Patterns of Resource Allocation Decisions in Organisations - Ebs-forschung, Schriftenreihe Der European Business School Schloss Reichartshausen Softcover reprint of the original 1st ed. 2005 edition

Jacket Description/Back: Although decision-making is widely regarded as being based on rigour analysis of the advantages and disadvantages of the decision alternatives in a specific situation, managers do not always take decisions in isolation. Rather, they are embedded in a social and organisational environment, which serves as orientation for decision-making. Being embedded in social environments, the outcomes of decisions taken in organisations are characterised by systematic similarities that can be interpreted as patterns of decisions. Based on publicly available data on the outcomes of resource allocation decisions of the two pharmaceutical and chemical companies Ciba and Sandoz, Robert Urlichs investigates more than 1,000 decisions. He analyses this data base in a combination of quantitative and qualitative techniques and identifies patterns of decision outcomes. The results reveal that patterns of decision outcomes develop within and even across organisations. Organisational decision-making seems to be biased by the outcomes of prior decisions taken in the same and in other organisational units. An excursus shows that many of the identified patterns of decisions can be interpreted as realised strategies, which have emergent and deliberate elements. Therefore, the author brings life to Mintzberg's notion of realised strategy as a pattern in a stream of decisions, providing an empirical basis and analytical methodology. Table of Contents: 1 Introduction.- 1.1 Problem and research objective.- 1.2 Research design.- 1.3 Structure of the thesis.- 2 Classical and behavioural perspectives on decisions-making.- 2.1 The classical perspective on individual decision-making.- 2.1.1 Assumptions in the classical perspective on decision-making.- 2.1.2 The decision-making process in the classical perspective.- 2.2 The behavioural perspective on individual decision-making.- 2.2.1 Bounded rationality.- 2.2.2 The behavioural process model of individual decision-making.- 2.2.3 Problem identification and information acquisition.- 2.2.3.1 Availability heuristic.- 2.2.3.2 Selective perception.- 2.2.4 Information processing and choice.- 2.2.4.1 Representativeness heuristic.- 2.2.4.2 Anchoring and adjustment and reasoning by analogy.- 2.2.4.3 Schemata and resolving cognitive dissonance.- 2.2.5 Decision-specific factors.- 2.2.6 Organisational and environmental factors.- 2.2.7 Summary and critical evaluation.- 2.3 The behavioural perspective on organisational decision-making.- 2.3.1 The behavioural process model of organisational decision-making.- 2.3.2 Problem identification and information acquisition.- 2.3.2.1 Problem sensitisation.- 2.3.2.2 Organisational attention.- 2.3.3 Information processing and choice.- 2.3.3.1 Decision-making in groups.- 2.3.3.2 Standard decision-making processes.- 2.3.3.3 Schemata in organisations.- 2.3.4 Decision-specific factors.- 2.3.5 Organisational and environmental factors.- 2.3.5.1 Organisational structures.- 2.3.5.2 Political forces.- 2.3.6 Summary and critical evaluation.- 3 Similarity and patterns of decision outcomes.- 3.1 Definitions of decision outcome, similarity and pattern.- 3.1.1 Definition of decision outcomes and their characteristics.- 3.1.2 Definition of similarity of decision outcomes.- 3.1.3 Definition of pattern of decision outcomes.- 3.1.4 Definition of development of patterns over time.- 3.2 Similarity and patterns in the classical perspective on decision-making.- 3.2.1 Similarity in the classical perspective on decision-making.- 3.2.1.1 Problem identification.- 3.2.1.2 Information acquisition, information processing and choice.- 3.2.1.3 Development of propositions.- 3.2.2 Patterns in the classical perspective on decision-making.- 3.2.2.1 Problem identification.- 3.2.2.2 Information acquisition, information processing and choice.- 3.2.2.3 Development of propositions.- 3.2.3 Development of patterns over time in the classical perspective on decision-making.- 3.2.3.1 Problem identification.- 3.2.3.2 Information acquisition, information processing and choice.- 3.2.3.3 Development of propositions.- 3.3 Similarity and patterns in the behavioural perspective on decision-making.- 3.3.1 Similarity in the behavioural perspective on decision-making.- 3.3.1.1 Problem identification.- 3.3.1.2 Information acquisition.- 3.3.1.3 Information processing and choice.- 3.3.1.4 Development of propositions.- 3.3.2 Patterns in the behavioural perspective on decision-making.- 3.3.2.1 Problem identification.- 3.3.2.2 Information acquisition.- 3.3.2.3 Information processing and choice.- 3.3.2.4 Development of propositions.- 3.3.3 Development of patterns over time in the behavioural perspective on decision-making.- 3.3.3.1 Problem identification.- 3.3.3.2 Information acquisition.- 3.3.3.3 Information processing and choice.- 3.3.3.4 Development of propositions.- 3.4 Excursus: Strategy and the perspectives on decision-making.- 3.4.1 Definition of strategy.- 3.4.2 Interpretation of patterns of decision outcomes as realised strategy.- 3.5 Summary.- 4 Research design, data and methods.