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Conceptualizing the Decision Process: Spatial Decision Process Models

(http://faculty.washington.edu/krumme/search/decisions.html)


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Stages & Phases The Rational-Deductive Model Adaptive & Behavioral Propositions The Consulting Approach (practical/prescriptive)
Recognition of Problems or Opportunity: Activating the Decision Process
  • The organization and its environment
  • Identify Resources and Constraints
  • Motivation / Stress / Strain Conversion (Brown & Moore)
  • Interim action
  • Adaptive action
  • Contemplation of corrective action (K&T, p.175)
    • Concept Development; Identify the decision-making process and decision makers; Develop preliminary consulting schedule & budget
  • Establish Objectives (K&T, p.181) Already at the beginning of the decision process, the decision maker has a utility function including a preference ordering that ranks all sets of consequences from the most to the least preferred. Needs Assessment; Review alternatives (e.g. peers', competitors' solutions)
    Classifying Objectives according to importance Prerequisites, minimum requirements; Musts & Wants, Scoring scales; (K&T, p.183)
    Investigation & Search: Developing Alternatives from which to choose
  • In the extreme, the decision maker has already laid out all alternatives from which to select her action....

    More process oriented models require specifications which are based on a variety of considerations, including:

    • Information search continues until optimal amount of information has been found
      • Is there a finite or infinite horizon to this search?
      • Is the decision maker risk-neutral, risk-loving or risk-adverse?
    • Search & Investigation can be costly (Aharoni, p.78)
    • Expected value of perfect information (upper limit to search costs)
  • Sequential attention to goals
  • Quasi resolution of conflicts (conflicts between goals may not be resolved: somebody wins, someone is paid off, concensus is not reached, inconsistencies remain)

  • Goal Levels: (Goals are a series of independent aspiration-level constraints (e.g. imposed by the members of the organizational coalition)
    1. Ideal, perfect score
    2. Past achievement(s)
    3. Aspiration level: level which the actor expects to achieve; itself based on (some weighted function of):
      1. past goals
      2. past performance
      3. performance of other, comparable organizations
      4. expectations of stakeholders and Wall Street
    Goals are adapted over time


  • Uncertainty avoidance
    1. Avoid the requirement of correctly anticipating the future by adopting strategies with short-term feedback and small steps
    2. Try to influence/internalize/ negotiate with the environment. Lobby for "industry standards", political stability etc.


  • Information search to continue until sufficient amount of satisfactory information has been found to activate next stage of decision process (G&S, p.33);
  • Cyert & March: Problemistic Search (p.120)
    • Search is motivated
    • Search is simple-minded
    • Search is biased
  • Adaptation of attention rules (CM, 123)
  • Cognitive maps; Space perception,
  • Market analysis;
    Comparing Alternatives with Objectives Adverse Consequences Worksheet (K&T, p.203)
    Select the best Alternative as a Tentative Decision Decision maker selects that alternative which leads to the preferred consequences. Alternative that receives the highest weighted score (K&T, p.189); feedback collected from focus groups (testers)
    Anticipate unintended, adverse consequences Evaluation; seek additional information and advice Trial baloon, devil's advocate, any change causes problems somewhere; Develop contingency actions to be able to counter unintended consequences (K&T,p.206)
    Control effects of final decisions: Prevention of hostile consequences & prepare for follow-up (e.g. build-in flexibility) Environment deteriorates; decision is postponed; decision maker procratinates or backtracks to interim adaptation or to earlier decision stage;


    Internet Sites: 



    Decision Making Viewed as a Process

    The Environment of a Decision (Ebert & Mitchell, Ch.3)

    Evaluation of Goals

    Performance Unsatisfactory

    Information Processes: Search for better Alternative

    Judgmental Inferences (Ebert & Mitchell, Ch.6)

    Reconsideration of Search Rules


    Step 1

    • Identify Needs
    • Compare actual performance with expected standards (K&T, p.44)
    • A "problem is a deviation from a standard of performance" (p.44)
    • How to specify a problem (Kepner Tregoe, Ch.5)

    Step 2 Develop Objectives (K&T, p.48)

