Strategy to Decision making in Organizations today

Even though we have moved forward, from the times when development was seen as a linear process and where the road ahead was uncertain but calculable, managers still tend to seek the rational decision making models when making a strategy. In rational decision making, the “economic man” (Simon, 1952) has gained experience, knowledge and skills in the field in which the decision is being made . With this it is assumed that it is possible to make a rational decision. Elbing (1978) argues that past experience in decision - making is no guarantee that we have learnt from the past experiences. Furthermore, what we learn from past experience is limited as we find ourselves in complex and new situations, never experienced before and we will have to take a decision. He stresses that the new situations require insights and understanding not already developed from past experiences. These past experiences can be a limit to the decision-making, as we sometimes base our new decisions on past experiences, which is not applicable to the new context. For instance, when disappointing results in primary and secondary schools in Norway were presented, the government would search for solutions. From past experience, when approaching this problem the solution would be to improve the quality of teaching by getting better teachers into teaching by e.g. raising the salaries of teachers. This solution might be feasible, but by basing new decisions on experience, the innovative solutions, which are required in new and complex situations, will be left out. Teach First for instance as a solution to the problem would not be considered.

Now, more focus has been directed towards change when making big decisions in organizations. The fact that change need for creativity; thinking in new ways is challenging the rational decision making process which focus on the future as a linear road ahead, which it is not (Peters: 2006, Hamel, Hammer, Gibson: 1998). Prahalad stresses; “if you want to escape gravitational pull of the past, you have to be willing to challenge your own orthodoxies. To regenerate your core strategies and rethink your most fundamental assumptions about how you are going to compete” (1998: p.7).

Bringing in creativity, such as in scenario workshops, you bring in the whole of the human being and its emotions in order to look beyond the existing and achieve thinking “outside the box”. In this process of being creative you also look beyond logic in order to identify new opportunities. This opens up decision making to a greater dimension and needs new methods to reach the “best” possible decision. Scenarios workshops can be such process. Peterson (2003) argues that scenarios help compensate for the usual errors of decision making- overconfidence and tunnel vision” (p.359).

Better understanding of the purpose of decision-making must be considered when choosing an approach. Decision-making is just one step in a bigger context of mobilizing action (Brunsson: Quinn, 1989) and is therefore an organizational process to get people to commit. Commitment comes from motivation to go in that particular direction. If the decision should be made to be successful, it is about mobilizing action and then get people to be motivated and mobilize. It is key that the need of managers today is to approach the decisions as it emerges (in a quicker way than before, with no time for a rational decision-making process) and need to base the decision on information gathered before the problem emerges.

Effort is put into preparing for it as a proactive approach rather than starting a decision making process when the problem is defined (diagnosed as done in traditional rational decision making approaches).

In order to be competitive in an ever changing society, managers need new ways of approaching decision- making, legitimizing creativity and thinking “unlogical” as a part of the decision making process.