Organizational constraints to decesion making

1. Performance evaluation

Managers are strongly influenced in their decision making by the criteria by which they are evaluated. If a division manager believes that, the manufacturing plants under his responsibility are operating best when he hears nothing negative, we shouldn’t be surprised to find his plant managers spending a good part of their time ensuring that negative information doesn’t reach the division boss.

2. Reward systems
The organization’s reward system influences decision makers by suggesting to them what choices are preferable in terms of personal pay off. If the organization rewards risk aversion, managers are more likely to make conservative decisions.

3. Formal regulations
All but the smallest of organizations create rules policies, procedures and other formalized regulations in order to standardize the behaviour of their members. By programming decision, organizations are able to get individual to achieve high levels of performance without paying for the years of experience that would be necessary in the absence of regulation. And of course, in so doing, they limit the decision maker’s choice.
System Imposed Time constraints : Organizations impose deadlines on decision. For E.g: department budgets need to be completed by next Monday. A host of decisions must be made quickly in order to stay ahead of the competition and keep customers satisfied. And almost all important decisions come with explicit deadlines. These conditions create time pressures on decision makers and often make it difficult, if not impossible, to gather all the information they might like to have before making a final choice.

4. Historical precedence
Decision aren’t made in vacuum. They have a context. In fact, individual decisions are more accurately characterized as points in a stream of decisions made in .the past are ghost that continually haunt current choices. Government budget decisions also offer an illustration of out point choices made today, therefore, are largely a result of choices made over the years.

5. Cultural difference
The rational model makes no acknowledgment of cultural differences. We need to recognize that the cultural background of the decision maker can have significant influence on his or her selection of problems, depth of analysis. The importance placed on logic and rationality, or whether organizational decisions should be made automatically by an individual cultures, for example, differ in terms if time orientation, the importance of rationality, their belief in the ability of people to solve the problems and preference for collective decision making. While rationality is values in North America. A North American manager might make an important decision intuitively, but he/ she knows that it is important to appear to proceed in a rational fashion. This is because rationality is highly valued in the west. In countries such as Iran, where rationality is not defined, efforts to appear rational are not necessary.

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Titany answered the question on September 7, 2021 at 11:23