Decision making in administration
- 1. Decision Making in Administration Introduction to Public Administration
- 2. Introduction • Governance is predicated on decision making • Decision making considered extremely important to public administration • Direct impact • Long lasting impact • Decisions can be: • Controversial • Source of criticism • What do we mean by decision making? • Decision making – the process in which choices are made change (or leave unchanged) an existing condition and to select a course of action most appropriate to achieving a desired objective, while minimizing risk and uncertainty to the extent that is possible.
- 3. Elements of Decision Making • Uncertainty • Benefits (gains) • Process • Costs (expenditures) • Risk • Routinization • Routine decisions • Complex decisions
- 4. Approaches to Decision Making: The Rational Choice Model (Classical/Economic Model) • Rational approach – an approach to decision making that is derived from economic theories of how to make the “best decisions”. • Assumption: Decision makers are rational. • What does this mean? • Achieve goal using the fewest amount of resources • Ability to separate ends (goals) from means (methods of achieving goals) • Ability to know the range of all possible choice alternatives. • Ability to rank order possible choices and choose the best choice available. • Ability to gather data and information to assist in decision making. • Ability to be objective in decision making. • Ability to know the consequences of any given decision. • Ability to remain consistent in decisions when a certain set of alternatives exist. • Efficiency • Efficiency = maximizing outputs while minimizing inputs. • Cost-benefit Analysis – technique designed to measure relative gains and losses resulting from alternative policy and program options.
- 5. Criticisms of the Rational Choice Model • Basic Criticisms: • Rational choice theory may not apply to areas that are not purely economic. • Assumes that actors have perfect information for all of the abilities necessary for rationality. • Bounded rationality – the nation that there are prescribed boundaries, controls, or upper and lower limits on the decision-making abilities of individuals within organizations. • Specific Criticisms: • It is impossible to separate facts and values. • It is impossible to separate ends from means. • Decision makers do not all agree on goals. • Failure to account for time. • Decision makers can only process so much information. • The rationality of decision makers is bounded (below). • It is impossible to determine or predict all possible outcomes for each choice.
- 6. Approaches to Decision Making: Incrementalism • Incrementalism – a model of decision making that stresses making decisions through limited, successive comparisons with a more narrow range of alternatives rather than a comprehensive list of all alternatives. • Successive Limited Comparisons • Decision makers can make small decisions that cause only a minor amount of change and determine whether the small change results in a move in a positive direction or a negative direction. • Minimizes the chance that drastic results will occur. • Incremental adjustments can be made as each individual, short-term decision is made. • More focused on the short term rather than the long term. • Predicated on the fact that incrementalists believe that it is impossible to account for all the ways a decision will affect other decisions, processes, and outcomes. • Satisficing • Incrementalists believe that they can only satisfice (satisfactory and suffices) during the decision making process. • Settle for good enough as opposed to perfectly rational. • Intrinsic Value • Incremental decision making moves away from purely economic motivation and toward noneconomic motivations.
- 7. Criticisms of Incrementalism • Limiting innovation. • Small successive comparisons may limit the ability to come up with bolder policy proposals and decisions. • Small successive comparisons may also not meet the demands of the public (i.e., they may not satisfice). • The potential for inertia. • Responding only to short term needs through successive limited comparisons misses the broader goals. • Members of the organization may seek to keep the status quo as small movements and perceived failures can allow for conservers to prevent change (inertia).
- 8. Approaches to Decision Making: Mixed Scanning • Mixed scanning – a model of decision making that combines rational- comprehensive model’s emphasis on fundamental and long-term consequences with the incrementalists’ emphasis on changing only what needs to be changed in the immediate situation. • Hybrid of rational choice and incrementalism. • Fundamental vs. Non-fundamental Decisions • Fundamental = rational-comprehensive • Non-fundamental = incrementalism • Allows for both a micro and macro view of decision making. • Micro decisions affect macro decisions and vice versa.
- 9. Criticisms of Mixed Scanning • How does one determine what is a fundamental decision versus a non- fundamental decision? • Is the classification of decisions necessarily correct? • Response from incrementalists: incrementalism can apply to large and small decisions.
- 10. Other Considerations of Decision Making • Resources • Time • Personnel • Money • Political capital • Costs and Benefits • How does one determine if benefits are worth the costs? • How does one measure costs and benefits when they are non-economic? • Grounds for Decision Making • Substantive • “Decisions made on the merits of the question.” • Political • Some decision makers will consider the net political losses or gains when making a decision. • Organizational • The grounds for decision making here is the consideration of the impact of the decision on the organization. • Tension! • The reliance on various grounds for decision making and the differing focuses of different employees can create tension within the organization. • Time • Decision making is bounded by time. • There is not unlimited time to make decisions.
- 11. Information Resources and Decision Making • Information is necessary to making rational decisions and the more information the better. • Rational choice represents the ideal. • Decision makers have data on all available choices and outcomes and it is possible to verify the accuracy of all data. • Muddling through represent the reality. • Decision makers do not have access to all data to inform them of choices and potential outcomes and it is impossible to verify the accuracy of all data. • Decision Analysis – the use of formal mathematical and statistical tools and techniques, especially computers and sophisticated computer models and simulations, to improve decision making. • Statistics and the use of mathematical models have become a part of decision making. • This includes the use of computers and statistical packages (software). • Also includes the use of sampling techniques.
- 12. Warnings, Limitations, and Cautions of Technology and Information • Technology • There are limits to what humans and computers can do and computers can never supplant human judgement. • Obtaining data can require use of significant resources. • Acquisition costs • Analyzing data requires the use of organizational resources such as personnel and time. • Dangers • Computer hacking • Viruses • Information • Acquiring information (broader than data) also requires the use of resources. • Biases associated with information • Biases affect the sending, relaying, and receiving of information. • Complete objectivity, as said before, is impossible. • Deliberate distortion of information
- 13. Other Limitations on Decision Making • Decision makers are limited by past decisions. • Groupthink – a mode of thinking that people engage in when they are deeply involved in a cohesive in-group, when members striving for unanimity override their motivation to realistically appraise alternative courses of action. • Smaller groups • Sunk costs – resources committed to a given decision, any cost involved in the decision that is irrecoverable. • Once resources are committed to a certain decision, these resources cannot be recovered.
- 14. Topics Not Covered • The Problem of Goals • Ethics and Decision Making