Module 7 Lecture
Introduction to Decision-Making in Public Organizations
Objective: Discuss decision-making processes and theories specific to public organizations.
Key Areas of Focus:
How public decisions are made
Considerations for making decisions
Evaluation of decisions
Outline of the decision-making process:
Identification of the problem
Root cause analysis
Setting objectives
Generating alternatives
Evaluating alternatives
Implementation and evaluation of the decision
Steps in the Decision-Making Process
1. Identifying the Problem
Importance of clearly defining the problem:
Understanding what is happening vs. the ideal situation.
Example Illustration:
Employees serving 10 clients/day vs. the expected 20 clients/day indicates underperformance,
This gap represents the problem.
2. Analyzing the Causes of the Problem
Inquiry into root causes:
Are employees dissatisfied with salaries?
Are they incompetent?
Are there technical issues or inefficiencies in the working system?
Key Questions for Information Gathering:
Have all available information sources been utilized?
Are there barriers to gathering information?
3. Setting Objectives
Objectives must be:
Specific
Measurable
Clearly defined
Importance of effective objectives illustrated:
For financial aid decisions:
Must objectives: Criteria candidates must meet (e.g., income level, dependency status).
Want objectives: Desirable criteria (e.g., marital status).
4. Generating Alternatives to Achieve Objectives
Importance of referencing past situations:
Learning from previous similar problems and solutions.
Brainstorming for creative solutions:
A key part of addressing the present problem; however, it can create conflict between safety and risk-taking.
Outcome of brainstorming:
Several alternatives to achieve the set objectives become available.
5. Evaluating Alternatives and Making Decisions
Methods for evaluation:
Use of a balance sheet for comparing costs and benefits.
Example of Decision Making via Balance Sheet:
When choosing between two job offers: Seattle vs. Felix.
Important factors: Work hours, health insurance, salary, promotion opportunities.
Score evaluation method: Assign scores based on significance and multiply by importance to determine suitability.
6. Implementation and Evaluation of the Decision
Decision Implementation:
Put the chosen alternative into action.
Post-implementation Evaluation:
Assess how well the decision achieved the set objectives.
Theoretical Models of Decision Making
Rational Decision Making Model
Assumption of the rational man:
Individuals are fully rational and utility maximizers.
Decision Process:
Estimate opportunity costs; compare marginal benefits and costs.
Key Definitions:
Opportunity Cost: Benefits lost from alternatives not chosen.
Marginal Benefits: The benefit of consuming an additional good.
Marginal Cost: The cost of consuming an extra good.
Example for clarity:
Purchasing pizza slices: First slice provides significant satisfaction while subsequent slices may provide diminishing returns.
Conclusion of Rational Model:
Decisions made where marginal benefit ≥ marginal cost.
Bounded Rationality Model
Critique of Rational Model:
Proposed by Herbert Simon;
Argues rationality is limited by constraints in information and cognitive resources.
Definition of Bounded Rationality:
Decision-making aimed at satisfactory outcomes rather than optimal ones due to constraints.
Characteristics:
Simple search procedures, stopping rules, and decision rules.
Satisficing Concept:
Accepting first satisfactory solution rather than comparing multiple alternatives.
Incremental Decision-Making Model
Focuses on gradual policy changes rather than radical shifts.
Criticisms:
Often seen as a mechanism for maintaining the status quo.
Implicit Favorite Model
Concept:
Individuals have an implicit favorite that influences decisions subconsciously.
Outcome:
Post-decision rationalization of pre-formed choices.
Garbage Can Model
Decision-making is random and unsystematic within organized anarchies.
Four Streams:
Problems, Solutions, Policy Streams, and Participation determined ad hoc.
Conclusion:
Decisions made more randomly than through systematic approaches.
Kingdon's Stream Model
Proposed refinement to the Garbage Can Model.
Three Independent Streams:
Problem Stream: Issues needing attention.
Policy Stream: Proposed solutions.
Political Stream: Current political conditions.
Concept of Opportunity Windows:
Moments when streams converge and policy entrepreneur can promote solutions.
Participatory Model vs. Elite Model
Participatory Model:
Inclusion of diverse voices in decision-making (public meetings, advisory boards).
Elite Model:
Decision-making concentrated among those with power, expertise, or authority.
Dysfunctional Decision-Making
Groupthink
Definition:
Conformity among group members that can lead to poor decisions.
Causes:
Strong leadership, homogeneous group, insulation from outside views.
Effects:
False sense of invulnerability, ingroup bias, self-censorship.
Prevention Strategies:
Encourage critical thinking, diversity, and an open culture for discussions.
Ethical Implications in Decision Making
Ethical Decision-Making Framework
Mention of an officer's ethical dilemma regarding intoxicated driving tickets.
Hierarchical vs. ethical priorities:
Necessity for ethical standards over hierarchical loyalty.
Characteristics of Practices in Public Administration
Defining 'Practices':
Socially established activities founded on values and principles, aiming for excellence.
Distinction between internal and external goods:
Internal Goods: Values achieved through shared commitment (e.g., justice, public interest).
External Goods: Individual achievements like power or status.
Example Illustration:
Challenger disaster demonstrates prioritizing external goods (profitability, timelines) over internal goods (safety).
Conclusion and Next Steps
Next lecture topics announced:
Public budgeting and citizen participation.