Patterns of Resource Allocation Decisions in Organisations

Patterns of Resource Allocation Decisions in Organisations Synopsis

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.