Significant contributions to decision theory were made by Chester I Barnard, a successful business executive in the telephone industry. Barnard introduced the concept of the concept of the social environment as a constraint influencing the final outcome of a decision. He stated that nature, legal regulations, social responsiveness, competitors, and customer needs are all environmental constraints that affect the final outcome of a decision. To Barnard, the decision maker must have an understanding of the environment so that the effects of alternative solutions can be predicted. Environmental factors, he felt, become more distinct and exacting as objectives are redefined and made more explicit. He noted, as well, that objectives have no meaning except in an environment with a set of restrictions or limitations.
The previous two sections of this chapter should dispel the belief that managers rationally proceed step by step to define a problem, identify a wide range of alternatives with their consequences and risk, collect and analyze all data thoroughly, and select a specific alternative that is totally acceptable to all persons involved. With the problems of rationality and environmental constraints, the role of human behavior also restricts the decision - making process. This is particularly significant when we recognize that actions by dominant individuals or coalitions influence organizational decisions through negotiation and compromise.
Seldom does a manager make a decision that is supported by all organizational units. Some decisions will be bitterly opposed, some well supported, while others will fall within a zone of comparative indifference. Thus, form a behavioral viewpoint, managers must be sensitive to the power structures within an organization in order to predict which decision will gain the greatest support in the pursuit of goals. Moreover, goal achievement depends upon how well managers influence the decisions of those personnel who are involved in performing task and implementing programs at lower levels of authority.
Some of the behavioral elements that influence the decision process are given below:
Group (peer) pressures, both supportive and non supportive, that are exerted on the decision maker.
The decision maker's stated position within various groups (managerial and non managerial)
Personal attitudes about what and how others will think if a particular decision is made.
Feelings about the expectations of others and the weight of public opinion.
Ability to use the reactions of key individuals and groups to access the impact of a decision on the organization.
The stress to which the decision maker is exposed.
Personal knowledge and skill can also affect a decision, especially the amount of knowledge one has about a problem and its alternatives. Clearly, the manager must have the ability and resources if a decisional problem is to meaningful. For instance, if a manager knows very little about production but is very knowledge about computers, a decision concerning capital expenditures might be to purchase a new computer. A decision is also influenced by the personal values of the decision maker at the time each alternative action is being considered. Thus, the motivation to develop a strong work force may be sufficience the manager to see the importance of creating a personnel department. However, this would not be likely unless it was felt that the department would better fulfill the company's overall objectives than some other available alternative. Unfortunately, in many organizations, managers perceive that problems of this type exist but are not sufficiently motivated to try to solve them.