    Step 3 Identify Resources and Constraints

    Step 4 Identify Potential Options/Alternatives

    • Information Processes [Ebert, pp.67ff.]
      • Acquisition: Search
        • Theories of Search Behavior
          • Cyert & March
            • Search is motivated
            • Search is simple-minded
            • Search is biased
          • Sequential Search or "Parallel Process"? [Ebert, p.94]
          • Search Directions & Search Regions (p.95)
        `
      • Processing
      • Output

    Step 5 Establish and Apply Screening Criteria

    Step 6 Develop Alternatives (K&T, p.48)

    Step 7 Evaluate Alternatives (K&T, p.49)

    Step 8 Select

    • Choice of .. tentative (K&T, p.49)
    • Tentive choice explore for adverse consequences (K&T, p.49)

    Step 9 Implement

    Step 10 Monitor and Adapt


    Internet:


    Literature:

    Aguilar, Francis Joseph. Scanning the Business Environment. N.Y.: McMillan 1967.

    Aharoni, Yair. The Foreign Investment Decision Process. Boston, 1966.

    BROWN,-LAWRENCE-A.; PHILLIBER,-SUSAN-G.; MALECKI,-EDWARD-J.; WALBY,-KAREN, Information source usage in the migration decision ( Ohio). Socio-Economic-Planning-Sciences. 1981. 15(6), pp 321-330, 4 tables, 18 refs.

    In reporting the empirical findings of the survey, three questions are addressed: 1) What is the pattern, frequency and effectiveness of information source usage by migrants? 2) What type of information is obtained from each information source? 3) Does information source usage and/or type of information obtained vary by phases of the migration decision process?

    Braybrooke, David and Charles E. Lindblom. A Strategy of Decision: Policy Evaluation as a Social Process. The Free Press, 1963/1970.

    Cooper, Malcolm J.M., The Industrial Location Decision Making Process. University of Birmingham: Centre for Urban and Regional Studies, 1975.

    Cyert, Richard & James March. Behavioral Theory of the Firm. 1963.

    Ebert, Ronald and Terence R. Mitchell, Organizational Decision Processes: Concepts and Analysis. N.Y.: Crane, Russak & Co., Inc., 1975.

    Golledge, R.G. & R.J. Stimson, Spatial Behavior: A Geographic Perspective, Guilford, 1997. [Ch.2: "Decision Making and Choice Behaviors", pp.31ff.]

    Hayter, Roger. The Dynamics of Industrial Location. 1997, pp.146-54.

    Kepner, Charles H. and Benjamin B. Tregoe, The Rational Manager, 2nd ed., Princeton, 1976.

    McFadden, Daniel, "Economic Choices," American Economic Review 91(3), June 2001, 351-78.

    McCLYMONT, D., Decision-making process of commercial farmers in Zimbabwe. Agricultural Administration. 1984. 17(3), pp 149-162, 2 figs, 6 refs.

    Commercial farmers in Zimbabwe plan in four distinct phases:
    1. long-term plans,
    2. medium-term plans,
    3. seasonal plans, and
    4. day-to-day plans.
    Each of these plans has a specific personal or farm orientation. The farmers are motivated to change and their decision-making process involves a five-phase cycle with continuous reassessment at each phase.

    March, James G. and H.O.Simon, Organizations, NY: Wiley, 1958.

    Ohlmer, B.; Olson, K.; Brehmer, B. Understanding farmers' decision making processes and improving managerial assistance. Agricultural-Economics. 1998; 18(3): 273-290

    Current knowledge of the decision making process is reviewed and described as a set of eight functions or elements:
    1. values and goals,
    2. problem detection,
    3. problem definition,
    4. observation,
    5. analysis,
    6. development of intention,
    7. implementation, and
    8. responsibility bearing.
    The relevancy of this view of farmers' decision making behavior is tested through a series of case studies on the basis of which the conceptual model is revised to include four phases and four subprocesses. The four phases are
    1. problem detection,
    2. problem definition,
    3. analysis and choice, and
    4. implementation.
    The four subprocesses are
    1. searching and paying attention,
    2. planning,
    3. evaluating and choosing, and
    4. checking the choice.
    In addition, farmers prefer the ability to continually update their evaluation and plans, a qualitative vs. quantitative analysis, a 'quick and simple' vs. detailed and elaborate analysis, small tests and incremental implementation, and feed forward and compensation vs. post-implementation evaluation.

    Stigler, George J., "The Economics of Information," Journ of Political Economy, 69, 1961, 213-25.


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