- 4.1 Design of the case illustration.- 4.1.1 Research design.- 4.1.2 Introduction to the cases of Ciba and Sandoz.- 4.2 Data gathering and variables in the outside perspective on decisions.- 4.2.1 Introduction to the content analysis.- 4.2.2 Identification of resource allocation decisions.- 4.2.3 Variables and coding of data.- 4.2.3.1 Importance of coding of data.- 4.2.3.2 Variables and coding rules.- 4.2.3.3 Storing in database.- 4.2.4 Reliability and validity of data gathering.- 4.2.4.1 Reliability.- 4.2.4.2 Validity.- 4.3 Perspective of decision-makers on patterns of decisions.- 4.4 Analytical methods.- 4.4.1 Analysis of similarity of decision outcomes.- 4.4.1.1 Choice of similarity measure.- 4.4.1.2 Choice of variables to be included.- 4.4.1.3 Analysis of differences in level of similarity.- 4.4.2 Cluster analysis for identification of patterns of decision outcomes.- 4.4.2.1 Relevance of cluster analysis for the research question.- 4.4.2.2 Choice of similarity measure and variables to be included.- 4.4.2.3 Choice of clustering algorithm.- 4.4.2.4 Choice of number of clusters.- 4.4.2.5 Sensitivity analysis.- 4.4.3 Analysis of patterns of decision outcomes.- 4.4.3.1 Interpretation of clusters as patterns of decision outcomes.- 4.4.3.2 Patterns of decision outcomes across environmental and organisational factors.- 4.4.3.3 Analysis of development of patterns of decision outcomes over time.- 4.4.4 Analysis of interview transcripts.- 4.5 Summary and critical evaluation.- 5 Results.- 5.1 Results of similarity analysis.- 5.2 Results of cluster analysis.- 5.2.1 Cluster results.- 5.2.2 Results of the sensitivity analysis.- 5.3 Results of analysis of patterns of decision outcomes.- 5.3.1 Interpretation of clusters as patterns of decision outcomes.- 5.3.2 Patterns of decision outcomes across organisational and environmental factors.- 5.3.2.1 Environmental factors.- 5.3.2.2 Organisational factors.- 5.3.3 Development of patterns of decision outcomes over time.- 5.3.3.1 Frequency of decision outcomes over time.- 5.3.3.2 Similarity of decision outcomes over time.- 5.4 Summary of results.- 6 Discussion and implications.- 6.1 Discussion of results.- 6.1.1 Discussion of the classical perspective on decision-making.- 6.1.2 Discussion of the behavioural perspective on decision-making.- 6.1.3 Discussion of other perspectives on patterns of decision outcomes.- 6.2 Excursus: Discussion of strategy and the perspectives on decision-making.- 6.3 Theoretical and managerial implications.- 6.3.1 Theoretical implications.- 6.3.2 Managerial implications.- 7 Conclusion.- 7.1 Summary.- 7.2 Limitations of the research and options for future research.- Appendix A. Intercoder reliability for Novartis.- Appendix B. Means, standard deviations and correlations.- Appendix C. Interview guide.- References. Biographical Note: Dr. Robert Urlichs promovierte bei Prof. Dr. Jean-Paul Thommen am Department "International Management and Consulting" an der European Business School, Schloss Reichartshausen. Er ist als Unternehmensberater fur McKinsey & Company, Inc., tatig."Publisher Marketing: In today's competitive environment, managers are continuously faced with the need to take decisions. Decision-making is often portrayed as being based on rigorous analysis of the advantages and disadvantages of the decision alternatives in a specific situation. However, managers do not always take decisions in isolation. Rather, decisions are embedded in a social and organisational environment that serves as frame of references for decision-making. Norms and behaviours of others in this environment play an important role in decision making. In addition, decisions are the result of social processes in today's organisations. Being embedded in social environments, the outcomes of decisions taken in organisations are characterised by systematic similarities that can be interpreted as patterns of decisions. Robert Urlichs provides an empirical examination of these patterns of decisions in organisations and interprets them on the basis of the theoretical and empirical literature on the decision-making behaviour of individuals and organisations. In particular, he differentiates the classical from the behavioural decision-making literature. Whereas the classical perspective is based on the assumptions of perfect rationality, the behavioural perspective replaces these assumptions with the notion of bounded rationality. The author provides an extensive review of the biases and heuristics, and their impact on the outcomes of decisions. He concentrates on the outcomes of decisions and on their interrelations. In contrast, the existing literature on decision-making behaviour focuses largely on the process of individual decisions."

Contributor Bio:  Thommen, Jean-Paul Prof. Dr. Jean-Paul Thommen is Professor of Business Administration, in particular Organizational Behaviour and Human Resource Management, at the European Business School in Oestrich-Winkel, Germany. He is also a titular professor at the University of Zurich and visiting lecturer at the University of St. Gallen. Ansgar Richter, PhD, is Assistant Professor of Organisation and Human Resources Management at the European Business School in Oestrich-Winkel, Germany.