E

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.