lingling Ji, and Huamao Peng (2019), The Relationship Between Cognitive Abilities and the Decision-Making Process: The Moderating Role of Self-Relevance. The Frontiers in Phycology, Volume 10 - 2019
 Incremental Decision
• The incremental decision making is a process to make decisions in step-by-step.
•It involves making small, consistent adjustments to business strategies or policies in
response to new insights, information, or changes in the business environment.
• This method prefers continuously assessing and making step-by-step improvements. The
primary benefits include more adaptable decision-making, reduced risk, and improved
mitigation of unforeseen impacts.
• The incremental decision making approach is often used in government settings, such as
defining public policy.
• It can help to ensure that all options have been considered and that the final decision is
made in the best interest of the public.
• Managers make smallest possible response to solve a problem (Huber, 1980, Etzoini, 1967).
Incrementalism is a short-term approach.
• Incrementalism does not require managers to process a lot of information to take actions
 Features of Incremental Model

 Gradual Changes: Instead of drastic adjustments, incremental decision-making

encourages small, manageable changes.
 Routine Reassessment: This element stresses the importance of constant
evaluation to observe the impacts of decisions made.
 Adaptability: Incremental decision-making aligns/adapt as per the prevailing
business conditions.
 Feedback: Driving the decision-making process by influencing future decisions
and modifications.
 Limitations of Incremental Model

• Overlooks opportunities for significant innovations

• Ignores the empirical fact that incremental decisions are often, in effect, made
within the context of established decisions.
• It helps reduce/avoid risks:
• It allows you to change your mind
• It helps gather more information
Common criticism is:
It’s time consuming
 Mixed Scanning Model

• The mixed scanning model (Etzioni (1967, 1986) synthesizes the rationalistic and
incremental approach by combining the high order, fundamental policy making processes.

• Mixed Scanning combines the broad, overall perspective of the optimizing model with the
practicality and focus of the satisficing model.

• This model considers long term scanning, and incremental processes which is related to
fundamental decisions which can be considered as short-term scanning.

• The scanning process provides a strategy for evaluation and flexibility to scan different
level of situations makes it useful tool for decision making in different levels of
environmental stability.
 Garbage Can Model
• This model compares the process to a garbage can, where different elements such as problems,
solutions, participants, and choice opportunities are thrown in and mixed together
• The rubbish-bin model holds that managers behave randomly in making the non-programmed
decision.
• The Garbage Can Model suggests that this unpredictability is part of the decision-making process.
• Favourite solutions available for a problem to solve.
• This model works when decision-makers have no goal preferences or are dictated by
organisational strategic goals.
• It happens when decision-makers change their roles frequently.
• It happens in the absence of any strategic direction of a company.
• Decision makers often operate in an irrational environment with a lot of uncertainty.
• Decisions without following the rational approach of gathering facts and weighing the evidence
thoughtfully.
• Garbage can decision-making doesn't go looking for the perfect solution. Instead, it mixes and
matches the elements the organization has already piled into the can.
Cohen, March and Olsen (1972), Garbage Can Model of Organizational Choice, Administrative Science Quarterly 17(1):1-25
 Group Decision Making

• Major decision in organisations are made by more than one person

• Team based participatory approach.
• Each team (workgroup) makes most decisions involving its work
area (Fowler, 1988).
• This model helps managing diversity of ideas.
• Facilitates dialectical inquiry.
 Advantages and Disadvantages of Group
Decision Making
Advantages Disadvantages
1. More information and knowledge. 1. Usually more time consuming.
2. An increased number of diversity 2. Disagreements may delay decisions.
and alternatives can be delivered. 3. One or a few group members may
3. Greater understanding and dominate the discussion.
acceptance of the decision are likely. 4. Group think may cause members to
4. Managers develop knowledge and overemphasise achieving
skills for future use. agreements.
5. Increased belongingness and 5. Non-participants may feel sideline
commitment
 Communication
 Communication is a two-way process which involves transferring of
information or messages from one person or group to another.
 It includes a minimum of one sender and receiver to pass on the messages.
 These messages can either be any ideas, imagination, emotions, or thoughts.

Different ways of Communication:

 Verbal/Non-Verbal/Written Communication
 Top Down Communication
Communication in:
A Public Sector/Bureaucratic Organization
A Private Organization
 Communication Style

o Passive Communication often looks like not communicating at all for fear of speaking
up. This can lead to misunderstandings.
o Aggressive Communication tends to be driven by anger and judgment and can also
result in inflexibility. This can create a hostile environment.
o Passive-Aggressive Communication might mean you don’t directly communicate your
feelings, but you hold on to negative emotions and let those affect your actions. This
can cause confusion and resentment.
o Assertive Communication is confident but also respectful of others' thoughts and
feelings. Assertive communication creates space for honest conversations and
promotes healthy connections between individuals.
 Importance of communication

Good communication encourages motivational skills.

Effective mode of transfering information in the decision-making process.
Communication assists both formal and informal relationship within or outside
the organisational structure.
Helps maintaining chain of command in the organization
 It helps in controlling the process. Employees have to follow the organisation
rule, code of conduct and other company policies
• Open Discussion